SC ratepayers win victories as judge sets trial date in lawsuit against Santee Cooper

A state judge on Thursday set April 20 as the tentative start date for what could be one of the biggest trials in state history — deciding whether state-owned utility Santee Cooper should refund possibly billions of dollars to some 2.2 million ratepayers.

The April 20 date for the trial involving the $9 billion failed V.C. Summer nuclear project was a victory for Santee Cooper’s ratepayers, who have been certified to join together to sue the utility, and whose lawyers had been pushing for more time to prepare their case. The trial previously was slated for trial Feb. 24.

For years, Santee Cooper’s ratepayers have paid extra fees on their monthly bills to pay for what turned out to be a doomed and very expensive project to build two nuclear powered electric generators in Jenkinsville, about 25 miles northwest of Columbia. Santee Cooper was the junior partner on the project with the now former Cayce-based SCE&G, which was acquired by Dominion Energy in January 2019.

Santee Cooper’s ratepayers still have extra costs tacked onto their monthly bills for the project. The plaintiffs’ lawsuit seeks refunds for the billions already paid and an end to continuing to pay for the project - a total of $4.7 billion, according to their lawsuit.

“The heart of this case is that the plaintiffs don’t want to pay for something they have never received a benefit for,” plaintiffs’ attorney Whitney Harrison told state Judge Jean Toal on Friday.

The April 20 trial date gives plaintiffs’ lawyers — who represent a class of some 2.2 million Santee Cooper customers — a chance to go through 25,000 pages of potentially explosive documents they just obtained from Santee Cooper’s lawyers at 5 p.m Wednesday.

Many of the new documents concern a Santee Cooper insider, Marion Cherry, who was one of that company’s on-site representatives at the nuclear project during the time it was failing, ratepayer lawyer Frank Ellerbe told Toal.

“Mr. Cherry’s documents were just produced,” Ellerbe told Toal, adding that plaintiffs had also not yet been able to take depositions — pretrial sworn statements — of Santee Cooper’s board members. “The case is not ready for trial,” Ellerbe said.

Cherry made news in 2018 when it was revealed that he had received a voicemail in 2016 from an SCE&G whistleblower, Carlette Walker, who said that SCE&G’s executives were “breaking every friggin’ law that you can break” by mismanaging the project to meet profit goals and collect millions in bonuses. In the voicemail, which was forwarded to Santee Cooper’s top officials, Walker urged Cherry to stop Santee Cooper from paying any more money for what turned out to be a doomed nuclear project.

In the effort to build two new nuclear reactors, SCE&G was the main partner, shouldering 55% of the costs and the on-site responsibility for overseeing the building of the project. Santee Cooper, the junior partner, paid 45%and had Cherry and two other representatives on site to monitor what was going on.

The documents related to Cherry may raise the question of whether Santee Cooper acted responsibly once its top officials learned about Walker’s allegations.

Toal also sided with ratepayers’ lawyers Thursday on other motions by:

▪ Refusing to decertify the class. Had the plaintiffs lost this ruling, they would have gone to court with only one or a few plaintiffs instead of 2.2 million. That would reduce the potential recovery from billions to thousands of dollars.

▪ Refusing at this point to put any limits on Santee Cooper’s potential liabilities in the case. However, the utility’s lawyers can still push for a limit later.

The jury trial, which Toal said would last no more than three weeks, will take place in Greenville, a neutral place where there are few if any customers of Santee Cooper, the former SCE&G or the rural electric cooperatives with interests in the case.

Toal, a former S.C. Supreme Court chief justice who still oversees cases on the trial level, was appointed to the case by current Chief Justice Don Beatty.

During the two and a half hour hearing Thursday at the Richland County courthouse, lawyers also told Judge Toal that settlement talks are still continuing behind the scenes among the various parties in the high-stakes case. Toal is a former state Supreme Court Chief Justice.

In July 2017, without warning, Santee Cooper and SCE&G abruptly announced the nuclear construction project was a failure. The sudden abandonment surprised many because both companies had been issuing statements about how well the nuclear venture was going. Court records have since documented the project was plagued by mismanagement.

Federal criminal and civil fraud investigations into the case are continuing.

In the last eight months, two major lawsuits against SCE&G have been settled.

Earlier this month, a massive federal lawsuit alleging civil fraud on the part of SCE&G by investors received preliminary settlement approval by a federal judge. Former shareholders, who were seeking some $2.7 billion in alleged losses, are slated to receive $192.5 million.

Last summer, a ratepayer lawsuit against the former SCE&G was settled for $146 million in customer refunds and $2 billion in future rate relief by Dominion Energy. Dominion, headquartered in Virginia and one of the nation’s largest energy companies, bought SCE&G and its parent company, SCANA.

Approximately 30 lawyers representing various parties in the Santee Cooper action attended Thursday’s hearing.

They included former U.S. Attorney Pete Strom, Santee Cooper general counsel and former state judge Michael Baxley, Charleston School of Law President Ed Bell, State Sen. Vincent Sheheen, D-Kershaw, former SCANA lawyer Jim Stuckey, former State Rep. Bakari Sellers, Rush Smith, William Hubbard, Greg Harris, Matt Bogan, John Chally, David Balser, Jay Ward, Harrison and Ellerbe.

Although Toal provisionally moved the trial date back from Feb. 24 to April 20, she made it clear to the lawyers she wanted the case tried or settled as soon as possible. Major outside policy interests stand to be affected by this case, Toal said in an apparent reference to a possible sale of Santee Cooper. Lawmakers are awaiting a report evaluating bids to buy, manage or leave under current leadership the state-owned utility.

“The need to resolve this matter outweighs” most other considerations, Toal told the attorneys.

This story was originally published January 30, 2020 at 1:18 PM.