Utility pays bonuses to execs before nuclear project fails
Posted August 10
COLUMBIA, S.C. — The company that led the failed effort to build two new nuclear reactors in South Carolina — and is now seeking to recoup billions more from customers — paid its executives millions in bonuses, some of it for work on the project, a review of federal records shows.
A review of filings with the U.S. Securities and Exchange Commission show SCANA Corp. paid executives more than $21 million in performance bonuses over the past decade, including money for work on the V.C. Summer Nuclear Station north of Columbia, The State newspaper reported.
The filings do not say exactly how much of the $21 million was based on the failed project.
SCANA's South Carolina Electric & Gas Co. and state-owned utility Santee Cooper last week abandoned construction on two new reactors, on which they already spent $10 billion. Much of that came from customers.
The project was already years behind schedule and billions over budget when lead contractor Westinghouse declared bankruptcy in March. Utility executives said they were forced to give up after determining the price tag for completing the project, budgeted at $11 billion in 2008, had soared beyond $20 billion.
SCANA spokeswoman Rhonda O'Banion told the newspaper the company doesn't talk about employees' pay.
Last year, SCANA's top five executives received $3.3 million in performance based pay, according to the federal filings.
Nearly half of last year's performance pay went to SCANA president and chief executive Kevin Marsh and represents about a quarter of his $6 million in total compensation.
The filings said Marsh's $1.4 million performance-based bonus for 2016 was paid, in part, because of his "oversight and support of our nuclear construction activities."
"Knowing everything we know now, and knowing that we have a project that has been abandoned, those are pretty staggering numbers," said Rep. Russell Ott, D-St. Matthews, who's on a House panel tasked with reviewing the project's failure.
A law passed in 2007 gave utilities the ability to charge customers for reactors as they're being built and recoup money even if a project's never finished.
Outraged lawmakers are now trying to prevent customers from paying more.
On Wednesday, the South Carolina agency responsible for examining utilities recommended that state regulators reject SCE&G's abandonment plans. By law, SCE&G must get approval from the legislatively elected Public Service Commission — the same group that has approved all of SCE&G's requested rate hikes since 2009.
SCE&G is asking commissioners to find it acted prudently, so it can proceed with plans to revise electricity rates and recoup $5 billion over 60 years. At least $2.2 billion of that would come directly from customers already paying some of the nation's highest electricity rates.
The Office of Regulatory Staff, which represents the public in utility regulation, argues SCE&G is making its request under the wrong section of that decade-old law.
According to its motion, re-filing under the correct section would force SCE&G to prove to regulators it spent prudently, instead of requiring critics to prove it didn't. A dismissal would also give lawmakers more time to investigate and figure out what to do.
The utility has asked commissioners to rule quickly. Under the current filing, they must rule by February or the petition is automatically approved.
Both Senate President Pro Tem Hugh Leatherman of Florence and House Speaker Jay Lucas of Hartsville have appointed committees to review how the project failed and what can be done.
Lucas filed a request Wednesday to join the proceedings and support the Office of Regulatory Staff's motion to dismiss. He has resisted calling legislators back to Columbia for a special session before they're slated to return in January.
Gov. Henry McMaster has said he is looking for ways to renew construction and complete at least one of the reactors. That includes trying to persuade a utility to either buy out Santee Cooper's 45 percent share of the project or buy the state-owned utility altogether.