Owner of failed nuclear plant might use golden parachute fund in settlement
Today, South Carolina energy company SCANA and its potential purchaser Dominion Energy reached a settlement with class-action litigants to offer a significant energy bill rate cut in exchange for the litigants dropping a lawsuit over $2 billion in energy bill fees. Attorneys for the class-action members told The Post and Courier that they will accept the deal if it’s approved.
SCANA was a 55 percent owner of the VC Summer nuclear power plant expansion, and when reactor maker Westinghouse went bankrupt early last year, the owners of the plant found themselves in a very bad position.
Stakeholders opted not to continue construction on Summer, unlike in Georgia, where a similar reactor construction project from Westinghouse found the public support to fulfill construction. Meanwhile, SCANA and its public-facing utility, South Carolina Electric and Gas (SCG&E) still found themselves on the hook after massive cost overruns. Customer energy bills subsidized the billions of dollars of construction that would ultimately go nowhere.
A class-action lawsuit representing these customers argued that they should not have to pay for an unfinished nuclear plant. Interestingly, the deal calls for SCANA to partially pay the settlement with its $115 million “golden parachute” fund, usually reserved to give high-level executives generous severance payments on their way out.
The deal must be approved by a judge, and it’s also contingent on SCANA being purchased by Virginia company Dominion Energy. Dominion appears motivated to purchase SCANA, and as part of today’s proposed settlement after Dominion would offer SCG&E customers a 15 percent customer rate cut that Utility Dive says could cut bills by more than $22 per month. Dominion’s acquisition of SCANA has secured approval from six state and federal regulatory agencies, and now the company is only waiting on approval from South Carolina’s Public Services Commission. South Carolina PSC says it wants to see a 33 percent rate cut for customers.
Even if this settlement is approved, SCANA still faces a shareholder lawsuit saying it misled investors on the progress of Summer’s reactor construction. Additionally, the $2 billion settlement would still leave customers on the hook for an additional “$2.3 billion for two unfinished reactors over the next two decades,” according to The Post and Courier.
The Post and Courier also notes that the settlement and Dominion’s acquisition deal don’t help out customers of Santee Cooper, which was another major owner of the Summer reactor expansion. Additionally, the settlement does not relieve the costs borne by the state’s 20 electric cooperatives, which also shared ownership in the project.
