SCANA Hit with New Subpoena From SEC
SCANA Corp., already under federal and state scrutiny for how it handled the now-abandoned V.C. Summer nuclear expansion, has been served with a document subpoena by the U.S. Securities and Exchange Commission (SEC).
SCANA said in a news release that it intends to fully cooperate with the investigation of the nuclear project. The development follows a drastic drop in the company’s share price in late September.
SCANA and project partner Santee Cooper in mid-September received federal subpoenas for documents associated with a much-guarded February 2016 assessment report conducted by Bechtel, documentation of meetings with the construction and civil engineering firm, and documentation of site walkdowns and real-time observations at the half-built project.
South Carolina lawmakers on September 26 urged state law enforcement to conduct a criminal investigation into how the project was handled. The measure came after several legislative committee hearings, many focused on the Bechtel audit. At one point, state lawmakers threatened to subpoena if the utilities didn’t release it.
Bechtel—a company that will take over construction at the Vogtle AP1000 nuclear expansion in Georgia—completed the assessment three months before SCANA asked regulators to increase its share of the project cost and approve a fixed-price contract with Westinghouse, which eventually filed for bankruptcy protection in March 2017.
The two-unit project to build first-of-their-kind AP1000 reactors was about 64% complete in May, but it had been in limbo after Westinghouse’s bankruptcy filing.
The utility partners eventually announced their decision to abandon the project on July 31. The key reason for SCANA’s decision was that the project would be “prohibitively expensive.” For Santee Cooper, the decision was based “in large part on a comprehensive analysis of detailed schedule and cost data, from both project contractor Westinghouse Electric Co. and subcontractor Fluor Corp., first revealed after Westinghouse filed for bankruptcy in March.”
SCANA is meanwhile also fielding multiple class-action suits alleging that its subsidiary South Carolina Electric & Gas (SCE&G) overcharged its customers by raising rates to pay in advance for the construction of the project.
In late September, law firm Motley Rice filed a class-action suit on behalf of SCANA shareholders alleging that the company made “false and misleading statements and/or failed to disclose adverse information regarding the construction of the Nuclear Project, assuring investors that costs spending [of an estimated $9 million] was prudent and substantial progress was being made, even when cost overruns and other delays began to materialize.”
The suit claims that as a result of these alleged false statements and omissions, “SCANA’s common stock traded at artificially inflated prices during the Class Period,” which spanned between January 19, 2016, and September 22, 2017.
—Sonal Patel is a POWER associate editor (@sonalcpatel, @POWERmagazine)