Santee Cooper accuses SCE&G of fraud
A gentleman's agreement between 2 of the state's largest utilities is over.
Taxpayer-owned Santee Cooper has accused investor-owned SC Electric & Gas of civil fraud, misconduct and numerous “breaches of duties in a legal filing in state court this week," The State newspaper reported.
Lexington County-based SCE&G is Santee Cooper's partner in a $9 billion nuclear power project the 2 utilities abandoned but want ratepayers to pay for.
The State reported that both utilities signed an agreement in 2011 giving SCE&G authority to oversee all aspects of nuclear construction. SCE&G owned 55% of the project, Santee Cooper 45%.
SCE&G broke that agreement with “various fraudulent acts,” including “dishonesty, bad faith, unfair dealing and the unlawful appropriation of Santee Cooper’s money by design,” the legal filing reads.
This is the first time Santee Cooper has publicly accused SCE&G of wrong-doing and gross negligence.
SCE&G did not respond to requests for comment from The State Friday.
In its filing, Santee Cooper alleges that since 2014 it repeatedly pleaded with SCE&G to improve its project oversight.
As the project’s lead contractor, Westinghouse proved incapable of delivering on promises, delaying construction and costing millions in overruns.
SCE&G knew about the shortcomings but didn’t act, Santee Cooper alleges.
“SCE&G willfully and intentionally did not confront Westinghouse” about its “failure to manage the project in ways that would be effective,” the filing said.
According to The State, Santee Cooper claims it:
- Emailed SCE&G CEO, Kevin Marsh in September 2014 to tell him Santee Cooper wanted to hire a construction expert to evaluate lack of propgress.
- Suggested in February 2015 that Bechtel Corp., the country’s largest nuclear construction company, be hired to assess the project.
- Recommended in 2016, as a result of the Bechtel report, that SCE&G hire more independent engineering and construction experts to evaluate progress. But SCE&G did not “despite Santee Cooper’s repeated requests that it do so.”
Santee Cooper wrote that SCE&G also “resisted Bechtel’s attempt to develop a final report” and demanded the report be altered.
SCE&G hid the report from regulators and the public, claiming it was protected by attorney-client privilege.
“Santee Cooper is entitled to damages arising from SCE&G’s gross negligence,” the filing said.
Watch the Chronicle website for more details as they come available.