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Ex-Utility Execs Emotional over South Carolina Nuke Failure

The South Carolina Public Service Commission hold hearings into where SCE&G rates should be set after the utility charging customers for a decade for two nuclear reactors at the V.C. Summer plant that were never finished.

After weeks of dry presentations, two former top officials at a South Carolina utility who cost ratepayers billions in a failed nuclear project emotionally told regulators their warning signs to their bosses were ignored and they were asked to lie.

“Their ego, greed and lack of integrity have cost ratepayers, stockholders and employees billions of dollars,” top accountant Carlette Walker said of executives with her former employer South Carolina Electric & Gas.

Walker testified Tuesday before the South Carolina Public Service Commission. The board is holding hearings into where SCE&G rates should be set after the utility charging customers for a decade for two nuclear reactors at the V.C. Summer plant that were never finished. Consumer advocates want the money spent on the project returned to ratepayers.

Walker, who had to pause a few times while reading from a summary of her deposition, said five executives started trying to run her out long before she finally resigned in June 2016 with a negotiated settlement from SCE&G's parent company SCANA. She said they were upset she refused to lie about possible financial trouble for the project to keep the stock price up and protect bonuses.

Former SCE&G engineer Kenneth Brown said he started telling his bosses at the private utility the project was in trouble in 2012, about four years after it started. SCE&G pulled the plug on the reactors in the summer of 2017 after state-owned utility Santee Cooper, which had a 45 percent share, abandoned the project.

“Countless admonitions to the consortium from me and others at SCE&G, with higher positions up to and including top level management, only resulted in a corresponding number of empty promises to improve performance and to `do better next time,”' Brown said.

Brown also read his testimony and had to pause several seconds at the end as he recalled hearing Westinghouse, the contractor building the reactor, had declared bankruptcy in March 2017 and he realized the project was doomed.

“I could not escape the guilt knowing I had participated in what was sure to become the largest financial catastrophe ever to occur in the state,” Brown said. “I had comfort knowing that I had done my best but it was not sufficient to overcome this guilt.”

Both Walker and Browne have lawyers as criminal investigations into the failure also continue.

Walker and Browne have said in depositions that SCANA and SCE&G executives misled regulators in 2015 by not giving them the higher internal cost estimates for the reactors, instead using a lower estimate provided by Westinghouse that they knew was impossibly low.

SCE&G is blaming regulators for not paying close enough attention and warning the Public Service Commission if they lower rates too much the utility will have to declare bankruptcy. Environmental and consumer groups and many lawmakers want all or most of the $2 billion paid to the utility for the failed plants to be returned.

In cross-examination, SCE&G lawyers pointed out Walker blamed the Office of Regulatory Staff, which acts as a consumer advocate, for accepting testimony about the reactors over grave concerns it was wrong.

SCE&G lawyers pointed out Browne's resignation letter mentioned nothing negative about the company and thanked the company for the opportunity.

Browne and Walker are testifying on behalf of Office of Regulatory Staff, which wants rates cut permanently because the utility lied to them about the project.