Former CEO of SCANA will end up in jail as a result of the VC summer nuclear project

Kevin B. Marsh, former CEO of SCANA Corp., was sentenced to two years federal prison after pleading guilty to the postal and wire fraud conspiracy related to the VC Summer nuclear expansion project.

Marsh is the first defendant in the case to be convicted of the investigation. However, the U.S. Attorney’s Office has heard from Stephen Byrne, former executive vice president of SCANA and former COO of South Carolina Electric & Gas Co. (SCE & G), and Carl Churchman, former vice president of Westinghouse Electric Corp. and the project manager of the VC Summer nuclear project. It also indicted Jeffrey Benjamin, former senior vice president of Westinghouse, in a 16-point indictment. Benjamin has pleaded his innocence, however, and acting US Attorney for the South Carolina District M. Rhett DeHart has said that all charges against him are just charges – the defendant is presumed innocent until proven guilty.

In Marsh’s case, however, the evidence presented in court showed “that he deliberately defrauded installment payers while overseeing and managing the operations of SCANA – including the construction of two reactors at the VC Summer Nuclear Power Plant – in order for the company to receive and withhold any rate increases that were imposed was able to use its tariff-paying customers and are entitled to tax credits of up to 2.2 billion US dollars, “reported the US prosecutor. When confronted with information in late 2016 that the project was delayed and that tax credits were at risk, Marsh and others held this information up to regulators to help keep the project going. “Marsh’s false and materially misleading statements, as well as other false and materially misleading statements by his co-conspirators, have enabled SCANA to maintain and maintain tariff increases that were imposed on SCANA’s customers,” the Attorney General said.

The VC summer fair

The Virgil C. Summer Nuclear Power Plant is located in Fairfield County, South Carolina, near Jenkinsville. Unit 1 – which was commissioned in 1984 – is a Westinghouse pressurized water reactor with three loops and a net summer output of 978 MW. SCE & G (a subsidiary of SCANA) owned and operated two-thirds of the facility, while the South Carolina Public Service Authority (a state electricity and water company known as Santee Cooper) owns the remaining one-third. Dominion Energy acquired SCANA in 2019 and now owns this stake in the facility.

In 2008, SCE & G and Santee Cooper applied to build two new Westinghouse AP1000 reactors on site. The reactors – Units 2 and 3 – were originally scheduled to start operating in 2016 and 2019, respectively, with SCE & G owning 55% of the units and Santee Cooper the remaining 45%. The cost of the project was estimated at approximately $ 10.5 billion.

However, the project quickly fell behind and costs skyrocketed. Westinghouse, which also supplied two AP1000 blocks for the Vogtle nuclear expansion in Georgia, which was also plagued by deadline delays and cost overruns, was financially paralyzed by the projects. Westinghouse then filed for Chapter 11 bankruptcy in March 2017. With more than $ 10.4 billion in construction costs and interest reportedly spent by the owners on the VC Summer project, and analysis suggesting the project cost more than $ 25 billion in total, Dollar wouldn’t be completed before 2024, SCANA and Santee Cooper decided to end the project on July 31, 2017.

Executive knew about problems but covered them up

After the project ended, a “comprehensive multi-year joint investigation” was conducted by the US Attorney’s Office, the Federal Bureau of Investigation, the US Securities and Exchange Commission, the South Carolina Attorney General and the South Carolina Law Enforcement Division. Marsh’s verdict is the result of that investigation.

“Kevin Marsh has deceived regulators and customers into helping SCANA financially,” said Susan Ferensic, special adviser with the FBI’s Columbia Field Office, in a statement. “Unfortunately, the actions of Marsh and other executives left the South Carolinians bearing the brunt of the financial burden of the failed summer nuclear station.”

“Because of this scam, a $ 11 billion nuclear ghost town paid for by SCANA investors and customers now stands empty in Jenkinsville, SC,” DeHart said.

US District Judge Mary Lewis sentenced Marsh to 24 months in federal prison followed by three years of court-ordered surveillance. There is no parole in the federal system. Judge Lewis also fined $ 200,000. Under the terms of his plea agreement, Marsh paid $ 5 million in federal forfeiture prior to his conviction. The U.S. Attorney’s Office also has collaboration agreements with Dominion Energy and Westinghouse that together provide more than $ 4 billion in tax relief.

“This sentence should remind every company and its executives that there is a price for those who conspire to commit fraud,” said Ferensic.

–Aaron Larson is the editor-in-chief of POWER (@AaronL_Power, @POWERmagazine).