COLUMBIA — South Carolina swapped engineering for litigation, construction designs for federal subpoenas and two nuclear reactors for a debt larger than the state government's annual budget.
It's been just more than a year since Westinghouse Electric, the primary contractor on South Carolina's nuclear project, filed for bankruptcy. Eight months have passed since the utilities behind the project — SCANA Corp. and Santee Cooper — abandoned the $9 billion they spent on a pair of unfinished reactors at V.C. Summer Nuclear Station.
Since then, scores of emails, memos, letters, voicemails and secretive audits have exposed the concerns SCANA and Santee Cooper harbored for years.
They have deflated the utilities' narratives about the project's demise. They have raised sharp concerns about the reactor design Westinghouse was peddling, and the company's ill-fated attempt to run one of America's first nuclear projects in decades.
But what happens now? Who's going to foot the bill? Will ratepayers get their money back? Is anyone going to jail?
More to the point, what are South Carolina's leaders doing about one of the biggest financial crises in state history?
Those questions remain unanswered in a swirl of political and legal uncertainty. But one thing is clear: The $9 billion failure isn't being cleaned up anytime soon.
The payments made each month by 1.6 million electric ratepayers are still at stake. The fates of two of South Carolina's largest utilities are still up in the air. The web of lawsuits tied to the project are just beginning. And criminal investigations are unfolding behind the scenes.
The South Carolina Legislature has been the center of attention for more than half a year now, as lawmakers deciphered what went wrong and formulated plans to protect electric customers.
Senators and representatives took part in a marathon of legislative hearings last fall. They grilled SCANA's executives. They peppered Santee Cooper's leaders with questions. And they listened as South Carolinians complained about their inflated power bills — some of the highest in the country.
But for all of that work, the Legislature has yet to pass a single bill in response to the nuclear boondoggle, largely because of delays in the Senate.
They haven't even repealed the Base Load Review Act, the now-infamous law that kick-started construction at V.C. Summer and allowed SCANA to charge customers for the reactors before they were finished.
In fact, lawmakers have given up on most of their initial legislative plans because of legal and financial constraints.
State lawmakers dropped their earlier promises of refunding the roughly $2 billion that electric customers have already paid into the unfinished reactors, fearing a legal challenge. They'll leave that up to the lawsuits filed against the utility companies on behalf of ratepayers.
They did away with plans to prohibit Santee Cooper, a state-owned utility, from raising its electric rates to pay off the $4 billion it borrowed for the project, fearing insolvency. They'll leave the utility's rates in the hands of Santee Cooper's board of directors.
They also agreed that the Legislature should not be responsible for deciding whether SCANA and its buyer get to charge its customers another $3.8 billion for its share of the project. They'll leave that to the utility regulators on the state's Public Service Commission.
The only thing lawmakers have left to decide is whether to temporarily clip SCANA's electric rates for the rest of the year. And even with that, they are at odds.
The House wants to cut SCANA's rates by 18 percent — the entire amount collected for the reactors. The Senate is considering a 13 percent reduction. And Gov. Henry McMaster is threatening a veto unless the charges are wiped out completely.
A stalemate could follow.
A web of lawsuits
Like any multi-billion dollar screw-up, the abandoned nuclear reactors have attracted more than a few lawsuits.
SCANA, the parent company of South Carolina Electric & Gas, is being sued by its ratepayers, who fronted cash for the reactors that will likely never produce a single watt of electricity. Wall Street investors are also looking for a payout, alleging that SCANA's executives misled them about how construction was really going to inflate the company's stock price.
Santee Cooper is being sued by South Carolina's 20 electric cooperatives, which want to block the state-run utility from charging the co-ops' 772,000 customers for the nuclear reactors.
Santee Cooper, in turn, has hired a consulting firm to consider whether to file a claim against SCANA for reportedly mishandling oversight of the project.
Westinghouse, meanwhile, is emerging from the bankruptcy process that led to this fiasco. It's leaving behind a mountain of liability and unpaid bills, and it's being sold to a group of investors who will take it out of the business of building new reactors.
Some of the lawsuits are already heating up.
The lawyers representing SCANA's ratepayers are set to question the project's top accountant later this month — a woman who alleged in 2016 that SCANA's leaders lied in order to prop up the company's earnings and cash in on their executive bonuses.
Probing SCANA's prudency
SCANA may have its hands full fighting off lawsuits in state and federal court, but much of the company's focus is on sealing a proposal to be purchased by Dominion Energy in a deal worth $14.6 billion.
To do that, SCANA's attorneys will have to work their magic in the Public Service Commission, as the state's regulators prepare to decide the biggest utility case in the history of South Carolina. For all of the attention placed on the Legislature, the commission is where the rubber is going to meet the road.
The state's seven regulators will have a say in whether Dominion's deal gets approved; no matter what, they decide how much SCANA can charge for the nuclear project. But they have an even bigger task: defining the word "prudent."
The regulators need to review the entire nine-year project. They need to determine if SCANA hid information, like a secretive audit of the construction project that emerged last September. And they have to decide whether SCANA's decision to forge ahead with the project was "prudent" considering what they knew about Westinghouse's engineering problems and the lagging construction schedule.
Lawyers opposing SCANA are already gearing up for that fight.
Environmental groups, such as Friends of the Earth and the Sierra Club, are requesting additional information from the beleaguered utility company. And the state's utility watchdog agency — the Office of Regulatory Staff — is reviewing earlier cases to figure out what information SCANA did and didn't share.
All of that information will come into play by the end of the year, when the utility commission is expected to hold public hearings and issue a ruling.
As state lawmakers debated SCANA's electric rates last month, Sen. Mia McLeod, D-Columbia, threw out one of the biggest questions that looms over the situation.
"Is anyone going to jail?" McLeod asked.
The answer to that question is being hashed out behind the scenes, as a federal grand jury, the U.S. Securities and Exchange Commission and the State Law Enforcement Division continue to investigate.
All of those law enforcement groups became involved in the project not long after it was canceled last July.
The federal grand jury and the U.S. Attorney's Office in South Carolina subpoenaed documents from SCANA and Santee Cooper in early September. SLED announced it was getting involved in late September, after lawmakers requested the agency's assistance.
And the Wall Street regulators with the Securities and Exchange Commission filed their own subpoena with SCANA in early October.
Since then, nothing has been announced.
But that hasn't stopped SCANA's executives from hiring private attorneys. The company's former CEO Kevin Marsh, former Vice President Steve Byrne and a host of project managers at V.C. Summer have all lawyered up. So, too, has SCANA's current CEO Jimmy Addison.
Meanwhile, more documents and information continue to emerge.
Thad Moore contributed to this report.