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Kevin Marsh, CEO of SCANA Corp., answered questions during an August meeting at North Charleston City Hall. File/Leroy Burnell/Staff

Newly obtained internal emails reveal that Kevin Marsh, SCANA Corp.’s chief executive officer, earlier this year accused Toshiba Corp. of “financial malfeasance” in the failed V.C. Summer nuclear project.

In the harshly worded emails, Marsh told a top Toshiba executive, “We are left to wonder whether Toshiba ever had any real intent" to complete the project.

These emails and other letters obtained by The Post and Courier reveal a rapidly disintegrating relationship between the two utilities in charge of the nuclear project, Santee Cooper and SCANA, and their lead contractor, Toshiba-owned Westinghouse Electric. 

They also suggest that SCANA and Santee Cooper quietly prepared more than a year ago for the possibility that Westinghouse and Toshiba might fall into bankruptcy and bring the nuclear project down in the process.

In an October letter to Marsh, Lonnie Carter, Santee Cooper’s chief executive officer, noted that SCANA had agreed in June 2016 to hire bankruptcy lawyers “to help us think through Toshiba/Westinghouse insolvency scenarios.”

But SCANA’s public portrayal of the project was much different. During a hearing before state utility regulators that October, Bob Guild, an attorney for the Sierra Club, specifically asked SCANA officials about the possibility of Westinghouse’s insolvency. SCANA officials shrugged off the question.

The relationship between the utilities and Westinghouse took a sharp turn earlier this year when Westinghouse admitted that it never had a construction schedule for two reactors at the V.C. Summer Nuclear Station near Jenkinsville.

The stunning admission came despite the contractor's repeated assurances over the years that one existed. In response, officials with SCANA and Santee Cooper started questioning the motives of Westinghouse and its parent company but received few answers, the correspondence shows.

"Unfortunately, our experience with Westinghouse ... has been set in a trend of continuous deceit and non-transparency," Carter told Jose Gutierrez, the interim president and CEO of Westinghouse, in a May 1 letter.

Marsh, the SCANA CEO, used even harsher language in June emails to Mamoru Hatazawa, executive officer of the Japanese conglomerate.

“We have no doubt that we have been the victim of financial malfeasance by WEC and Toshiba,” Marsh wrote.

Marsh also told Hatazawa that SCANA and Santee Cooper were "left to pick up the pieces of Toshiba’s refusal to keep its commitments,” and that “We are left facing the reality that Toshiba, as has been reported in the press repeatedly, is not acting honorably and appears to only respond to force.”

At the time, subcontractors at the nuclear site had filed hundreds of millions of dollars in mechanics' liens. Marsh told Toshiba the liens amounted to roughly $500 million while Hatazawa only wanted to pay $200 million.

Hatazawa told Marsh in a June 8 email that the $500 million figure wasn't realistic, adding, "if, and only if, SCANA can show that it actually paid more than $200 million" for the liens would Toshiba consider a greater amount.

Marsh fired back the next day, telling Hatazawa in an email that Toshiba "is not acting honorably."

"We continue to be taken aback by what we see as Toshiba's lack of respect," for the owners of the V.C. Summer project, Marsh wrote, adding that SCANA is "now left to pick up the pieces" of a "catastrophic situation" created by Westinghouse and its parent.

Hatazawa responded in an email that "we truly regret" having put Santee Cooper and SCANA "into the current difficult situations" but then said Toshiba already had done much to make amends, including selling its profitable chip business. Hatazawa did not respond to an email requesting comment.

Eric Boomhower, SCANA spokesman, confirmed that Marsh sent the email. He said it came amid negotiations with Toshiba, and that SCANA secured a settlement that was roughly $500 million more than what Toshiba was contractually obligated to pay. "We are committed to giving 100 percent of the net proceeds SCE&G receives from the Toshiba settlement to our customers," Boomhower said. 

Officials of Santee Cooper and SCANA, which owns of S.C. Electric & Gas Co., said they felt misled about the project's progress as early as 2015.

The purported construction schedule was the basis for more than $9 billion that Santee Cooper and SCANA had spent on the project before halting construction on July 31. It also was a key factor in annual rate hikes state regulators approved for SCE&G as part of a state law that put the utility's customers on the hook for nuclear construction costs.

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Carter called the realization that Westinghouse lied about the schedule "devastating" in his letter to Gutierrez.

"Long term damage has been done to our business relationship," wrote Carter, who questioned the $5.4 million weekly payments Westinghouse demanded to keep construction going in the time between the contractor's bankruptcy and the decision to halt the project in late July.

Carter asked Westinghouse for a detailed breakdown of how that money was being spent, but the contractor refused, according to the letter, saying only that it was to pay employees who were still at the construction site.

"Is this the transparency you promised?" Carter asked Gutierrez.

In a separate email to Santee Cooper's board of directors, Carter said: "If all of these funds are attributed to salaries, this equates to $110 per hour per employee for a 40-hour week."

Sarah Casella, Westinghouse spokeswoman, said that once Westinghouse officials received Carter's letter, “Westinghouse leadership took immediate action to address issues raised within the letter from Santee Cooper. The concerns were resolved and we considered the matter closed.”

Santee Cooper spokeswoman Mollie Gore said transparency issues with Westinghouse "came up again and again" during utility board meetings as the power provider tried to figure out whether to complete or scrap the nuclear project.

"There was a systemic problem of transparency with Westinghouse and it definitely impacted the project," Gore said.

Construction of the V.C. Summer expansion began in 2009, with the new reactors seen by the utilities as a way to meet what they thought would be fast-growing demand for electricity in coming years. That demand hasn’t panned out and the nuclear project was years behind schedule and billions of dollars over budget at the time construction was halted.

An analysis conducted by the utilities after the Westinghouse bankruptcy showed the project, which was supposed to be finished by 2020 at a cost of about $14 billion, actually would have cost at least $21 billion and wouldn’t have been completed until years later.

The Post and Courier staff writers Glenn Smith and Tony Bartelme contributed to this report.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_