COLUMBIA — Newly disclosed documents show critical information was scrubbed two years ago from a report about the V.C. Summer nuclear project — insight that would have alerted investors and regulators about some of the project's problems long before they came to light.
A draft audit by Bechtel, the country’s largest construction and engineering firm, shows the company warned SCANA and Santee Cooper in 2015 that the new nuclear reactors wouldn’t be finished in time to collect $2 billion in federal tax credits.
But SCANA and Santee Cooper apparently didn't share Bechtel's findings then with investors, state leaders or utility regulators. Instead, they touted their progress and asked regulators for hundreds of millions of dollars to expand the project's budget.
And when Bechtel submitted its final audit in February 2016, the findings were gone altogether.
The new disclosure raises more questions about SCANA and Santee Cooper's decisions to push forward with the reactors. The $9 billion project was cancelled in July.
It also could cause more problems for SCANA and its executives, who are being investigated by state law enforcement officers, a federal grand jury and the U.S. Securities and Exchange Commission.
"If they would have brought this forward, they knew their investors would have gone crazy," said Rep. Russell Ott, a Democrat from St. Matthews who helped lead a special House committee that investigated the nuclear project. "This is a cover up. This is deception at its core. The bottom line is they lied to everyone and they did it intentionally."
Santee Cooper did not immediately respond to questions about the information that was removed from the final report. Eric Boomhower, SCANA's spokesperson, said Bechtel's schedule information "was too cursory and superficial to be of any use."
SCANA plans to explain the "significant limitations" of Bechtel’s report to South Carolina utility regulators, Boomhower said.
The partnering utilities paid Bechtel more than $1 million for the company's analysis of the troubled construction project.
In recent months, questions swirled about Bechtel’s drafts. Documents obtained from Santee Cooper suggested the initial audit findings were worse than the final report, which was presented to state lawmakers in September.
A timeline put together by Santee Cooper’s leaders showed Bechtel delivered its initial audit findings on Oct. 22, 2015, and that the first draft was done Nov. 9 of that year.
But in the weeks that followed, George Wenick, an Atlanta-based attorney hired by SCANA and Santee Cooper, continued to battle with Bechtel over what would be included in the final document.
According to Santee Cooper's records, Wenick wanted Bechtel to ax criticisms about the utilities' oversight. The attorney with Smith, Currie and Hancock also wanted Bechtel to remove any mention of the reactors being finished after 2020, the deadline needed to receive the federal tax credits.
In the end, more than 30 pages that analyzed the project’s construction schedule disappeared from the audit. The deletions also included Bechtel's estimated completion dates, which said the reactors wouldn't be finished until after the valuable tax credits expired.
Instead, Bechtel’s staff merely reported that the current schedule and completion dates were “at risk."
The earlier version of Bechtel's audit was finally released on Tuesday by the Office of Regulatory Staff — the state's utility watchdog — after the agency obtained the draft report from state-run Santee Cooper.
A Bechtel spokesman declined to comment on the changes, saying the company was bound by a confidentiality agreement.
Officials with the Office of Regulatory Staff said the draft report clearly shows that SCANA withheld even more information than they previously thought.
"There was information that was withheld from us and the Public Service Commission," said Jeff Nelson, the chief counsel for the Office of Regulatory Staff.
After receiving Bechtel’s findings in the fall of 2015, SCANA continued to assure the state’s seven member utility commission that the reactors would be finished before December 2020.
The Public Service Commission, in turn, increased SCANA’s nuclear budget by more than $800 million and approved a fixed-price agreement with Westinghouse — the project's primary contractor. Westinghouse filed for bankruptcy earlier this year.
SCANA’s failure to disclose Bechtel’s schedule analysis could now cost the company, as state lawmakers and the Office of Regulatory Staff push to cut off more than $37 million a month that the utility is collecting from its roughly 700,000 customers.
"I think it's clear evidence that the executives of SCANA knew beyond a shadow of the doubt that the project was in peril," said Ott, the state representative. "Everything they were working for and working toward had come off the tracks."