VC Summer Jan 31 2018 IMG_3685B.jpg

An aerial shows the the V.C. Summer nuclear project. High Flyer/Provided

COLUMBIA — Just six months after the first concrete was poured at the V.C. Summer Nuclear Station in 2013, project partners SCANA and Santee Cooper were taking their contractors to task for costly delays — and they were getting ready to lawyer up.

In a previously undisclosed email, SCANA's former CEO Kevin Marsh warned Westinghouse that both South Carolina utilities had serious concerns about cost overruns and design delays that put "potentially unrecoverable stress" on the existing construction schedule to add two nuclear reactors. 

Westinghouse's response a year later was simple: SCANA and Santee Cooper knew what they signed up for when they agreed to pay for the first-of-their-kind reactors.

The two utilities knew that Westinghouse didn't have a finished design when they inked a deal in 2008, Westinghouse CEO Danny Roderick explained in a July 2014 letter obtained by The Post and Courier. They understood Westinghouse was finishing the design when construction began in 2012. Everyone understood, he said, that a large number of engineering changes might be "a normal part of the construction process." 

But Westinghouse had a request: The companies needed to keep the fight out of public view. If they didn't, it would have a "decidedly negative effect on everyone involved in the project," Roderick said in the 2014 letter. 

The newly-released communications highlight the high level of angst just months into a lengthy project in Fairfield County, north of Columbia. The problems that plagued the reactors from the start led to Westinghouse going bankrupt and doomed the $9 billion project. SCANA and Santee Cooper abandoned the reactors last summer.

SCANA and Westinghouse did not respond to questions about the communications on Monday. Santee Cooper declined to comment.

While the utilities privately bickered with the contractor, electric customers paid more than $2 billion for reactors that will never churn a kilowatt of electricity.

SCANA's executives had earlier assured Wall Street investors that the project wasn't suffering from spiraling schedules and inflated budgets like past nuclear construction.

"We hear about nuclear project's being over budget or costs being rampant," Steve Byrne, SCANA's former chief operating officer, told the investors in New York City in June 2013. "I want to reinforce that is not the case with this project." 

But three months later, Byrnes' boss, Marsh, was scolding Westinghouse for similar problems. 

"I don't have to remind you that continuing delays and cost overruns are unacceptable from a public perspective and could have serious effects," Marsh wrote in a September 2013 letter. 

Shortly after Marsh sent his letter, Santee Cooper's former CEO Lonnie Carter implored SCANA officials to consider contacting the Atlanta-based law firm Smith, Currie and Hancock to assist the utilities in their already-troubled relationship with Westinghouse. 

"I assume they would represent SCANA and Santee Cooper in any litigation," Carter said in an email. "If that is the case, I recommend that we get them involved." 

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In the months that followed, the contract disputes remained unresolved as construction continued. More than a year after Marsh sent his sharply-worded email, the utilities and Westinghouse were still arguing over who was responsible for the cost overruns and schedule delays that continued to mount.

Marsh and Carter drafted a letter that accused Westinghouse of "taking advantage" of their "cooperative nature." They even began to consider withholding payments to Westinghouse, according to documents reviewed by The Post and Courier. 

While SCANA and Santee Cooper paid $1 million for an audit on the construction project that found problems with the work, the utilities never sued Westinghouse.

The emails and letters were obtained as part of a legal request by Friends of the Earth and the Sierra Club, two environmental groups that have repeatedly challenged SCANA in front of the state utility regulators and the South Carolina Supreme Court.

Bob Guild, the attorney for the two environmental groups, said the utilities were too optimistic about using the untested reactors to usher in a new age of nuclear power.

"They jumped the gun with this premature design," Guild said. "They were having to redesign on the fly."

Thad Moore contributed to this report.

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.