SCANA Corp. is adding two outside directors to investigate whether its executives and board members knew about problems with the company’s failed nuclear project – and whether they hid them from investors.
The investigators, who will become an independent committee of SCANA’s board, are tasked with deciding if the company should sue its own management team and the board itself.
The internal probe announced Friday is the latest twist in the legal saga swirling around SCANA, the Cayce-based owner of South Carolina Electric & Gas, nearly a year after it called off construction on a pair of nuclear reactors north of Columbia.
The company is already being sued by investors who have seen the value of their shares plunge in the past year.
It’s not uncommon for companies to name special committees to investigate their top brass after they’re sued by shareholders. It’s a step that gives them an outside perspective on their executives’ conduct, since it’s possible for companies like SCANA to pursue the same claims as their investors.
SCANA said Friday that its internal investigation will include former executives and board members, along with its current staff. That’s significant because Kevin Marsh, its chief executive officer throughout the project’s final years, and Steve Byrne, its operations chief, retired at the end of last year.
Leading the internal SCANA investigation is Patricia Galloway, a consultant on major energy projects. The company said Galloway has four decades of experience advising companies on managing risk and overseeing mega-projects.
She will be joined by Jeb Bachman, a former partner at the accounting firm PricewaterhouseCoopers. He ran the firm’s U.S. audit operations before retiring in 2015.
SCANA has been punished by Wall Street since work halted on its expansion of the V.C. Summer Nuclear Station. The company owned just over half of the scuttled $9 billion project, and it has been the focus of a legal and political firestorm since.
The backlash has cost SCANA two-fifths of its valuation, worth billions in all. Meantime, the project accounts for nearly a fifth of SCE&G ratepayers' monthly electricity bills.
The nuclear project’s demise has also triggered a raft of lawsuits brought by SCE&G’s electricity users and investigations by the FBI, State Law Enforcement Division and the U.S. Securities and Exchange Commission. No agency has filed criminal charges against the company’s management.
SCANA's stock price rebounded briefly earlier this year after Virginia-based Dominion Energy agreed to buy the embattled company in a deal then worth $14.6 billion. But it has dropped back as investors began to doubt that the deal would make it through South Carolina's testy political and regulatory landscape.
The deal did win a piece of good news Friday, though. The tie-up received the blessing of the Federal Energy Regulatory Commission, which oversees the nation's electricity grid. The deal had previously been OK'd by the U.S. Department of Justice and utility regulators in Georgia, where SCANA owns a large natural gas business.
But the deal still hinges on South Carolina's regulators and whether they'll let Dominion charge SCE&G customers $3.8 billion for the project over the next 20 years. A decision is expected by the end of the year.