It was "Media Day" at the V.C. Summer Nuclear Station, Sept. 21, 2016 — months before the public finally learned about the construction meltdowns, months before the protesters, the angry calls for investigations and resignations.
Kevin Marsh, SCANA's chairman and chief executive officer, stepped to the podium.
Marsh, 62, doesn't naturally project the kind of power you might imagine in a stereotypical CEO. He has an open, bookish face and carries himself with a slight slouch. On that September morning last year, he wore wire-rim glasses and a pale blue button-down shirt, no tie, business casual, as if in a private work meeting.
He spoke quickly in a drawl rooted in his upbringing in Athens, Ga. "You're about to tour a site that's perhaps the biggest construction project in the history of South Carolina,” he said about the effort to build two new nuclear reactors in Fairfield County. “Certainly it’s one of the most important.”
Then, six minutes into his remarks, he posed a question to himself: "People ask, ‘If you could do it again, would you make the same decision?’ Absolutely, I would make the same decision," he said, then doubled down. “I feel as strongly today — probably even stronger today than I did back in 2008 — that this is the solution for us, for a clean energy future."
Not mentioned that morning was how the project was foundering — and had been for years.
Away from the public and press, Marsh and other top officials at SCANA sent email after email about their frustrations. As far back as 2014, Marsh co-wrote a scathing 14-page letter to its contractor, Westinghouse Electric, with a list of complaints.
In early 2016, a consultant produced a confidential report highlighting fundamental threats to the project's success.
Yet, Marsh didn't mention the blunders that day in September. Instead, he talked about "all the great progress we've made.”
Marsh declined to comment for this story, but when friends and colleagues talk about him, they use words like "unassuming" and "genuine" and "heck of a nice guy."
Still, as lawmakers and federal and state investigators try to wrap their minds around the project's failure and what happened to the $9 billion spent on it, they’ll encounter the public and private faces of Kevin Marsh.
Who is this unassuming accountant who rose through SCANA's ranks to lead a risky push to build a new generation of nuclear reactors? And does his rise provide any clues to the project's spectacular collapse?
From Athens to Columbia
Marsh's late father, the Rev. Ralph Olin Marsh, was a charismatic Episcopal preacher affectionately known in Athens as the Dean of Saturday Football Parking at the University of Georgia. His father earned this moniker after selling parking spaces to football fans from other schools, including some who were surprised they couldn't park on church property for free. The reverend was quick to chew out these freeloaders, Marsh recounted in a gathering in 2015. "They would come over and they would say, ‘I can't believe a man of the cloth would talk to me like that.’ And I would say, 'You need to understand first that he started out in the Navy.'"
Like his father, Marsh could both meet and defy stereotypes. The reverend drilled values of hard work and compassion into his children. And Marsh had plenty of jobs growing up. He delivered newspapers, pumped gas, mowed lawns and sold grandfather clocks from a local store. But, “we were preacher’s kids,” he said in a 2006 profile, which meant that he and his brother were prone to mischief. He compared his antics to those of the kids in the movie "The Sandlot." “… As I look back on the things we did, I don’t think we ever did anything that was wrong but, buddy, did we go right up to that line plenty of times.”
He also loved fast cars, largely because of his grandfather, an auto mechanic he called “Boppy.” He and his grandfather worked on cars in the summer. Marsh would go on to race a souped-up 1967 Mini Cooper.
When he wasn't fixing cars, he might be found playing the drums.
“Most people probably wouldn’t know that I play the drums, and that I like the hard rock stuff,” he said in the 2006 profile that appeared in The Times and Democrat of Orangeburg. “I have a drum set upstairs in my house. It’s a great stress reliever.”
He graduated early from high school and enrolled at age 16 in the University of Georgia. “I'm not sure I knew there was another college other than Georgia because I always planned on going there," he said in a 2015 speech in Athens. He was married his junior year to Sue Sexton, whom he'd known since middle school.
And though he enjoyed hard rock and motor sports, he found himself drawn to a more conventional career path. He graduated from Georgia with a bachelor's degree in accounting and worked for a time
with Deloitte & Touche in Columbia. He took a job with South Carolina Electric & Gas Co. in 1984, the same year the original V.C. Summer nuclear reactor went online.
A steady stream of promotions followed: vice president and controller in 1989; chief financial officer of SCANA Corp., SCE&G's parent company, in 1996.
He and his wife and daughters eventually moved into a large house in Irmo. His roots in Columbia deepened. He sat on the board of Epworth Children’s Home “for his maximum eight years” before transitioning off this past year, said the Rev. John E. Holler Jr., president and chief executive officer.
“He was very insightful,” Holler said. “A good business mind but a big heart as well." Marsh often made big-ticket purchases for children at Epworth. “But he wouldn’t want his name associated with it,” Holler said. “I think that’s the kind of person he is.”
His home in Irmo was large — about 4,500 square feet — but not unusually so given his growing salary. But he did spend big bucks on his car collection. He has 10 cars worth at least $824,000, according to Richland County tax records. They include a $290,000 Aston Martin Vanquish, a classic 1960 Austin Healey "bugeye" Sprite that can fetch $30,000-plus restored, and a new $117,000 BMW M6. He reportedly favored the Aston Martin for weekend getaways to the mountains.
In 2006, this understated man who loved fast cars was named president of SCE&G, second only to SCANA's CEO and chairman, Bill Timmerman, who also had started out as an accountant.
“I feel like my goal,” Marsh said in a company profile, “is to keep a firm hand on the rudder and do my part to keep the wind in the sails — not to turn the ship around, because it’s headed in the right direction.”
Still, Marsh found himself steering a company amid an ocean of change. Deregulation in the 1990s had generated waves of mergers and consolidation. Growing concerns about climate change and air pollution made coal-fired power plants more costly. Meantime, new fracking technologies had increased supplies of natural gas. This drove down prices for this fuel source, triggering a further shift away from coal.
Amid these changes in 2006, a group of the state’s top business leaders gathered for dinner in Columbia. Michael Couick had just been elected president of the Electric Cooperatives of South Carolina, a trade group that represents rural power providers.
“It was a get-to-know Mike kind of dinner,” Couick recalled. Dining with him were Darla Moore, a prominent Wall Street investment banker and philanthropist from Lake City; Lonnie Carter, CEO of Santee Cooper; and Bill Timmerman, CEO of SCANA.
At the time, state business leaders were looking hard at creating industry “clusters,” a concept promoted by Michael E. Porter, a Harvard Business School professor. “The topic of the night was, ‘What would it take to create a nuclear cluster?’” Couick recalled. “Bill Timmerman was the cheerleader for nuclear. And it wasn’t just about (reducing) carbon, it was a lot about the politics in a state that fully embraced nuclear where a lot of other states didn’t."
Couick was struck by Timmerman's passion. "What I was hearing at dinner was a real emotional commitment to nuclear as a path forward. Kevin Marsh inherited a lot of this. This was Timmerman's dream."
And Timmerman's company typically got what it wanted. SCANA deployed scads of money to work the state’s political levers. The company poured more than $1.1 million into campaign coffers of state elected officials since 2000, according to a Post and Courier analysis of data compiled by the National Institute on Money in State Politics.
Much more went to squads of state and federal lobbyists — about $12 million during the past seven years, according to data from the State Ethics Commission and Center for Responsive Politics. SCANA also reportedly paid money to political influencers such as Richard Quinn & Associates, a consultant now at the center of a state investigation into political corruption.
This influence paid off in 2007, when state lawmakers passed the Base Load Review Act. Drafted with assistance from Belton Zeigler, a lawyer for SCE&G, the law’s first words were: “An act to protect South Carolina ratepayers.”
The act, in fact, shifted financial risks of building a new nuclear plant from SCANA’s investors to ratepayers. In the past, customers paid for plants after they came online. But the new law allowed utilities to raise rates for construction costs before the plant produced any juice. It was akin to paying for a house as it was built instead of buying it when it was finished. Marsh and others said this pay-as-you-go approach would save ratepayers over the long haul. Critics said it gave the utilities a blank check.
But by 2011, the site in Fairfield County had been cleared. Westinghouse and its subcontractors had begun erecting the cooling towers and other structures. And SCANA had moved from its location in the heart of downtown Columbia to a new $142 million campus across the Congaree River in Cayce. Unlike the nuclear reactors, the company took out a loan to finance its new headquarters. A moat-like brook surrounded the new building, in part to deter would-be car bombers. It had its own pharmacy and gym.
After the move, Timmerman, who had a more forceful demeanor than Marsh, decided to retire. Timmerman, who didn't return calls to his homes in Georgia and North Carolina, told The Post and Courier in 2011 that the expansion of the nuclear plant was the highlight of his career. The board of directors gave him a $360,000-a-year contract to do consulting on the project, though it’s unclear what his role was and what work he performed. SCANA officials didn’t reply to questions about this issue.
And stepping into his shoes was Timmerman's longtime understudy, Kevin Marsh.
Are you a Frisbee or a rubber ball?
At a lecture about leadership for the University of Georgia's business school, Marsh told students that he sometimes divided people into two types — Frisbee people and rubber ball people.
Frisbees had two sides; the top had slick labels, but its underside was empty and hollow and looked down on others as it flew through the air, he said. Inevitably, a Frisbee fell to the ground.
“But rubber balls keep bouncing,” he said, adding that he’d once fired two people for being Frisbee types. “I said, 'Nobody's going to help you get back up because you're a Frisbee.'" He urged the students to be rubber balls.
When asked about leadership, Marsh talked frequently about treating people fairly, the importance of patience and listening. He was known to visit SCANA's call centers and listen as customers talked about their financial struggles. "They don't want to complain about the cost of their service. What they're complaining about is how to pay for it."
He talked about integrity. "We’ve always got somebody watching us,” he told the Georgia students. “But you have to do things right. If you don't, you get penalties, fines, and under the worst circumstance, you can go to jail. I don’t care to do that. I like to work hard, and go home at night and sleep well. It’s a lot easier to do things right than to try to cut corners."
He didn't start out to be a leader, he continued. "I just wanted to be successful, raise a family. But I took risks. If you don’t take risks, you're not likely to be a leader."
That year, the V.C. Summer expansion was looking riskier by the month.
Westinghouse had long touted its new AP1000 reactor design. The Pittsburgh company's website cites the “unequaled safety” and “economic competitiveness” of its technology, which it predicted would lead to a generation of new and safer nuclear reactors. A giant bucket was the key to making this happen.
Older reactors depended on pumps to pour water on an overheating reactor. But the AP1000 design called for a vessel containing 6 million pounds of water over the reactor. If something went awry, a waterfall would rain on the reactor, carrying away heat in clouds of steam.
But an AP1000 hadn't yet been built, and taking it from design to finished product still required tens of thousands of new and detailed engineering blueprints. A confidential internal analysis obtained by The Post and Courier warned in 2011 that Westinghouse wasn’t set up to do this engineering, much less build the reactors. The white paper predicted costly delays and other problems. By 2013, those predictions had come true.
“You literally can’t make up the errors that were propagated in this thing," an engineer recently told The Post and Courier. "I’ve never seen anything like this in my life. It was beyond comprehension. They enshrined incompetence.”
In private, SCANA and Santee Cooper officials seethed over the delays.
On May 6, 2014, Marsh and Carter sent a letter to Westinghouse with a 14-page summary of grievances — a letter made public just a week ago. It accused Westinghouse managers of "taking advantage of our cooperative nature” and cited the "poor progress" of the construction. It documented how Westinghouse's original reactor design lacked "maturity" and concluded with threats of litigation. "Our frustration continues to mount. You have made promise after promise, but fulfilled few of them."
In public, SCANA and Santee Cooper officials told a different story.
Two weeks before Marsh and Carter sent the grievance letter, Stephen Byrne, SCANA's vice president of generation and transmission, told Wall Street analysts that delays were due in part because of "inclement weather and two ice storms." He showed slide after slide of the construction site. "You can see that things are really starting to take shape." He added that "project costs are down approximately $623 million from" what South Carolina regulators had originally approved.
A similar pattern of private hand-wringing and public optimism happened throughout 2015 and 2016. During this time, SCANA and Santee Cooper quietly hired Bechtel, the nation's largest engineering and construction company, to analyze the project.
In early February 2016, Bechtel delivered its report, which painted a picture of continuing disarray and waste. Among other things, the report said Westinghouse lacked legitimate schedules, engineers still had substantial work to do on their designs, and construction productivity was poor.
Yet a month later, Marsh wrote shareholders about the "substantial progress on initiatives important to our company such as our new nuclear construction project." Not long after Marsh's letter, Jimmy Addison, SCANA's chief financial officer, told another group of Wall Street financial analysts that workers "were doing a tremendous job" and that progress was "better than we expected." The Bechtel report wasn't made public until last month.
Despite the project’s problems, SCANA’s board of directors continued to reward its executive team.
In 2012, his first full year as CEO, Marsh took home about $5 million. Since then, his compensation package has increased 22 percent, to $6.1 million. That sum included $1.4 million under the company’s executive incentive plan, which credited him for his “oversight of our new nuclear construction activities.”
Marsh wasn't alone. Other top SCANA executives were rewarded with high salaries and hefty bonuses. During the past five years, the company's top five executives raked in at least $62 million in compensation.
Salaries rose and, behind closed doors, so did tensions over the plant's progress.
In June 2016, Marsh sent an email to Toshiba's executive officer. Toshiba is the parent company of Westinghouse. “We have no doubt that we have been the victim of financial malfeasance," Marsh said about a recent set of negotiations.
But outside SCANA's boardrooms and offices, the V.C. Summer public relations machine remained in full throttle.
On Media Day, Sept. 21, 2016 — the first such event since 2013 — Marsh took pains to minimize the problems.
Yes, there were challenges, he acknowledged. But “I would offer if you've ever built a house, whether it took 12 months or 18 months, you had a couple issues. You had a couple of change orders along the way, and the likelihood is that didn't reduce the cost of your house as you went through the process."
He told reporters: "We're excited about where we are."
In reality, the once high-flying project was about to crash to the ground.
About seven months after Media Day, Westinghouse filed for bankruptcy protection. SCANA and Santee Cooper executives huddled to discuss options. Santee Cooper eventually withdrew its support. And in late July, the two utilities pulled the plug.
Since then, Carter, Santee Cooper's CEO, has announced he's retiring, with $800,000 a year in retirement benefits; Gov. Henry McMaster is leading the charge to sell the state-owned utility outright; state and federal investigations are under way; shareholders have filed lawsuits; and 5,000 employees at the work site were left without jobs.
Meantime, SCANA's stock price has fallen by a third, from $74 a share to $48, or about $3.5 billion in value.
As for Marsh, the project's failure has propelled him from the cloistered confines of SCANA's Cayce campus into the spotlight. He's been grilled by lawmakers and regulators in Columbia, including a hearing where he was stricken by a kidney stone. In August, he traveled to North Charleston to explain what went wrong and what can be done about it. "Not a day has gone by, before I put my head on the pillow, that I haven't prayed for guidance and wisdom," he told the group.
Now, the preacher’s son who rose to the highest ranks in his industry, faces an uncertain future as the consequences of his company’s risky bet plays out in public, effects that hundreds of thousands of electricity customers will feel every month when they get their bills.
Thad Moore and Andrew Brown contributed to this report.