V.C. Summer (copy)

Santee Cooper is a partner with South Carolina Electric & Gas in the V.C. Summer Nuclear Station expansion, where they are adding two reactors. File/SCE&G/Provided

COLUMBIA — As they fend off lawsuits from workers, ratepayers, contractors and investors, the partners in South Carolina's failed nuclear project have turned on each other.

South Carolina's largest company, SCANA, is accusing its utility partner Santee Cooper of misleading state leaders for years about its role in the failed $9 billion project to build two nuclear reactors north of Columbia. SCANA's top lawyer, Jim Stuckey, made that allegation in a recent letter obtained by The Post and Courier. 

Stuckey accused state-owned Santee Cooper of painting an inaccurate picture that minimized its input and oversight on the V.C. Summer plant expansion in an attempt to shift blame for the expensive debacle onto SCANA. Stuckey sent the letter, dated Oct. 4, to Michael Baxley, his counterpart at Santee Cooper.

SCANA, the parent of South Carolina Electric & Gas, also accused Santee Cooper of failing to share a key document ahead of a legislative hearing last month, leaving SCANA officials blindsided and unprepared for lawmakers' questions. 

"SCE&G leadership has showed tremendous restraint in not attempting to answer every mischaracterization that Santee Cooper has made in its letters and emails over the past several years," Stuckey wrote. "SCE&G's reticence to respond to each Santee Cooper email and letter that omits important details and context — out of a desire to be respectful to the company's project partner — has contributed to the confusion about the facts."

The finger-pointing takes place as both utilities face uncertain futures. McMaster is working to sell debt-laden Santee Cooper, and SCANA's stock price has fallen by nearly 40 percent over the past year. Tensions grew after more than 5,000 plant workers lost their jobs and 2.7 million electric customers found themselves faced with paying the abandoned project's costs for decades.

"The governor believes this is yet another reason Santee Cooper being sold to protect taxpayers makes sense," McMaster spokesman Brian Symmes said about the in-fighting between the utilities.

The V.C. Summer project, started in 2009, drew national attention because it promised to usher in a new era of nuclear power in the United States. Instead, the project became a crater of debt that left electric customers on the hook for a squandered investment larger than the state's $8 billion annual budget. The two utilities opted in late July to abandon the oft-delayed, over-budget project.

The project’s failure is now being investigated by two state legislative committees, the FBI, the state Attorney General’s Office and the State Law Enforcement Division.

The partners have bickered before — notably over the public release of an audit last month that found waste and mismanagement at the Fairfield County construction site. But this new stinging criticism from SCANA came after Santee Cooper sent a letter to Gov. Henry McMaster in September detailing steps the Moncks Corner-based power provider took in the wake of the audit. 

Santee Cooper has said it ceded control on the expansion to SCE&G because the Cayce-based utility owned 55 percent of the project. Santee Cooper owned a 45 percent share that it has tried to sell since 2010.

SCE&G took the lead in budgeting and planning the expansion, working with regulators, negotiating with vendors and managing "all aspects of the day to day design and construction at the site," Baxley wrote to McMaster last month. SCE&G had more than 100 employees to oversee the Jenkinsville site, while Santee Cooper said it had just three.

SCANA leaders dispute this depiction of Santee Cooper's role, saying the utility's letter to McMaster was "materially misleading, and continues a pattern" of inaccurate correspondence. SCANA's retort also was shared with McMaster's office. 

"(Y)our letter mischaracterizes the management of the project and does not provide Gov. McMaster with an accurate portrayal of the informed, active role Santee Cooper played in all aspects of the process," Stuckey wrote. "Santee Cooper was involved in every major decision made since the inception of the project."

Santee Cooper stands behind its September letter, a spokeswoman said.

Stuckey, however, wrote that Santee Cooper officials had "full access" to meetings between SCE&G and contractors. They also took part in visits to various manufacturing plants, including those in China and Japan, and participated in meetings with the Nuclear Regulatory Commission, he stated.

"SCE&G solicited and considered Santee Cooper's input on every significant decision made," Stuckey wrote. "Your letter characterizes Santee Cooper as merely a minority partner with no meaningful input into the project, but that conclusion is not supported by the facts."

Stuckey also disputed the number of employees each utility had at the plant site. He said SCE&G managed and paid engineers, accountants and other employees who worked on behalf of the entire project, "not for one utility or the other." Stuckey said SCE&G asked Santee Cooper to send additional workers to Jenkinsville.

SCANA's main issue was over Santee Cooper's "inexplicable insistence" to hire San Francisco-based contractor Bechtel to conduct an audit of the project in 2015. SCE&G was leery of hiring Bechtel because it was a competitor to the plant's contractors and had control over one of its nuclear projects taken away in 2011. Santee Cooper complained to McMaster about delays in finalizing the agreement with Bechtel, but SCE&G needed time to convince contractors to share information with a competitor, Stuckey wrote.

Many of the findings in the Bechtel audit, released by McMaster over SCANA's objections on Labor Day, were addressed when the utilities worked out a fixed-price contract that put the burden of overruns onto contractors, Stuckey said.

Stuckey also accused Santee Cooper of making SCANA and SCE&G officials look bad during a hearing last month before a S.C. House panel examining nuclear project. Santee Cooper officials attached the action plan it drafted in response to the Bechtel audit in documents it provided lawmakers. But they didn't share that action plan with their partners, he stated.

"Members of the House Committee on Utility Ratepayer Protection questioned SCE&G about this document during the hearing, presumably not realizing that this document was not part of the Bechtel Report and SCE&G had never seen the document," Stuckey wrote. "Representatives were noticeably frustrated by SCE&G leadership's inability to comment on a document they had never seen, and no one from Santee Cooper stepped forward during the hearing to explain the mistake."

Santee Cooper officials apologized privately to SCE&G about "this significant misunderstanding" but failed to tell McMaster what happened, Stuckey wrote.

A Santee Cooper spokeswoman acknowledged Tuesday that the utility failed to provide that internal document to SCANA. But she said the utility did share the recommendations it contained with SCE&G officials.

The partners also differed over Santee Cooper's request to bring in more experts to oversee the troubled project last year. Santee Cooper said in late 2016 that SCE&G was "slow or non-responsive to our requests."

SCE&G said the delay came because Santee Cooper tried to intimidate the utility into hiring its preferred contractor, Bechtel. They did so by threatening to publicly release Bechtel's damaging audit if the company didn't get the job, Stuckey wrote.

"(T)he conversations around this specific topic were unnecessarily complicated by Santee Cooper's intimation that it would publicly disclose the Bechtel Report if SCE&G did not acquiesce to Santee Cooper's demands to add more personnel and hire an outside engineer, specifically Bechtel," Stuckey wrote. "It appears Santee Cooper and Bechtel were working together to force SCE&G to hire Bechtel despite the cost and Bechtel's lack of any construction experience" in meeting Nuclear Regulatory Commission's regulations.

SCE&G, despite misgivings, worked to add Bechtel at Santee Cooper's request but refused an open-ended contract, Stuckey wrote. A Santee Cooper spokeswoman said the utility just wanted additional oversight, "be that Bechtel or someone else."

An agreement with Bechtel was never reached before the plant's main contractor declared bankruptcy this year, a move that led Santee Cooper to abandon the project on July 31. Without its partner, SCE&G pulled out hours later.

Thad Moore contributed to this report.

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Columbia Bureau Chief

Shain is Columbia Bureau Chief for The Post and Courier. He was editor of Free Times and was a reporter and editor at The State, The Charlotte Observer and The (Myrtle Beach) Sun News.