Securities officials probing S. Carolina nuke plant fiasco

COLUMBIA, S.C. — Securities regulators are investigating a scuttled nuclear reactor construction project in South Carolina, according to a release Tuesday from one of the plant’s co-owners.

In the notice issued to its investors, SCANA said it had been served with a subpoena and would “fully co-operate” with the probe by the U.S. Securities and Exchange Commission and couldn’t provide any details about the inquiry’s timeline or outcome.

The probe comes on the heels of legislative, state and federal investigations into the failed V.C. Summer Nuclear Station project. SCANA subsidiary South Carolina Electric & Gas Co. and state-owned utility Santee Cooper spent nearly $10 billion over a decade before shuttering it earlier this year.

State lawmakers have held a series of hearings questioning company executives about the project’s dissolution. State police, at the request of legislators and the state’s top prosecutor, have launched a probe into “potential criminality” on the part of SCANA and SCE&G. Federal authorities subpoenaed documents from both utilities.

Thousands of people lost their jobs when the project failed. More than half a dozen lawsuits have been filed, some by ratepayers angry they’ve been charged $2 billion to pay interest on debt, via a series of rate hikes since 2009, without any power being generated.

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Costs associated with the abandoned project currently account for 18 per cent of SCE&G customers’ bills, even though the project has been terminated. The Office of Regulatory Staff – the state agency that represents the public interest in utility cases – has asked state regulators to force SCE&G to stop billing customers for the failure.

Other entities including Attorney General Alan Wilson have sought permission to intervene in that case, calling it his sworn duty to “seek to protect the rights” of South Carolina citizens, including SCE&G’s more than 700,000 ratepayers. SCANA executives say halting the payments would reduce the company’s annual revenues by more than $445 million.

Gov. Henry McMaster has said he’s seeking a way to improve the situation, negotiating with power companies to buy all or part of Santee Cooper, with the goal of either completing one or both of the partially complete reactors or refunding customers the billions they’ve sunk into the project. Last week, two powerful legislative leaders emphasized only lawmakers can sell a state-owned utility, stressing it makes no sense to do so at a “fire sale price” following the abandonment of the multibillion-dollar project.

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Kinnard can be reached at http://twitter.com/MegKinnardAP. Read more of her work at http://bigstory.ap.org/content/meg-kinnard/

Meg Kinnard, The Associated Press