The U.S. Securities and Exchange Commission has charged two former top executives with South Carolina utilities of defrauding investors about the V.C. Summer Nuclear Plant expansion project it abandoned in 2017.
Former SCANA Corp. CEO Kevin Marsh and former Executive Vice President Stephen Byrne are named in the SEC complaint. The release also accuses SCANA subsidiary South Carolina Electric & Gas Co. (SCE&G, now known as Dominion Energy South Carolina following a 2018 merger) of making false and misleading statements about the Summer nuclear expansion.
The SEC alleges that Marsh, Byrne and SCE&G misled investors about building two new nuclear units that would qualify the company for more than $1 billion in tax credits. The accused allegedly claimed that the project was on track even through they knew it was behind schedule and unlikely to qualify for the credits, according to the complaint.
“When making statements to the public, executives cannot provide false information or half-truths,” said Richard R. Best, Director of the SEC’s Atlanta Regional Office. “This case demonstrates the SEC’s commitment to holding companies and individuals at the highest corporate levels responsible when they mislead investors and fail to provide them with full and fair information.”
The SEC’s complaint, filed in federal court in South Carolina, charges SCANA, SCE&G, Marsh, and Byrne with violations of the antifraud provisions of the federal securities laws, and charges SCANA, SCE&G, and Marsh with reporting violations. The complaint seeks a permanent injunction, return of allegedly ill-gotten gains along with prejudgment interest, and financial penalties from all defendants, and an officer and director bar against Marsh and Byrne.
SCANA and SCE&E has worked for years and spent close to $9 billion on construction for the V.C. Summer expansion. They cited costs and delays in justifying a decision to suddenly abandon the project in August 2017.
SCANA took a $200 million hit on its earning in the fall of 2017 following the abandonment. The proposed two units never generated power.
Marsh stepped down from his CEO duties a short time later. The sudden abandonment drew investigations from several South Carolina legislative bodies and the SEC.
The CEO for project partner Santee Cooper, Lonnie Carter, also stepped down following the debacle. Earlier this week, Santee Cooper executives Michael Crosby and Marion Cherry, appeared before South Carolina legislators in a hearing on the Summer matter.
Nearly Virginia-based Dominion Energy acquired SCANA in a major $15 billion merger one year later. In its own statement this week, Dominion noted it was fully cooperating with the SEC in the investigation over a pre-merger activity and had worked with shareholders on a settlement..
“We are taking this matter very seriously and are reviewing the complaint to determine our next steps,” reads the Dominion statement. “In December 2019, we executed a settlement agreement with former SCANA shareholders for $192.5 million, which was preliminarily approved by the federal district court in South Carolina earlier this month. We believe that our cooperation and extensive remediation efforts to date will be a factor in the resolution of this matter.”
Plans to find new buyers for the expansion prior to Dominion’s offer were unsuccessful. Dominion has previously said it doesn’t expect to revive the project.