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SCANA Slapped With Lawsuit

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#NUKEGATE CLASS ACTION

The fallout from #NukeGate is headed to a South Carolina courtroom … the first of what we suspect will be multiple legal entanglements related to the abandonment of a multi-billion dollar nuclear power project in the Palmetto State.

Two weeks ago, government-run energy provider Santee Cooper pulled the plug on the V.C. Summer project – a pair of half-completed nuclear reactors under construction in Jenkinsville, S.C.

The state-owned utility’s decision to terminate the V.C. Summer project killed at least 5,000 jobs, threw the state’s energy future into chaos and squandered billions of dollars in investment (including $2 billion coughed up by Palmetto State ratepayers).

Now a lawsuit has been filed seeking to recoup this investment, although the party named in the suit isn’t the government utility that killed the project – it’s a subsidiary of SCANA, the private sector utility that was partnering with Santee Cooper on the abandoned reactors.

SCANA’s subsidiary – SCE&G – was allowed to raise energy rates on consumers to fund the project thanks to the so-called “Base Load Review Act.”  This legislation – which former governor Mark Sanford allowed to become law – was supported by the vast majority of the state’s legislators at the time.

The lawsuit – filed on behalf of plaintiff LeBrian Cleckley by former U.S. attorney Pete Strom – alleges SCE&G was negligent in its management of the project and deliberately concealed information from its consumers.

It seeks class action status, citing that SCE&G has more than 700,000 electricity customers and more than 350,000 natural gas customers in the Palmetto State.

News of the lawsuit was reported exclusively by Meg Kinnard of The Associated Press.

“SCE&G has taken over $1 billion of their customers money to ‘invest’ for corporate benefit,” Strom said in filing the suit last Friday. “The project has been mismanaged and the customers want their money back.”

Strom added that “customers didn’t get to decide if they wanted to invest, SCE&G used their power with state government to force the working people of South Carolina to contribute to a project that should have been funded by them and not their customers.”

We agree … completely.

Of course as we’ve repeatedly stated, we believe the real onus for this debacle lies with Santee Cooper – which sandbagged SCANA on this project right up to the very end.

As we’ve pointed out, Santee Cooper’s political appointees proposed hiking rates on consumers to play for the reactors just eight days before unexpectedly pulling the plug.

That’s textbook deception.

“Santee Cooper pulled a bait and switch – signaling its intention to move forward with the V.C. Summer project one week before pulling the plug the next,” we wrote last week.

Also, the ultimate culpability for rate increases paid by SCE&G consumers lies not with SCANA but with the South Carolina politicians who enabled the authority to “socialize” their investment risk, to borrow the wording of S.C. Senator Tom Davis.

“We must we start taking broader steps to restore market forces in our energy sector and take as much power as possible out of the control of politicians and their special-interest supporters,” Davis said.  “Nothing less will suffice.”

We agree …

Whatever one thinks of this lawsuit’s merits, it is past time to get government out of the power generation business.

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