Additional lawsuits were filed today involving #NukeGate – the state of South Carolina’s spectacularly failed command economic intervention in the energy industry.
According to reporter Meg Kinnard of The Associated Press, a lawsuit seeking class action status has been filed against SCANA – the publicly traded utility that participated in a since-scrapped nuclear power plant expansion in Jenkinsville, S.C. along with with state-owned utility Santee Cooper.
Specifically, the suit alleges that the Cayce, S.C.-based company issued “false and misleading statements to investors” about the status of the project.
That suit was filed by S.C. Senator Marlon Kimpson and several attorneys at the Motley Rice law firm in Mount Pleasant, S.C.
Its filing comes just days after the firm announced it was “reviewing allegations that SCANA hid the project’s troubles from shareholders and regulators, wasting billions of consumer and investor dollars.”
Crangle’s suit aims to hold SCANA’s board and its top executives “accountable for abandoning their fiduciary obligations to the shareholders.” Specifically, it seeks to compel a dozen top SCANA executives to return more than $21 million in bonuses received over the past decade, arguing that they demonstrated “a conscious disregard for their obligations as directors and executives of the company.”
SCANA’s stock closed at $51.24 on Wednesday – down a whopping thirty percent on the year.
In fact, SCANA’s stock is down 24 percent since July 31, when Santee Cooper announced it was pulling the plug on the V.C. Summer nuclear power plant expansion project.
“They should’ve just built the damn plant – would’ve been cheaper than the political, legal, and regulatory costs they’re incurring,” one financial analyst told us.
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It’s been a furious week of news related to #NukeGate.
On Tuesday, the S.C. State Law Enforcement Division (SLED) announced it had opened a criminal investigation into the botched project. Also on Tuesday, S.C. attorney general Alan Wilson released a lengthy opinion calling into question the constitutionality of the now-notorious Base Load Review Act. That’s the law that allowed SCANA and Santee Cooper to raise rates on consumers to subsidize portions of their investment risk associated with the failed project.
Meanwhile last week, news broke that agents of the Federal Bureau of Investigation (FBI) and the U.S. Securities and Exchange Commission (SEC) had launched a federal investigation related to this project (news of which was exclusively reported by this website).
To recap: SCANA and Santee Cooper spent the past decade collaborating on this project – which was supposed to have been operational a year ago at a cost of $9.8 billion. The money was spent, but the reactors were never finished. Or even half-finished. Not only that, estimates indicate they could cost another $9-16 billion to complete.
Unable to pony up its share of that amount, Santee Cooper pulled the plug on the deal on July 31 … killing an estimated 5,600 jobs, squandering billions of dollars in investment (including more than $2 billion raised through rate increases on consumers), throwing the state’s energy future into chaos and costing the government utility its credit rating.
Documents released earlier this month revealed the utilities knew over a year-and-a-half ago the project was doomed – yet continued to raise rates on consumers anyway.
Badly exposed state lawmakers have been doing their best to whitewash their culpability in this matter – efforts we have been exposing from the very beginning. These machinations were doomed to fail considering many of the Senators and representatives currently “investigating” this disaster were directly responsible for bringing it about.
Stay tuned … the fallout from this scandal appears to be only just beginning …
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