#NukeGate: SCANA’s Failed Gambit

Crony capitalist utility screws up the one card it had to play …

Memo to SCANA: Learn how to play a losing hand.

South Carolina’s crony capitalist government-run utility, used to dictating terms to its bought-and-paid for politicians, got dealt a measure of its own medicine this week when state lawmakers – themselves badly exposed by the Palmetto State’s ongoing #NukeGate debacle – refused to play ball with the company.

What happened?  SCANA attempted to use the planned ouster of two top corporate officials – CEO Kevin Marsh and top nuclear office Stephen Byrne – as a means of “cutting a deal” with state legislators.

There was just one problem …

This news site blew it up … then reporter Avery Wilks of The (Columbia, S.C.) State newspaper blew it up.

As we exclusively reported on Saturday morning, “early reports indicated the besieged Cayce, S.C.-based company may have been attempting to use Marsh’s ouster as a ‘bargaining chip’ – a way for SCANA to gain leverage in its multi-front war with lawmakers, state and federal investigators and aggressive attorneys currently pressing a multitude of claims against the company.”

No such leverage was available, however … meaning SCANA essentially screwed up the one card it had to play (a card which, frankly, should have been played a long time ago).

This week reporters John McDermott and Andy Shain of The (Charleston, S.C.) Post and Courier confirmed that leaders in the S.C. House of Representatives “refused to cut a deal with SCANA for Marsh and Byrne’s departure.”

Oy …

Compounding the damage of this botched overture, SCANA has decided to replace Marsh from within – elevating its current finance chief Jimmy Addison to the role of CEO.

How many ways can you say “brain dead?”

(Click to view)

(Via: SCANA)

Marsh, Addison and Byrne are among the top SCANA executives who made bank while presiding over #NukeGate – a multi-billion command economic intervention in the energy marketplace that has failed spectacularly, leaving Palmetto State taxpayers and ratepayers on the hook for a pair of new nuclear reactors that now may never be built.

In fact, ratepayers are continuing to pay $37 million per month on these reactors, even though work on the project has been abandoned.

To recap: SCANA and its state-owned partner, Santee Cooper, spent the past decade building a pair of next-generation AP1000 pressurized water reactors in Jenkinsville, S.C. at a cost of $9.8 billion.  The money was spent, but the reactors were never finished.  In fact they’re not even half-finished – with the cost to complete them ranging anywhere from $9-16 billion.

Unable to pony up that kind of cash, Santee Cooper pulled the plug on the project 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) and throwing the state’s energy future into chaos.

Recently released documents revealed executives at the two utilities knew over a year-and-a-half ago that the project was doomed – yet continued to raise rates on consumers anyway.  Not surprisingly, the project’s failure has spawned numerous lawsuits and a pair of criminal investigations – one state, one federal.

It’s also cratered SCANA’s stock price and prompted a desperate effort on the part of current governor Henry McMaster to unload Santee Cooper … for a song.

Meanwhile the politicians who presided over this spectacular command economic failure have been busy trying to “investigate” what amounts to a disaster of their own making.

Which brings us to an important point …

While members of the S.C. House leadership were correct to rebuke any overture from SCANA, they remain squarely on the hook for this multi-billion dollar disaster.  Same with their colleagues in the State Senate and former South Carolina governor Mark Sanford, who failed to veto the now notorious legislation that enabled SCANA and Santee Cooper to effectively socialize their investment risk on this failed project.



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