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#NukeGate: SC Judge Refuses To Dismiss SCANA Lawsuits

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A South Carolina circuit court judge refused to dismiss multiple lawsuits against crony capitalist energy provider SCANA this week – setting the stage for a potentially explosive class action suit against the embattled utility.

One that could potentially disrupt a multi-billion dollar deal …

The Cayce, S.C.-based utility’s “motion to dismiss is denied,” S.C. circuit court judge John Hayes ruled on Friday, a decision which was exclusively reported by John Monk of The (Columbia, S.C.) State newspaper.

Five class action lawsuits against SCANA have been consolidated into one case – with Columbia, S.C. attorney Pete Strom being appointed lead counsel for the plaintiffs.  Strom’s firm filed one of the very first suits against SCANA in the aftermath of #NukeGate – a spectacularly failed government intervention in the energy industry resulting in the abandonment of a pair of next-generation nuclear reactors in Fairfield County, S.C.

SCANA had a 55 percent stake in the project, the other 45 percent stake was held by government-owned utility Santee Cooper.

A huge chunk of its cost – approximately $2 billion – was subsidized by ratepayers via the now-notorious Base Load Review Act (BLRA),which was advanced by liberal lawmakers and allowed to become law in 2007 by former governor Mark Sanford.

Seven months ago, Santee Cooper pulled the plug on the reactors – killing an estimated 5,600 jobs, squandering billions of dollars in investment and throwing the state’s energy future into chaos.

Just eight days before it bailed on the project, the state-owned power company announced massive rate increases on customers tied to “costs associated with nuclear construction and other system improvements.”  The utility has also given its former leader a multimillion-dollar, taxpayer-subsidized golden parachute – even though documents released last summer showed its executives (and SCANA’s leaders) knew two years ago that the project was doomed.

Those documents are likely to factor prominently in Strom’s case against SCANA – which has the potential to complicate the proposed sale of the utility to Virginia-based Dominion Energy.

Dominion’s deal doesn’t get ratepayers off the hook for the costs of the project, but it does provide an estimated $1.3 billion in reimbursement to SCANA customers and would reduce a chunk of the 18 percent “nuclear surcharge” ratepayers are continuing to pay on the abandoned project.

As for Santee Cooper customers, their debt-addled utility is being eyed by Florida-based NextEra Energy.  In fact just this week our news site reported on the details of that rumored offer – which includes ratepayer relief subsidized in part by taxpayers.

Obviously all of these deals have the potential to be upended by various legal battles … so we’ll be keeping a close eye on these proceedings.

Also watching the case closely?  S.C. attorney general Alan Wilson, whose office has previously weighed in on the BLRA.

“Even though the state is a defendant in this case, we are pleased that Judge Hayes’ ruling allows the case to move forward,” Wilson said in a statement.  “We have always maintained that the BLRA is unconstitutional as applied, and we firmly believe the ratepayers should have their day in court. The judge’s ruling is a victory for ratepayers.”

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