The deal – which was exclusively reported by this news outlet prior to it being announced via press release at 2:00 p.m. EST on Saturday – was struck after extensive negotiations between SCANA, Virginia-based Dominion Energy (which is in the process of acquiring SCANA), attorneys for the plaintiff class (led by Columbia, S.C. attorney Pete Strom) and the office of S.C. attorney general Alan Wilson.
“In reaching this agreement, we have been able to secure more than $2 billion in relief and accountability for the people of South Carolina,” Strom said in a statement touting the settlement. “We thank the attorney general’s office for their hard work throughout this case and particularly in securing the return of funds set aside for executive bonus payments to the ratepayers.”
That was one of the key tenets of the agreement: The liquidation of a “rabbi fund” intended to pay out huge bonuses to many of the executives whose failure contributed to this debacle almost as much as the state lawmakers who set the command economic disaster in motion eleven years ago.
Wilson hailed the deal as “the result of countless hours of work by our office seeking to make SCE&G customers whole for the abandonment of the failed V.C. Summer nuclear project.”
“This milestone ends our pursuit for restitution to ratepayers, but does not end our inquiry into the individual actors that may have contributed to the project’s failure,” he added, referring to the ongoing criminal investigations into the botched project.
SCANA – which maintained its denial of the various allegations put forward by the lawsuit – said it was “pleased that we were able to achieve a mutually acceptable resolution of this matter so that we can keep our focus on moving forward with the merger with Dominion Energy.”
The deal represents a significant victory for ratepayers in the aftermath of #NukeGate – the state of South Carolina’s spectacularly failed government intervention in the nuclear power business. It also dramatically improves the position of both Dominion and SCANA as they appeal to the S.C. Public Service Commission (SCPSC) to approve their $15 billion merger.
As of this writing, the SCPSC – which represents the final hurdle to this deal – is considering a number of different proposals from the two companies offering varying amounts of future relief to ratepayers.
According to the SCANA release, the settlement agreement provides for the following:
1) A credit of up to $2,000,000,000.00 in future electric rate relief will inure to the benefit of the Common Benefit Fund in favor of class members over a period of time established in the proceeding pending before the Public Service Commission of South Carolina
2) A cash payment of $115,000,000.00, which will include the full value of the SCANA rabbi trust funded in January 2018 that was created in whole or in part for executive change-in-control payments; and
3) Transfer of SCE&G owned real estate or sales proceeds from the sale of real properties, including among others, the Ramsey Grove Plantation; the original Charleston Gas & Light Building at 141 Meeting Street in Charleston; and certain Otarre properties in Cayce.
For those of you uninitiated, in 2007 SCANA and government-run utility Santee Cooper announced their intention to build a pair of next generation nuclear reactors at the V.C. Summer generating station near Jenkinsville, S.C. These reactors were supposed to have been operational in 2016 and 2017, respectively, at a cost of $9.8 billion.
The money was spent, the reactors simply weren’t finished … and the utilities couldn’t afford the $10-16 billion price tag necessary to finish them. Last July, Santee Cooper pulled the plug on the project – killing an estimated 5,600 jobs and throwing the state’s energy future into turmoil.
In addition to this lawsuit and the aforementioned criminal investigations, #NukeGate has sparked a broader discussion over the role of government in the energy marketplace – and the danger posed to consumers by unaccountable monopolies.
Expect those debates to continue even if the SCPSC approves the Dominion-SCANA deal …
“Just exchanging an existing private power provider that has a monopoly for a new one that has the same monopoly won’t fix our energy problems,” state senator Tom Davis said in an opinion piece published over the weekend in The (Florence, S.C.) Morning News. “There’s now a window for real reform; that’s the VC Summer debacle’s silver lining.”
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