South Carolina attorney general Alan Wilson is weighing in on an ongoing legal dispute between Virginia-based Dominion Energy and Santee Cooper – the Palmetto State’s spectacularly failed government-run power provider.
In a letter sent on Wednesday (January 15, 2020) to Dominion’s general counsel, Carlos Brown, Wilson takes the company to task for “seek(ing) to stick 2 million of Santee Cooper’s ratepayers … with the cost of 45 percent of your multi-billion dollar purchase of SCE&G.”
SCE&G is a former subsidiary of SCANA, the crony capitalist West Columbia, S.C. company that was purchased by Dominion in December 2018. A month before that purchase became official, SCANA reached a massive settlement with ratepayers in a class action suit related to NukeGate – the botched construction of a pair of nuclear reactors in Jenkinsville, S.C.
Scheduled for completion in 2017, these two reactors were abandoned midway during construction when Santee Cooper – which owned a 45 percent stake in the project – decided to pull the plug on them.
NukeGate received a capable assist from the S.C. General Assembly, which allowed SCANA (which owned a 55 percent stake) to socialize more than $2 billion of its investment risk. Lawmakers and their appointed bureaucrats also allowed Santee Cooper to raise rates and rack up billions of dollars in debt related to the construction of the since-abandoned reactors.
The class action referenced by Wilson is one of several lawsuits which Dominion is attempting to get Santee Cooper to pony up on … with the company arguing that legal costs incurred in relation to the project should be shared by the two utilities based on their ownership percentages (as spelled out in their original corporate agreements).
Wilson’s letter is only focused on one of those cases, but he came down hard on the side of Santee Cooper – telling Brown that he hopes “Dominion’s assertion … that Santee Cooper bear a major share of the cost” of the settlement “is inaccurate.”
Take a look …
(Click to view)3-Amended.-Carlos-M.-Brown-Dominion-Letter-02183613xD2C78
(Via: S.C. Attorney General)
“Regardless of Dominion’s request as to other matters, there can be no reasonable legitimacy to asking Santee Cooper ratepayers to shoulder a 45 percent burden for settling a case in which Santee Cooper had no involvement,” Wilson wrote. “A deal was a deal and we trust that Dominion would honor that deal.”
Wait a minute, though … is it true that Santee had “no involvement” in the creation of this liability, though?
As Brown wrote in an October 21, 2019 letter to Santee Cooper general counsel Michael Baxley, the state-owned utility played a “causative role in the abandonment” of the project.
“Santee Cooper was an active partner to SCE&G in the management of the project and participated in every phase of the construction; and, following the contractor’s bankruptcy, it was Santee Cooper’s unilateral decision to suspend funding that triggered abandonment of the project,” Brown’s letter to Baxley noted (emphasis original).
Brown also alleged that “in a well-publicized effort to publicly castigate SCE&G as the scapegoat for abandonment, Santee willfully breached its obligations … and improperly disclosed project information.”
Brown’s letter to Baxley goes on to described the agreement between the two utilities regarding “potential claims against the owners” as being “clear and unambiguous.”
“Santee Cooper has wrongfully refused to accept responsibility for the potential losses to its own ratepayers,” Brown wrote. “And it consistently refuses to even acknowledge potential liability with any of the other project-related matters now pending.”
Here is that document …
(Click to view)Letter-from-Dominion-Energy-Re.-Santee-Cooper-02183620xD2C78
Dominion spokesman Ryan Frazier said Brown’s letter “was written to encourage Santee Cooper to collaborate with Dominion Energy to resolve Santee’s customer claims that were brought against both companies, and to remind Santee that Dominion had not sought contribution from Santee for the Lightsey customer case in a showing of good faith, notwithstanding contractual rights that entitled it to do so.”
“It is our hope that we can resolve Santee’s customers claims in a timely manner so that both companies can return their full focus to delivering safe, reliable and affordable energy to their customers,” Frazier added.
According to our sources, Santee Cooper and Dominion have been engaged in extensive negotiations related to a variety of legal claims related to NukeGate – although it is not immediately clear whether the two sides are close to an agreement.
As for Santee Cooper, it is currently staring down a potential sale – with state lawmakers awaiting recommendations on that subject from the administration of S.C. governor Henry McMaster.
Within the next two months, McMaster’s administration will present lawmakers with one option to sell the embattled utility and one option to allow a private company to manage it.
Santee Cooper will also present lawmakers with a so-called “reform” proposal, although this news outlet has repeatedly editorialized against the consideration of any plan that allows the utility to endure as a government-run entity.