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Aug 11, 8:59 PM EDT

APNewsBreak: Suit accuses SC power co. of nuclear negligence


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WASHINGTON (AP) -- A South Carolina power company was negligent in charging its customers more than $1 billion to build nuclear reactors that have now been abandoned, according to a lawsuit filed late Friday afternoon.

The lawsuit obtained by The Associated Press accuses South Carolina Electric and Gas Co. of mismanaging the finances of the project at the V.C. Summer Nuclear Station and concealing money problems from its customers.

Plaintiff LeBrian Cleckley is seeking class action status.

State-owned utility Santee Cooper and SCE&G decided July 31 to halt construction on two new reactors they'd already jointly spent $10 billion to build, much of that paid by customers. The project was already years behind schedule and billions over budget when lead contractor Westinghouse declared bankruptcy in March, which voided fixed-price contracts aimed at stopping the escalation.

Executives of both utilities said they were forced to give up after determining the price tag for completing the project, budgeted at $11 billion total in 2008, had soared beyond $20 billion.

The whole deal, the lawsuit says, leaves SCE&G "in possession and ownership of hundreds of millions - if not billions - of dollars-worth of improved real property, personal property, and cash gained at the expense of the Plaintiff ... and thousands of other SCE&G customers."

But neither Cleckley nor any other of the utility's customers "will receive the nuclear power services promised by SCE&G, and funded by customer investment," according to the lawsuit.

A spokeswoman for SCE&G's parent company said it didn't comment on pending lawsuits.

Pete Strom, a lawyer for Cleckley, told AP the utility had wronged its customers for too long.

"The project has been mismanaged, and the customers want their money back," Strom said. "They owe a duty to their customers that they borrowed from, just like they would owe to their shareholders if they squandered their investment. The customers didn't get to decide if they wanted to invest."

According to the suit, SCE&G has more than 700,000 electricity customers in South Carolina and more than 350,000 natural gas customers.

Some customers may get somewhat of a reprieve. On Friday, Santee Cooper's board dropped plans for two consecutive rate hikes, canceling the approval process for average increases of 3.5 percent in 2018 and 3.9 percent in 2019. A vote on the requested hikes had been set for December.

The scuttled nuclear project already accounts for 18 percent of SCE&G's residential electricity bills and more than 8 percent of Santee Cooper's. SCE&G is seeking permission from state regulators to recoup an additional $5 billion over 60 years. Those regulators approved all nine of SCE&G's rate hike requests since 2009.

Gov. Henry McMaster said this week that he's talking with other utilities about the possibility of buying out Santee Cooper's 45 percent share of the project or even buying the state-owned utility outright as a way to renew construction and complete at least one of the partly built reactors.

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Kinnard can be reached at http://twitter.com/MegKinnardAP. Read more of her work at http://bigstory.ap.org/content/meg-kinnard/

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