A former executive of South Carolina utility Scana Corp has pleaded guilty to his role in what investigators called a "breathtaking" conspiracy to hide unresolvable problems in a project to build a $10bn nuclear power plant.
Stephen Byrne, 60, an executive vice president of Scana, repeatedly assured investors, taxpayers and state officials that two new units at the VC Summer nuclear power station would be finished in time to qualify for a federal nuclear production tax credit, worth up to $1.4bn, that is set to expire on 31 December this year.
Prosecutors said Byrne knew the scheme was hopelessly behind and over budget, but that his and co-conspirators’ deceptions allowed Scana to obtain rate increases from Scana’s customers to continue financing it.Â
"This conspiracy to defraud Scana customers is breathtaking in scope and audacity," said FBI Special Agent in Charge Jody Norris. "The FBI remains committed to ensure all those responsible for this crime, which only served to enrich a few by robbing families and communities within South Carolina, are held accountable."
Byrne, who was in charge of Scana’s nuclear work, agreed a plea deal with prosecutors and has been cooperating with investigators. He faces up to five years in prison.
Peter McCoy, US attorney for the district of South Carolina, told reporters outside the courtroom after the plea: "Today is a good start to years upon years of investigation, so we’re mighty proud about what happened here today."
The project to add two reactors to the station was abandoned by Scana subsidiary SCE&G three years ago after it became mired in cost overruns and then fell foul of the collapse of Westinghouse, a subsidiary of Japanese engineer Toshiba, which was carrying out the work.
The first concrete pour for unit two was made in March 2013, making it the first reactor to start construction in the US in 30 years. The first concrete for unit three was completed in November of the same year. However, the original $9.8bn cost of the scheme had increased to roughly $25bn by 2017.
As an example of Byrne’s deception, prosecutors gave evidence that in July 2016, Byrne submitted written testimony to the South Carolina Public Service Commission, the Office of Regulatory Staff and the public stating that the construction schedule was "logical and appropriate" when Byrne knew it was unreliable and unlikely to be achieved.
As part of the plea deal, the Virginia-based utility Dominion Energy, which acquired Scana in 2018, will provide $4bn to state rate-payers as damages for criminal activity that took place in 2015 and 2016.
The US Securities and Exchange Commission filed a second lawsuit against Byrne and former Scana chief executive Kevin Marsh in February, also connected with misleading statements about progress at VC Summer.
Byrne joined Scana in 1995 and has more than 30 years’ experience in the utility industry. He has been released pending sentencing.
Image: The second containment vessel ring being placed on unit two in February 2017 (Santee Cooper)