(CN) - A class of South Carolina residents claims in court that SCANA, an energy holding company, violated a federal racketeering statute by charging customers for the cost of a multi-billion dollar nuclear project that won’t be completed.
In a federal lawsuit filed in Columbia, S.C. on Sept 22, the class says SCANA and its partner on the nuclear project, the Santee Cooper utility, knew the project was coming undone, but continued to deceive the public and the Public Service Commission with optimistic statements that allowed them to continue to bill consumers for the work.
The lawsuit names only SCANA as a defendant. Santee Cooper is not a party to the litigation.
The partners abandoned development of the nuclear plant on July 31, and SCANA had spent $9.8 billion to bring it to fruition.
The holding company then announced that consumers will be charged $2 billion over the next 60 years to cover the cost of shutting the project down.
The class claims SCANA and Santee Cooper increased utility rates 14 times to cover project costs. It claims the executives were aware the plan was headed for failure from the beginning.
The complaint says that even after Betchel Corporation released a 2016 report pointing to significant problems with the project, SCANA awarded top executives with bonuses for promoting “operational excellence" in developing the nuclear plant.
Among other issues allegedly identified in the Betchel report were contractors' reliance on plans that were not specific to the reactor project, making it impossible to calculate costs and deadlines, and necessitating numerous design changes.
It stated SCANA should hire a management company and reassess the project, however executives ignored the recommendations, the plaintiffs claim.
On Monday, leaders in the South Carolina House of Representatives asked the State Law Enforcement Division to investigate SCANA for possible “criminal fraud” related to the partially built nuclear reactors.
A House panel was also scheduled to hold a hearing on the matter on Tuesday hoping to gain more clarity on what went wrong with the project.
The class is represented by Brian Gambrell of the Law Offices of Jason E. Taylor in Columbia.
Its seeks actual, compensatory and consequential damages.
A representative of SCANA could not immediately be reached for comment.
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