Insiders Doubted SCANA’s Ability to Manage Nuclear Project

Santee Cooper executives doubted SCANA Corp.'s ability to properly manage the V.C. Summer nuclear expansion project for years before the project was ultimately abandoned in July 2017, according to an article published by The Post and Courier, a Charleston, S.C., newspaper.

Santee Cooper-a state-run utility-partnered with SCANA as owners of the project; SCANA holds a 55% stake in the facility while Santee Cooper holds a 45% share. Yet, even as Santee Cooper insiders lamented SCANA's "ineptitude," the utility failed to raise red flags with state lawmakers or ratepayers and continued to pour money into the project.

According to The Post and Courier story, Santee Cooper leaders did prod SCANA to hold contractors responsible, and SCANA's then-CEO Kevin Marsh did respond by complaining to Westinghouse and CB&I-the contractors on the job at the time-but little improvement was made. Santee Cooper's vice president of nuclear energy reportedly called SCANA's team "a status quo group."

For years, Santee Cooper allegedly tried to convince SCANA to hire an outside firm to manage the project. It wasn't until CB&I negotiated its way out of the project that SCANA finally agreed to bring in Bechtel Corp. to do a project audit at a cost of more than $1 million. But even then, Santee Cooper insiders felt SCANA was resistant to the process and restricted access to at least some engineering and scheduling documents. However, The Post and Courier reported that a SCANA spokesperson refuted that claim. The audit was ultimately completed.

The 130-page report dated February 5, 2016, provided a scathing assessment of the situation. One discovery was that "plans and schedules are not reflective of actual project circumstances." Auditors found the detailed engineering design had not yet been completed and the issued design was "often not constructible." The first recommendation noted in the report was: "Develop an Owners' Project Management Organization (PMO) and supplement current Owner staff with additional EPC-experienced personnel dedicated to the project that are empowered with the roles, responsibilities, and accountabilities for making the needed project-related decisions to keep the project on track."

SCANA resisted implementing the recommendation as written, instead creating an oversight board to help with project management. Santee Cooper went along with the change, but after Westinghouse's bankruptcy, its leaders were reluctant to continue the project. In an email dated June 22, 2017, obtained by The Post and Courier, Santee Cooper Chief Financial Officer Jeff Armfield wrote to then-CEO Lonnie Carter and others, "[We] need to clearly communicate to SCANA that Santee Cooper is unwilling to proceed in any way (even 1 unit) with SCANA as a senior owner and/or operator."

About a month later, SCANA formally announced construction would be ceased on the two new nuclear units, and that it would promptly file a petition with the Public Service Commission of South Carolina seeking approval of its abandonment plan.

To read The Post and Courier article, see "Santee Cooper secretly griped for years about SCANA's 'ineptitude' in failed S.C. nuclear project."

-Aaron Larson, executive editor (@AaronL_Power, @POWERmagazine)

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