Columbia, South Carolina, USA : SCANA Corporation (SCG) and its subsidiary, South Carolina Electric & Gas Company (SCE&G), reached a $2 billion settlement agreement on Saturday with plaintiffs in a class action lawsuit over the costs electric ratepayers have made towards the VC Summer nuclear power plant project.
The lawsuit arose due to SCANA and SCE&G canceled construction of the VC Summer Units 2 & 3 nuclear power plants in July 2017. The Base Load Review Act had allowed SCANA and SCE&G to collect payments from electric rate payers during the construction of the cancelled nuclear power plants to pay for the plants’ costs. The average customer bill included $30 per month for the nuclear power plant costs. In the settlement, SCANA and SCE&G state that they deny the allegations made in the class action lawsuit.
The $2 billion settlement will come in the form of a credit in future electric rate relief for class members. The Public Service Commission of South Carolina will determine the time period in which the settlement will be distributed. A cash payment of $115 million will also be made to the class action suit members. Proceeds from the sale of SCE&G real estate will also be distributed to the class action suit members.
The settlement still requires court approval. The settlement agreement is also dependent on the Public Service Commission approving a merger between SCANA Corporation and Dominion Energy. Dominion Energy will be providing financial resources towards the settlement.
The lawsuit comes as several states have taken steps towards providing subsidies for operating nuclear power plants to prevent them from closing. In October, the US Court of Appeals for the Second Circuit upheld the Zero Emissions Credit subsidy for nuclear power plants in New York. In September, the US Court of Appeals for the Seventh Circuit upheld the Zero Emissions Credit subsidy for nuclear power plants in Illinois.
Below is the companies announcement of the settlement.
SCANA and SCE&G Settle Class Action Lawsuit with Attorney General and Plaintiffs Related to V.C. Summer Nuclear Costs
Plaintiffs Richard Lightsey, LeBrian Cleckley, and Phillip Cooper have reached an agreement with SCANA Corporation and South Carolina Electric & Gas Company to settle a lawsuit filed in the state Court of Common Pleas in Hampton County on behalf of themselves and current and former SCE&G electric customers. The settlement addresses these customers’ claims and the Attorney General’s arguments related to the Base Load Review Act (“BLRA”). SCANA and SCE&G deny the allegations made in the lawsuit, but have agreed to resolve this matter.
SCANA and SCE&G have agreed to a Common Benefit Fund comprised of the following amounts, to be distributed to the class members:
1) A credit of up to $2,000,000,000.00 in future electric rate relief will inure to the benefit of the Common Benefit Fund in favor of class members over a period of time established in the proceeding pending before the Public Service Commission of South Carolina (the PSC); and
2) A cash payment of $115,000,000.00, which will include the full value of the SCANA rabbi trust funded in January 2018 that was created in whole or in part for executive change-in-control payments; and
3) Transfer of SCE&G owned real estate or sales proceeds from the sale of real properties, including among others, the Ramsey Grove Plantation; the original Charleston Gas & Light Building at 141 Meeting Street in Charleston; and certain Otarre properties in Cayce.
Distribution of any settlement funds is subject to court approval, as well as a final order
by the PSC approving a merger between SCANA Corporation and Dominion Energy, and a closing of the proposed merger between the parties.
Affected current and former SCE&G customers will receive information regarding their rights under the settlement. Eligible settlement class members will receive compensation in the form of a bill credit or a payment of an amount to be distributed by a court-approved class action administrator. Upon the approval of the settlement announced today, the lawsuit will be dismissed by agreement and the claims of SCE&G ratepayers will be resolved.
Former United States Attorney, and lead counsel for the certified class, J. Preston Strom, Jr., had the following to say about the terms of this settlement: “In reaching this agreement, we have been able to secure more than $ 2 billion in relief and accountability for the people of South Carolina. We thank the Attorney General’s office for their hard work throughout this case and particularly in securing the return of funds set aside for executive bonus payments to the ratepayers.”
Attorney General Alan Wilson issued the following statement: “The settlement reached today is the result of countless hours of work by our office seeking to make SCE&G customers whole for the abandonment of the failed V.C. Summer nuclear project. I am proud of the hard work of my entire team in bringing about this result, starting with the aggressive posture of Solicitor General Bob Cook regarding constitutional issues related to the Base Load Review Act, and continuing through tough settlement negotiations to bring resolution to civil matters related to these issues.”
“At all times, our goal has been to look out for the ratepayer and see that justice is done. We believe that this settlement, which encompasses over $2 billion in benefits, is the largest of its kind in the history of South Carolina. The settlement resolves the injury that SCE&G customers suffered under the Base Load Review Act by refunding revised rates previously collected. We also required that the entirety of the SCANA rabbi trust, which had a number of financial benefits for senior managers of SCE&G, be made available for the payment of obligations of the company.”
“This milestone ends our pursuit for restitution to ratepayers, but does not end our inquiry into the individual actors that may have contributed to the project’s failure. We want to acknowledge the hard work of the private lawyers who zealously fought for the interests of ratepayers as well through various lawsuits filed on the behalf of SCE&G ratepayers.”
“Additionally, we want to thank Dominion Energy for its willingness to provide the financial resources necessary to make this restitution. It is important to note that Dominion Energy was not involved in the creation of this situation, and we appreciate its role in finding a resolution that serves the best interests of SCE&G ratepayers.”
Jim Stuckey, SCANA’s Senior Vice President and General Counsel, issued the following statement: “We are pleased that we were able to achieve a mutually
acceptable resolution of this matter so that we can keep our focus on moving forward with the merger with Dominion Energy.”
The State of South Carolina was represented in this matter by Attorney General Alan Wilson. Class Counsel are J. Preston Strom, Jr.; John R. Alphin, Jessica L. Fickling, Mario A. Pacella; and Bakari T. Sellers, of Strom Law Firm, LLC; Terry Richardson, Edward Westbrook, and Daniel S. Haltiwanger, of Richardson, Patrick, Westbrook & Brickman, LLC in Barnwell; Dan Speights and A.G. Solomons, III of Speights and Solomons in Hampton; J. Edward Bell of the Bell Legal Group, LLC in Georgetown; James L. Ward, Jr., and Whitney B. Harrison of McGowan, Hood & Felder, LLC; Vincent Sheheen of Savage, Royall, & Sheheen, L.LP.; and Gregory Galvin of the Galvin Law Group. SCE&G and SCANA are represented by David Balser and Jon Chally of King & Spalding LLP in Atlanta, GA; Leah B. Moody of the Moody Law Firm in Rock Hill, SC; and Jamie Becker and Bob Knowlton of Haynsworth Sinkler Boyd in Columbia, SC.
Profile: SCANA Corporation, headquartered in Cayce, SC, is an energy-based holding company principally engaged, through subsidiaries, in electric and natural gas utility operations and other energy-related businesses.