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Ex-Scana Executive Pleads Guilty to Nuclear Project Fraud (2)

July 23, 2020, 6:56 PM

Former Scana Corp. executive Stephen Byrne pleaded guilty to fraud charges in connection with a $10 billion nuclear power project that the South Carolina gas and electric utility abandoned amid soaring costs and construction delays.

Byrne, who served as executive vice president at Scana, entered his plea Thursday in federal court in South Carolina after reaching a deal with prosecutors last month. He could face as long as five years in prison.

According to a statement by prosecutors, the deal requires that Byrne cooperate with the government. Dominion Energy, which acquired Scana in 2018, has agreed to provide at least $4 billion in rate relief to South Carolina customers over an unspecified length of time, the U.S. said.

Lawyers for Byrne declined to comment.

“Dominion Energy continues to cooperate fully with state and federal authorities in this ongoing investigation, pursuant to the terms of the cooperation agreement,” the company said in a statement. “We have no further comment regarding this matter or the investigation.”

In a related case, the U.S. Securities and Exchange Commission filed a lawsuit in February alleging Byrne and former Scana Chief Executive Officer Kevin Marsh “repeatedly deceived investors, regulators and the public over several years” about the status of the $10 billion V.C. Summer nuclear power plant. The agency said the project, which Scana dropped in 2017, resulted in “hundreds of millions of dollars” of waste.

According to the SEC, Byrne and Marsh knew the project was unworkable but publicly touted it in securities filings and earnings calls, enabling the company to increase its stock price, sell $1 billion in corporate bonds and receive regulatory permission to charge its customers more than $1 billion in increased rates to help finance the project.

Marsh’s lawyers didn’t immediately respond to requests for comment.

Scana originally planned to construct two new nuclear units in cooperation with Santee Cooper, another South Carolina utility. After raising customer rates for years, the company backed out of the project, but continued charging the increased rates to pay off its debt, class action lawsuits against the company allege.

(Updates with Marsh request for comment)

To contact the reporter on this story:
Clare Roth in Kansas City at croth55@bloomberg.net

To contact the editors responsible for this story:
David Glovin at dglovin@bloomberg.net

Anthony Lin

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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