Updated at 3:34 p.m. on Nov. 1 with SCANA motion to dismiss rate relief request: SCANA CEO Kevin Marsh will retire, the Cayce-based parent company of S.C. Electric and Gas announced today. Marsh’s resignation will be effective Jan. 1.
Marsh had come under increasing scrutiny in the fallout from the failed V.C. Summer nuclear project. House Speaker Jay Lucas called for his resignation Monday.
“It has been an honor to serve as chairman and Chief Executive Officer of SCANA for the past six years, and to have worked for the company since 1984,” Marsh said in a statement released by SCANA this morning. “The ranks of SCANA and its subsidiaries are filled with dedicated employees, and they will be in good hands.”
Stephen Byrne, SCANA senior vice president and SCE&G COO, will also retire. Jimmy Addison, SCANA senior vice president and CFO, will become CEO, while senior vice president and president of retail operations Keller Kissam will become president and COO of SCE&G.
“I understand that we have some difficult issues to address, but I am also excited by the opportunity to return our focus to our core business to provide safe, reliable energy for our customers and economic development opportunities for the areas our subsidiaries serve,” Addison said.
Ongoing legislative probes continue into the project, which was abandoned by SCANA and co-owner Santee Cooper after contractor Westinghouse declared bankruptcy in April. The utilities sank $9 million into its construction, and ratepayers are still footing the bill.
“It pains me that SCE&G and its customers have had to go through this tumultuous time relating to the abandonment of the new nuclear project,” Kissam said. “It is essential for our customers and our employees that we reach a prompt, reasonable resolution of those issues.”
Also Tuesday, SCANA filed a motion with the Public Service Commission to dismiss a request for rate relief filed by the Office of Regulatory Staff. That request "seeks relief which is illegal and unconstitutional and outside the statutory powers" of the PSC, SCANA said in a brief in support of the motion to dimiss.
The brief continued: "Moreover, any action by the Commission to grant — even provisionally — the relief contained in ORS's Request will injure SCE&G financially and damage its ability to access the capital needed to maintain its system and provide service to its customers on reasonable terms."
The brief also noted that the PSC authorized nine rate increases "after determining that they were statutorily authorized and necessary to cover SCE&G's prudent investment" in the V.C. summer project.
On Monday, the House Utility Ratepayer Protection Committee took up the topic of rate relief. SCANA customers currently see 18% of their monthly bills go toward the financing and construction of the two abandoned 1,117-megawatt reactors.
“Why should anyone have to pay 18% for a project that won’t be completed?” Rep. Peter McCoy, R-Charleston, said.
The committee voted unanimously to start work on legislation that would force the debt from the project be paid for by the utilities involved and the implementation of an interim rate to be used for the duration of the legislation.
McCoy said the interim rate is essential to protect ratepayers. The interim rate would be how much each customer is paying for electricity minus the 18%, or roughly $27 a month, going toward to the nuclear project.
Rep. Russell Ott, D-Calhoun, assigned blame to the Base Load Review Act, the law that allowed utilities to raise rates for the project before it was completed. Russell said immediate action should be taken to prohibit companies from using that law’s current language in the future.
“Somebody had the foresight that if things go wrong businesses can still collect on abandonment,” Ott said. “There will be further consequences to our actions, but right now I see we only have two options: Let companies continue to charge for failed projects, or don’t. We have to accept those consequences as they come.”
Steve Davidson, assistant chief counsel for the House Labor, Commerce and Industry committee, offered advice to the legislators. Rather than repealing the BLRA, he said, it could be more efficient to amend the current language to clarify legislative intent.
“An attempt to repeal may fail or be found unconstitutional by the state Supreme Court,” Davidson said. “In changing words and definitions, you are not changing the rights.”
Speculation swirled for several days about Marsh’s future. The State newspaper reported that Marsh’s ouster had been arranged as part of a deal to appease lawmakers, but SCANA denied that report.
Lucas voiced his opinion in a statement, saying: “SCANA’s mismanagement of the V.C. Summer nuclear facility has proven that the company cannot be trusted to promote or protect its consumers’ interests. On behalf of the South Carolina ratepayer, I believe SCANA CEO Kevin Marsh should resign immediately. This measure should have occurred long before now and without pressure from elected officials.”
Lucas responded to Tuesday's resignations in another statement, saying, "I am extremely encouraged by SCANA's decision to finally change course and bring about new leadership. This necessary step should have occurred months ago and never at the behest of outside pressure. "
S.C. Gov. Henry McMaster said Marsh's resignation represented a step in the right direction.
"While this decision indicates that SCANA is beginning to fully understand the devastating consequences of abandoning the V.C. Summer project, any effort to regain the public's trust starts with no longer charging ratepayers for this failed project and refunding them the money they've already paid for it," McMaster said.
The stock market reacted with more movement than to SCANA's third quarter earnings report released last week, which showed a sharp dip in earnings from the second quarter and an impairment loss of $210 million. While the price per share of SCANA stock went up slightly last Thursday, when the report was released, it dropped on Tuesday, falling to $43.09 late in the afternoon after opening the day at $45.93.