Former SCANA COO pleads guilty to federal charges

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Editor's note: This story has been updated to clarify the role of ratepayer relief provided by Dominion Energy in the plea agreement. 

The former chief operating officer of SCANA Corp. pleaded guilty today in federal court to conspiracy to commit mail and wire fraud.

The charges against Stephen Byrne, 60, were the first to be filed after a three-year investigation into the abandoned $9 billion V.C. Summer nuclear project by the U.S. Attorney’s Office, the FBI, the U.S. Securities and Exchange Commission and the S.C. Law Enforcement Division.

The plea agreement also specifies that any ratepayer restitution will be offset by $4 billion which Dominion Energy, which acquired SCANA in a December 2018 merger, agreed to provide in December 2018 court proceedings, according to a news release from U.S. Attorney Peter McCoy Jr.’s office.  

“This office will always protect the people of South Carolina and hold accountable those who seek to use positions of trust and responsibility to bilk taxpayers,” McCoy said in the release. “As noted in the record, the defendant conspired with others to lie about the progress of the V.C. Summer Nuclear Station so SCANA could wrongly increase rates on hard-working South Carolinians and qualify for up to $1.4 billion in tax credits. We will not allow this conduct to go unpunished.”

Byrne faces a maximum penalty of five years in federal prison. U.S. District Judge Mary Geiger Lewis accepted the guilty plea and will impose sentence after reviewing a sentencing report prepared by the U.S. Probation Office.

Federal prosecutors have said the investigation is ongoing.

The construction of twin nuclear reactors at the V.C. Summer Nuclear Power Station in Fairfield County was abandoned in July 2017 after years of mounting costs and construction delays, which resulted in billions of dollars in rate increases for ratepayers of SCANA subsidiary S.C. Electric & Gas and state-owned utility Santee Cooper.

SCANA asked for and received approval for nine rate increases from state regulators during the reactors’ construction. Federal officials are investigating whether those increases were granted based on deceptive information from SCANA executives who are alleged to have hidden damaging information about the project’s problems.

“This conspiracy to defraud SCANA customers is breathtaking in scope and audacity,” FBI Special Agent in Charge Jody Norris said. “The FBI remains committed to ensure all those responsible for this crime, which only served to enrich a few by robbing families and communities within South Carolina, are held accountable.”

Virginia-based Dominion Energy acquired SCANA in a $14.6 billion deal in December 2018. SCE&G settled a ratepayer lawsuit in December 2018 for $2 billion. A preliminary $520 million settlement for Santee Cooper ratepayers was approved in March.

According to McCoy’s office, Byrne and other SCANA executives were aware in late 2015 of problems that would keep the V.C. Summer project from meeting a deadline to qualify for a federal nuclear production tax credit.  

“At that time, he joined a conspiracy with other senior SCANA executives to defraud customers of money and property through material false and misleading statements and omissions,” the release said. “In furtherance of the conspiracy, Byrne and his coconspirators made false and misleading statements to the South Carolina Public Service Commission (PSC), the Office of Regulatory Staff (ORS), and the public. Byrne and his coconspirators used both wires and mails in furtherance of their scheme to defraud.”

McCoy’s office said that Byrne submitted written testimony on July 1, 2016, to the PSC representing that SCE&G construction experts had reviewed the project schedule and determined it to be “logical and appropriate,” with SCE&G deeming the project schedule “reasonable.”

“In truth, at the time of this statement, Byrne believed that the schedule was unreliable and unlikely to be achieved,” according to the release.