A law that dumped billions of dollars in taxpayer money down the drain to fund ill-fated nuclear reactors looks to be unconstitutional, South Carolina’s attorney general said Tuesday in a blistering legal opinion that comes as federal and state authorities probe an unprecedented energy debacle that’s become known as “NukeGate.”
South Carolina Attorney General Alan Wilson’s 50-page report, requested by state lawmakers, concluded that the 2007 Base Load Review Act contained serious flaws, noting that the state constitution requires that power plants be “used and useful” to the public before ratepayers can bear any of the costs.
The law, signed by then-Gov. Mark Sanford, a Republican, tweaked state regulations to allow preemptive utility rate hikes to fund construction of two nuclear reactors at the V.C. Summer facility in Fairfield County.
The massive undertaking was once touted as a groundbreaking project that could serve as a blueprint for other nuclear facilities across the country. It will not be completed despite reportedly getting more than $2 billion from taxpayers.
Mr. Wilson’s opinion lays the groundwork for state lawmakers to try to recoup some of that money from investors and stakeholders, though it’s unclear how such a scenario would play out or if courts will agree with the attorney general’s conclusions.
For now, Mr. Wilson’s study serves as a damning indictment of what increasingly looks to be a process that was deeply flawed from the start.
“The act shifts the burden of costs from the utility and its investors to ratepayers without the plants ever being completed,” the attorney general wrote. “Several other provisions likely contravene due process. The act, through its lenient provisions in favor of the utility, encourages the utility to spend unwisely.”
“Consumers receive nothing in return but an unfinished plant,” he wrote, “it requires them to pay in full for a plant not nearly finished and providing no service to consumers.”
The firms building the project, SCANA Corp. and the state-owned utility Santee Cooper, did not respond to requests for comment Tuesday.
The project had been one of only two new nuclear proposals in the entire country. It initially had been slated to open last year at a cost of about $9.8 billion.
With that money, including the $2 billion in taxpayer dollars, now gone, anger across the state has reached a boiling point.
Utility customers on Tuesday crowded into a public hearing on the matter and ripped the project’s organizers, saying they’d been lied to and forced to pay for a project that looks to be dead. Much of the vitriol was directed at SCE&G, a subsidiary of SCANA.
“SCE&G should refund all money paid up until they shut it down,” said Wendell Bedenbaugh, a customer forced to pay for the project through utility rate hikes, as quotes by The State newspaper. “We need to make people responsible for their actions.”
Meanwhile, ratepayers reportedly have filed a class-action lawsuit against SCANA, seeking the return of all money wasted. State authorities have launched their own formal inquiries, and last week SCANA confirmed that it is now the target of a federal investigation.
The company announced that it and its subsidiaries had been served with a subpoena from the U.S. Attorney’s Office seeking documents related to the company’s handling of the proposed reactors at Summer.
“The subpoena requires the company to produce a broad range of documents related to the project. The company intends to cooperate with the government’s investigation,” SCANA said in a statement.
Some project supporters have urged the federal Energy Department to step in and provide funds to complete the work.
Despite President Trump’s and Energy Secretary Rick Perry’s strong support of nuclear power, such a scenario seems unlikely, especially in light of the federal probe, lawsuits and Mr. Wilson’s conclusion that the entire ordeal was based on an unconstitutional law.
The debacle has drawn the ire of the state’s most prominent politician, Sen. Lindsey Graham.
“I’m mad as hell that you spend all this money and you can’t get it done,” the South Carolina Republican said over the summer.
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