COLOMBIA – Former CEO of SCANA Corp. Kevin Marsh will spend at least two years in prison and return at least $ 5 million for defrauding electricity taxpayers in South Carolina’s $ 9 billion nuclear power fiasco, according to a court settlement presented to a federal judge February, 24.
Marsh, 65, appeared in court for the first time to plead guilty to charges of fraud and formally accept responsibility for his role in the failed decade-long expansion of SCANA’s VC Summer nuclear plant in Fairfield County. Dressed in a gray suit and black mask, Marsh had to hand over his passport to the court, but was released without having to deposit money for bail.
Formerly one of South Carolina’s top entrepreneurs, Marsh has spent the past six months as a criminal informant and will continue to be a key witness to state and federal prosecutors who continue to investigate the failure of the VC Summer project. He faces up to five years in prison if he does not fully cooperate with the investigation, according to the new terms of his court settlement.
Later, on February 24, Marsh will plead guilty in a state court in Spartanburg to a charge of fraud related to the failed nuclear project.
Inside the federal court in Columbia, Marsh listened in silence as the United States assistant attorney, Jim May, filed the federal case against him.
They discussed how the sudden collapse of the project in July 2017, now considered the biggest commercial failure in the state’s history, sent shock waves through South Carolina’s legal, regulatory, political and business communities.
Altogether, SCANA and its minority partner in the ambitious venture, state-owned Santee Cooper, spent $ 9 billion before ending the construction effort, which was to usher in a new era of clean nuclear energy in South Carolina.
The VC Summer expansion would have been the first successful nuclear construction project in the United States since the 1970s. SCANA increased its rates nine times on its 753,000 electricity customers to finance the project.
Now, SCANA and Santee Cooper taxpayers will spend decades paying that debt off their energy bills.
Marsh’s main crime during project management, prosecutors told a judge, was failing to tell regulators and the public about the ongoing supply chain, the design and construction problems that were condemning the expansion effort.
Instead, prosecutors said, Marsh and his colleagues at SCANA presented only optimistic projections and assessments of progress at the VC Summer construction site, even as contractor Westinghouse struggled to assemble the two new nuclear reactors.
Top executives at Marsh and SCANA knew in late 2016 that their project was doomed to lose critical deadlines for getting reactors online, prosecutors said on Wednesday.
At that point, SCANA executives just needed to raise their concerns with the state’s Public Service Commission, which sets utility rates in South Carolina, and start an honest conversation about whether the project should continue.
In fact, a similar debate has taken place about the ongoing expansion of the Vogtle nuclear power plant in Georgia, following the collapse of the VC Summer project. There, regulators decided to continue the construction effort, instead of canceling it.
But Marsh never took these concerns to regulators, and the public was taken aback when the construction project went bankrupt.
Marsh became the second SCANA executive to plead guilty to taxpayer fraud. The company’s former chief operating officer, Steve Byrne, pleaded guilty to a similar deal last July.
Prosecutors now have Marsh and Byrne at their disposal as witnesses as they continue their investigation.
Marsh’s guilty plea comes at the end of Peter McCoy’s run as a South Carolina attorney. The James Island Republican is stepping down on February 28 after President Joe Biden’s government asked almost all US prosecutors to be appointed. Trump to step down by the end of the month.
As a state legislator in 2017, McCoy led the SC House investigation into the VC Summer project’s sudden failure and questioned Marsh and other SCANA officials about his role.
The VC Summer fiasco proved to be an existential threat to SCANA and its partner, Santee Cooper.
Once a Cayce-based Fortune 500 company, SCANA was finally sold to Dominion Energy, based in Virginia. The company was later renamed Dominion Energy South Carolina.
The General Assembly is currently debating whether to sell Santee Cooper to NextEra Energy, based in Florida, as a means of offloading the summer debt from the energy and water utility’s VC.