First, some key points:
• Abandonment of the Fairfield County nuclear power project in which Scana Corp. and state-owned Santee Cooper were partners in building two reactors is an economic disaster. But the bigger picture is the crisis for nuclear power. The federal government needs to step in with guidance and support to revive the industry, which is important for the nation’s energy future.
• Santee Cooper, one of the nation's largest public utilities, is the source of electricity for about 2 million people across South Carolina. It directly sells power to nearly 177,000 customers as well as 26 large industrial customers. It also provides electricity to the state's 20 electric cooperatives and a dozen municipal utilities. It should not be put up for sale.
• S.C. General Assembly passage of the Base Load Review Act in 2007 was shortsighted. It allowed Scana to begin building the nuclear facilities and bill the rate payers in advance, plus it guaranteed Scana a 10.25 percent profit – even if the project failed.
• The utilities have little choice but to pull back from plans to charge customers now and in the future for a project upon which $10 billion was spent. Customers have already paid more than $2 billion through a series of rate hikes since 2009.
• State lawmakers have reason to look deeply into what happened with the project and why – moving beyond the utilities blaming the contractor.
• In the end, however, the future of Scana and Santee Cooper is vital to the future of South Carolina. The utilities must not be permanently harmed.
Yet there are stories within the nuclear story that make South Carolinians angry. One is the eye-popping sums of money doled out to executives at the two utilities while ratepayers are being asked to pay for failure.
The two companies were warned about serious problems plaguing the nuclear project, an independent analysis by Bechtel Corp. shows. Santee Cooper and SCE&G (whose parent company is Scana) were advised to hire someone to enforce contractor accountability.
In the report dated February 2016, Bechtel wrote the project suffers from "major project management issues that must be resolved for project success.”
But there was no resolution – even as executives with Scana were reaping rewards for their roles in the project.
Filings with the U.S. Securities and Exchange Commission show Scana paid executives more than $21 million in performance bonuses over the past decade, including money for work on the nuclear project. The filings do not say exactly how much of the $21 million was based on the failed project.
Last year, Scana's top five executives received $3.3 million in performance-based pay, according to the federal filings examined by The State newspaper of Columbia.
Nearly half of last year's performance pay went to Scana chief executive Kevin Marsh and represents about a quarter of his $6 million in total compensation.
The filings said Marsh's $1.4 million performance-based bonus for 2016 was paid, in part, because of his "oversight and support of our nuclear construction activities."
Meanwhile, Santee Cooper President Lonnie Carter became the first utility executive to depart after the nuclear project was abandoned. He won’t suffer in retirement for doing so, with his severance package being more lucrative than the $540,929 paid to him annually as a state employee.
The Bamberg County native will get $1 million in the first year of retirement, $800,000 annually for the next two decades and then $345,000 yearly for the rest of his life. He is 58.
No matter how the world of big finance works, don’t ask a South Carolinian to understand this.
Consider the recent letter to the editor in The Times and Democrat regarding a bonus schedule for Clemson Coach Dabo Swinney if he wins various games and awards. The writer contended the coach’s salary is plenty for him and no bonuses are needed as added incentive to win.
But at least Swinney’s bonuses are to be paid for successes. In the world of the S.C. nuclear project and the two utilities, it appears those at the top are being paid in excess – even when the end result is failure.