Columbia, South Carolina --- United States Attorney Peter M. McCoy, Jr. announced today that Stephen A. Byrne, 60, former Executive Vice President of SCANA, pleaded guilty in federal court to conspiracy to commit mail and wire fraud.
Today’s plea is the result of an exhaustive and multi-year joint investigation by the U.S. Attorney’s Office, the Federal Bureau of Investigation (FBI), the U.S. Securities and Exchange Commission (SEC), the South Carolina Attorney General’s Office, and the South Carolina Law Enforcement Division (SLED). The plea agreement requires that Byrne cooperate with law enforcement officials and includes an agreement with Dominion Energy that will, over time, provide at least four billion dollars of South Carolina ratepayer relief.
“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,” said U.S. Attorney McCoy. “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. I also want to thank our federal and state partners for their invaluable contribution to this investigation.”
“This conspiracy to defraud SCANA customers is breathtaking in scope and audacity,” said FBI Special Agent in Charge Jody Norris. “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. I thank SLED for its assistance in this complex and extensive investigation.”
“I appreciate the efforts of this joint federal and state investigation,” said South Carolina Attorney General Alan Wilson. “We’ve long argued that the law allowing SCANA to charge customers billions of dollars for a nuclear plant that wasn’t even operating was unconstitutional. Now, a former SCANA executive is being held criminally accountable for his part in the project.”
Evidence presented to the court showed that this case arises out of the failed nuclear project at the V.C. Summer Nuclear Station in Jenkinsville, South Carolina. In 2008, SCANA Corporation and its subsidiary South Carolina Electric & Gas Company (SCE&G) announced their intention to build two new nuclear units with their minority partner, the South Carolina Public Service Authority, a state-owned public power and water utility commonly known as Santee Cooper.
Byrne, who served as SCANA’s Executive Vice President and SCE&G’s President of Generation and Transmission and Chief Operating Officer, oversaw all nuclear operations for SCANA, including the construction of the two new nuclear units.
From its inception, substantial delays and cost overruns plagued the project. In late 2015 and early 2016, Byrne and others in SCANA’s executive leadership were aware that without extraordinary progress, the project was at risk of not completing the construction of both units in time to qualify for the federal nuclear production tax credit, which will expire on December 31, 2020, and was worth up to $1.4 billion. In or around June 2016, Byrne became aware that efforts to improve the pace and productivity of the project were insufficient to meet the nuclear production tax credit deadline.
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. 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.
For example, on July 1, 2016, Byrne submitted written testimony to the PSC representing that “SCE&G’s construction experts have reviewed [the consortium’s] schedule and found that its scope and sequencing is logical and appropriate” and that “SCE&G has carefully reviewed and evaluated all information that is available related to the project and schedule and finds it to be reasonable.” In truth, at the time of this statement, Byrne believed that the schedule was unreliable and unlikely to be achieved.
Further, Byrne testified that SCE&G’s contractors “have a reasonable construction plan in place to achieve the [guaranteed substantial completion dates]” such that “the construction schedule . . . is a reasonable and prudent schedule for completing the units.” In truth, Byrne believed that those dates – and therefore the production tax credit deadline that closely followed – were unlikely to be achieved.
Contrary to his and others’ public statements, Byrne was aware in June 2016 that the project construction schedule and completion dates were unrealistic and unlikely to be achieved, and both units of the project were unlikely to be completed in time to qualify for up to $1.4 billion in federal nuclear production tax credits. His false and misleading statements, among others made by his coconspirators, allowed SCANA to obtain rate increases imposed on SCANA’s rate-paying customers and used to finance the project.
Byrne faces a maximum penalty of five years in federal prison. United States District Judge Mary Geiger Lewis accepted the guilty plea and will sentence him after receiving and reviewing a sentencing report prepared by the United States Probation Office. Assistant United States Attorneys Jim May, Brook Andrews, Winston Holliday, and Emily Limehouse are prosecuting the case.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
Derek A. Shoemake (843) 813-0982