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Former SCANA CEO Kevin Marsh pleads guilty to State Grand Jury Indictment related to V.C. Summer Nuclear Power Plant Project

(COLUMBIA, S.C.) – Feb. 24, 2021 – South Carolina Attorney General Alan Wilson announced that former SCANA CEO Kevin Bryan Marsh waived presentment and pled guilty today to a State Grand Jury indictment for violation of South Carolina Code Ann. Section 16-13-240(1) (Obtaining Signature or Goods by False Pretense over $10,000).  This crime is a felony and is punishable by up to ten years in prison.

The Honorable J. Mark Hayes, II accepted the plea this afternoon after presentations from both sides.  This case is part of a very complex and involved joint federal and state investigation which also resulted today in Marsh’s plea to a related charge in federal court.  Pursuant to the terms of the plea agreement, Judge Hayes deferred sentencing of Mr. Marsh until his cooperation with the investigation is complete.  The plea agreement has as a negotiated term that if Marsh fully complies with the plea agreement and his cooperation obligations, his sentence will be 10 years in prison, provided that upon the service of 24 months incarceration, the balance will be suspended upon the service of three years’ probation.  The federal and state sentences will be served concurrently.

Marsh will also pay pursuant to this state proceeding $5,000,000 to represent the compensation he should not have received but for his criminal conduct.  This money will be earmarked for an existing program that helps qualifying low income ratepayers with their utility bills.  This program is administered through the South Carolina Office of Economic Opportunity.

“This case is a good example of the power of our State Grand Jury and how our office uses it to hold the powerful accountable,” Attorney General Wilson said. “While this criminal proceeding is not meant to repay the customers who spent billions of dollars on nuclear plants that were never finished, we hope they take some comfort from the fact that the former CEO of SCANA has pled guilty for his role in this debacle.  A public utility and its officers must serve the public,” Wilson added.

Kevin B. Marsh, whose background was as an accountant, was the CEO and Chairman of the Board of SCANA during the company’s project to build two new nuclear reactors at the V.C. Summer site in Fairfield County.  SCANA was a former Fortune 500 holding company, based in Lexington County, South Carolina, that had 11 subsidiaries, to include SCE&G.  The project was to do something that had not been done in the United States since the late 1970s – build a new nuclear power plant, with the idea that this would spark nuclear renaissance and a reduction of dependence on fossil fuels.

The project was driven by passage of the Base Load Review Act (BLRA) in South Carolina, which allowed the utility to finance certain project costs with increased rates before the nuclear plants ever produced any electricity for customers.  The passage of BLRA by the South Carolina General Assembly had changed the preexisting rule that only allowed utilities to bill customers for a power plant once it was producing electricity for their benefit.  The BLRA also allowed SCANA to recoup financing costs during construction and obtain a rate of return, or profit, on some of the money spent to construct the reactors.  The Public Service Commission (PSC) was responsible for approving SCANA’s request for Summer-related rate increases, and 9 such increases took place over the life of the project from 2009 to 2017.  The rate of return allowed under the BLRA increased SCANA’s performance as a company and thus contributed to the performance compensation for executives.

The Owners – SCANA (55%) and Santee Cooper (45%) — did not directly manage the project but instead had an oversight role. The investigation shows that much of the information that was provided to the Owners about the progress and performance of the project was not accurate or correct.  However, no later than December 2016, the information Marsh received had reached a critical mass about the project’s poor performance and inability to meet promised deadlines.  No later than December 2016, disclosure to the regulatory agencies and the public was required, but Marsh did not make these disclosures.  It is for this failure that he is criminally liable.

The Attorney General thanked the District of South Carolina United States Attorney’s Office, the FBI, the State Law Enforcement Division, and of course the State Grand Jury Section for all the hard work in investigating and prosecuting this case.  “Partnerships between state and federal law enforcement on cases like this are important to ensure efficient administration of justice in South Carolina, and I want to thank all the agencies involved for their contributions to this result,” Attorney General Wilson said.

The case was prosecuted by Deputy Attorney General Donald J. Zelenka, State Grand Jury Division Chief Attorney S. Creighton Waters, and Assistant Attorney General David Fernandez.

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