Former South Carolina Electric & Gas Company Executive Pleads Guilty To Conspiracy To Commit Mail And Wire Fraud
This week, it was announced that the former Executive Vice President of SCANA, 60-year-old Stephen A. Byrne, had pleaded guilty to conspiracy to commit mail and wire fraud. The plea comes after a multi-year joint investigation by the United States Attorney’s Office, the FBI, the SEC, the South Carolina Attorney General’s Office, and the South Carolina Law Enforcement Division.
Byrne will be required to cooperate with law enforcement officials. Furthermore, the plea agreement includes an agreement with Dominion Energy to provide at least four billion dollars of South Carolina ratepayer relief over time. Evidence showed that the case arose from the failed nuclear project at the V.C. Summer Nuclear Station in Jenkinsville, South Carolina.
In 2008, SCANA and its subsidiary South Carolina Electric & Gas Company announced their intention to build two new nuclear units with minority partner, the South Carolina Public Service Authority. Byrne served as SCANA’s Executive Vice President and SCE&G’s President of Generation and Transmission and Chief Operating Officer.
He oversaw all nuclear operations for SCANA as well as the construction of the two new units. Since its start, the project was plagued by substantial delays and cost overruns. In late 2015 and early 2016, Byrne and other leadership members knew that the project was at risk of not completing the construction of both units in time to qualify for a federal nuclear production tax credit. That credit will expire on December 31, 2020 and was up to $1.4 billion.
Around June of 2016, Byrne became aware that efforts to speed up the pace and productivity of the project were insufficient. He joined a conspiracy with other senior SCANA executives to defraud customers of money and property through material false and misleading statements and omissions. Byrne and his coconspirators made false and misleading statements to the South Carolina Public Service Commission, Office of Regulatory Staff, and the public.
Furthermore, they used wires and mails to carry out the scheme. Byrne testified that SCE&G’s contractor “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 reality, Byrne realized that the production tax credit deadline was unlikely to be achieved. Despite his public statement, Byrne was aware in June of 2016 that the project construction schedule and completion dates were unrealistic. Byrne now faces a maximum penalty of five years in prison.
Further details can be found here.