V.C. Summer Nuclear Project Abandoned After $9 Billion Failure - Ratepayers Forced to Pay $2.3 Billion for Never-Built Reactors

On July 31, 2017, SCANA Corporation and South Carolina’s state-owned utility Santee Cooper abandoned the V.C. Summer nuclear expansion project after a decade of construction, $9 billion in expenditures, and massive cost overruns. Despite the complete failure to deliver any functioning nuclear reactors, South Carolina ratepayers were legally required to continue paying billions of dollars for the abandoned project due to the state’s 2007 Base Load Review Act, which allowed utilities to charge customers for construction costs before projects were completed and guaranteed full cost recovery even if plants were never built.

The project had sought to add two Westinghouse AP1000 reactors (Units 2 and 3) to the existing V.C. Summer Nuclear Generating Station in Fairfield County. Initial 2008 cost estimates projected $9.8 billion, but by 2017 costs had ballooned to a projected $25 billion. When Westinghouse Electric Company filed for Chapter 11 bankruptcy in March 2017 after sustaining $9 billion in losses from its nuclear construction projects, SCANA was forced to reassess the viability of continuing construction.

The abandonment decision came after years of fraud and deception by SCANA executives. Federal investigations later revealed that SCANA CEO Kevin Marsh and Executive Vice President Stephen Byrne knew the project would not be completed in time to qualify for federal tax credits and systematically hid this information from regulators, shareholders, and ratepayers. Between 2015 and 2017, the SEC documented more than 35 individual instances of lies and cover-ups by these executives.

This systematic fraud allowed SCANA to artificially bolster its stock price, sell $1 billion in financing bonds at favorable rates, and obtain regulatory approval to charge customers more than $1 billion to continue funding a project executives knew was failing. Both Marsh and Byrne later pleaded guilty to federal felony charges, with Marsh sentenced to two years in prison in October 2021 and Byrne receiving fifteen months in March 2023.

The most egregious aspect of the scandal was the mandatory customer billing enabled by South Carolina’s regulatory framework. The 2007 Base Load Review Act had allowed SCE&G (SCANA’s retail utility) to bill customers for nuclear plant construction costs as they built it rather than after completion, and crucially, guaranteed the utility full cost recovery even if the plant was never built. This regulatory structure—passed by a state legislature with close ties to utility interests—transferred all financial risk from shareholders to captive ratepayers.

By the time of abandonment, customers had already paid $2 billion for reactors that would never generate electricity. On August 1, 2017, SCE&G filed an abandonment petition with the South Carolina Public Service Commission requesting approval to charge ratepayers an additional $4.9 billion in costs for the failed project.

In January 2019, Dominion Energy completed its acquisition of SCANA in a deal announced in January 2018 as SCANA reeled from lawsuits filed by ratepayers, shareholders, and citizen groups. The Dominion takeover reduced some of the nuclear-bloated rates but still left approximately 720,000 electric customers legally obligated to pay an additional $2.3 billion over the following two decades for the abandoned project. Santee Cooper’s ratepayers faced an even larger burden of $3.6 billion in debt from the failed expansion.

The V.C. Summer debacle became known as “Nukegate”—a reference to the Watergate scandal—and was widely characterized as the largest business failure in South Carolina history. More than 700,000 South Carolina utility customers continue to see charges related to the project on their monthly electric bills, though the fee is not explicitly itemized, obscuring the ongoing cost extraction from consumers.

The scandal exposed how regulatory capture at the state level can systematically transfer financial risk from corporate shareholders to captive consumers. The 2007 Base Load Review Act was itself a product of utility industry lobbying, creating a legal framework that guaranteed profits regardless of project success. When combined with executive fraud and the structural inability of ratepayers to exit the market (unlike shareholders who can sell stock), the result was a nearly perfect mechanism for extracting billions from working-class South Carolinians to cover corporate losses.

Federal prosecutors characterized the conspiracy as causing South Carolina ratepayers to pay more than $2 billion for a project that was never going to be completed. The fourth and final executive sentenced in May 2023 brought closure to criminal accountability, but ratepayers will continue paying for the failed project until at least the late 2030s, representing a multi-generational transfer of wealth from consumers to utility investors and creditors.