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Former Westinghouse Electric Co. Senior Vice President Jeffrey A. Benjamin was charged with 16 felony counts, including conspiracy, wire fraud, securities fraud, and causing a publicly traded company to keep a false record, for his part in failing to truthfully report information regarding construction of new nuclear units at the V.C. Summer nuclear plant in South Carolina.
Benjamin is the fourth individual to be charged in the ongoing federal investigation. Former SCANA CEO Kevin Marsh, former SCANA Executive Vice President Stephen Byrne, and former Westinghouse Vice President Carl Churchman have all pleaded guilty to federal felony charges for their roles in the matter. However, in a statement, Acting U.S. Attorney for the District of South Carolina M. Rhett DeHart noted that all charges against Benjamin are merely accusations, and that the defendant is presumed innocent until and unless proven guilty.
The V.C. Summer Debacle
The effort to expand the V.C. Summer nuclear station began in 2008 when South Carolina Electric & Gas (SCE&G, a SCANA Corp. subsidiary) and Santee Cooper (South Carolina’s state-owned electric and water utility, the state’s largest power provider, and one of the nation’s largest public power utilities) filed an application to build two new Westinghouse AP1000 reactors at the site in Fairfield County, South Carolina. The reactors—Units 2 and 3—were originally planned to be brought online in 2016 and 2019, respectively, with SCE&G owning 55% of the V.C. Summer expansion and Santee Cooper owning the remaining 45%. The estimated cost was $ 10.5 billion.
The project quickly fell behind schedule and costs ballooned. Westinghouse, which was also supplying two AP1000 units for the Vogtle nuclear expansion in Georgia, which was also troubled by schedule delays and cost overruns, was crippled financially as a result of the two projects. In March 2017, Westinghouse filed for Chapter 11 bankruptcy.
With more than $ 10.4 billion in construction and interest reportedly spent by the owners on the V.C. Summer project, and analysis indicating that the project would not be finished until 2024 at a total of more than $ 25 billion, SCANA and Santee Cooper decided to abandon the project on July 31, 2017. It was reportedly more than 64% complete at the time.
SCANA Corp., which was reeling following the abandonment decision with several lawsuits filed by a variety of plaintiffs, including ratepayers, shareholders, and citizen groups, was acquired by Dominion Energy in a deal announced on January 3, 2018. The merger was completed a year later, with SCANA shares converted into 0.6690 shares of newly issued Dominion Energy common stock. The conversion resulted in a transaction value of approximately $ 6.8 billion, in addition to the assumption of approximately $ 6.6 billion in existing consolidated SCANA net debt.
Benjamin Allegedly Concealed Trouble
Benjamin, who served as senior vice president for New Plants and Major Projects, and directly supervised all new nuclear projects worldwide for Westinghouse during the V.C. Summer project, was charged in a federal indictment on Aug. 18. The indictment alleges that Benjamin was personally involved in communications between Westinghouse and the plant owners, SCANA and Santee Cooper, regarding the status of the V.C. Summer project.
The indictment further alleges that, throughout 2016 and into 2017, when Westinghouse had direct control over the construction and schedule of the project, Benjamin received information that the V.C. Summer units were materially behind schedule and over budget. Nevertheless, at various times from September 2016 through March 2017, the indictment alleges that Benjamin assured the owners that the units would be completed on schedule and took active steps to conceal from the owners damaging information about the project schedule. During this time period, the owners paid Westinghouse more than $ 600 million in construction costs.
“This indictment with its attendant allegations and charges is another step toward justice for all those responsible for the V.C. Summer nuclear plant fiasco,” FBI Special Agent in Charge Susan Ferensic, said in a statement. “The FBI has devoted substantial resources to investigating this matter and will continue to work with the United States Attorney’s Office, the South Carolina State Law Enforcement Division, and the South Carolina Attorney General’s Office to find facts and prove criminal conduct.”
The charges Benjamin faces carry a maximum of 20 years imprisonment and a $ 5,000,000 fine.
—Aaron Larson is POWER’s executive editor (@AaronL_Power, @POWERmagazine).
The post Former Westinghouse Executive Charged with Conspiracy, Fraud in Connection with V.C. Summer Nuclear Project appeared first on POWER Magazine.