Scana Corp. and South Carolina Electric & Gas Co. reached a tentative deal with plaintiffs to settle a lawsuit related to the cost of the failed expansion project at the V.C. Summer nuclear station in South Carolina. The settlement is intended to address customer claims and the state attorney general’s arguments related to the state's Base Load Review Act.

Work on VC Summer Unit 3 ended in July 2017. Credit: NRC.govScana and SCE&G agreed to pay up to $2 billion to settle claims raised in the lawsuit. In addition, it agreed to a cash payment of $115 million, which had been set aside for executive payouts. It also agreed to sell a number of real estate assets to help pay for the settlement. The utility, however, said that it continued to dispute claims raised in the lawsuit.

The utility said that distribution of any settlement funds is subject to court approval, as well as a final order by South Carolina utility regulators approving a pending merger between Scana and Dominion Energy.

Once the settlement is approved, lawyers for the plaintiffs said that they will drop their lawsuit. News reports said that customers still will need to pay another $2.3 billion for two unfinished reactors over the next two decades.

The settlement is intended to resolve the damages that SCE&G customers suffered under the Base Load Review Act by refunding money previously collected for the two-unit nuclear power plant. The state's Office of Regulatory Staff reportedly rejected the proposed settlement. It wants a larger payout to customers. The office is unable to block the deal on its own, but could influence regulators who will decide whether to approve the settlement.

In January, Dominion and Scana Corp. announced plans to combine in a stock-for-stock merger worth about $7.9 billion. Including debt assumption, the value of the transaction was around $14.6 billion.

SCE&G filed a formal request last Dec. 28 with the Nuclear Regulatory Commission (NRC) to withdraw the combined operating licenses (COLs) for V.C. Summer Station Units 2 and 3. The move follows a July 31, 2017, notification that the company was stopping construction on the nuclear project.

SCE&G said at the time that it reached the decision after considering the additional costs to complete the units, the uncertainty regarding the availability of production tax credits for the project, the amount of anticipated guaranty settlement payments from Toshiba Corp., as well as a decision by one of its partners to suspend construction of the project.