South Carolina utility CEO steps down after nuclear project nixed

(Reuters) - The chief executive officer of South Carolina’s state-owned electric utility announced his resignation on Friday, less than a month after the utility abandoned a nuclear project that was stymied by delays and billions of dollars in cost overruns.

Lonnie Carter will step down from his post as CEO and president of utility Santee Cooper, ending more than 13 years in the position and more than three decades with the utility, Carter and Santee Cooper’s board of directors said at a specially convened meeting.

Carter’s resignation comes amid calls by state politicians for further management shake-up and legislative investigations on what caused the nuclear expansion project known as V.C. Summer to fail after roughly a decade in the making.

The Santee Cooper board of directors voted on July 31 to halt construction on the project, once considered the start of a U.S. nuclear power renaissance. Soon after the decision, 5,000 workers on the site were laid off, leaving behind two unfinished nuclear reactors.

Santee Cooper owns 45 percent of the project, with 55 percent owned by a unit of SCANA Corp.

About $9 billion had been spent on construction when V.C. Summer was canceled. Costs were estimated to soar 75 percent over the initial budget, to as much as $24 billion, before completion.

The South Carolina Senate and House of Representatives earlier this month created special committees to investigate V.C. Summer’s demise.

During questioning at the inaugural session of the senate subcommittee on Tuesday, Carter said inefficiency and secrecy by the project’s former lead contractor was largely to blame.

A plunge in oil prices over the past decade, rollback of federal environmental incentives and a decline in Santee Cooper’s customer base also hurt the project, he said.

Santee Cooper on Friday did not name a replacement for Carter, who said he would “fade away over the next few days.”

Uncertainty over management could hurt Santee Cooper’s bond credit, which has already suffered downgrades in recent months as V.C. Summer’s viability was increasingly called into question, analysts said.

“During this difficult time for Santee Cooper, without an orderly management transition, credit pressure could rise as the utility looks to move past its Summer nuclear project,” said Dan Aschenbach, a senior vice president at Moody’s Investors Service.

Moody’s rates the utility A1, while Fitch Ratings and S&P Global ratings have it at A-plus. All three give it a negative outlook.

Reporting by Laila Kearney; Editing by Bernadette Baum and Dan Grebler