The Santee Cooper Board of Directors said Monday it has approved a $2 million settlement agreement in a lawsuit over mini-bonds the South Carolina-owned utility issued for a failed nuclear power project.
"The settlement, for $2 million plus up to $35,000 for costs of class administration, provides a release from the plaintiffs related to mini-bonds that Santee Cooper issued from 2014 to 2016," the board said. "The agreement ... authorizes management to execute the settlement agreement, which will then be submitted to the U.S. District Court to consider approval.”
The electric utility said in
The litigation over disclosure for the mini-bonds was spurred by the utility's
The utility, formally the South Carolina Public Service Authority, owned 45% of the failed project. It issued about $4.2 billion of bonds to finance the construction of the reactors. As of Dec. 31, 2019, about $3.6 billion of bonds issued for the project were outstanding, according to Santee Cooper.
In April 2019, lead plaintiff Turka filed a federal complaint against Santee Cooper and Lonnie Carter, the authority’s former chief executive officer alleging violations of federal securities law anti-fraud provisions for failing to disclose pertinent information to investors about the project when the mini-bonds were sold. The investment-grade utility hasn't missed a payment on its debt.
This wasn’t the only lawsuit the utility had been involved with regarding the failed project.
Last July, a South Carolina judge approved a settlement in a ratepayer class-action lawsuit against Santee Cooper and the investor-owned South Carolina Electric & Gas. Under the settlement Dominion Energy, which now owns SCE&G, agreed to pay $320 million while Santee Cooper agreed to pay $200 million over three years and freeze its rates for four years.
The state Legislature postponed a vote last year on whether to sell off the utility, but has established oversight provisions and preventing it from entering into employment contracts longer than six months.
