Horry Electric Cooperative consumers to split $6 million lawsuit settlement

Conway-based Horry Electric Cooperative will spend $6 million to settle claims that a Good Cents program designed to reduce energy costs in new home construction caused moisture and mold growth inside the walls of some area homes, according to court documents.

A settlement agreement in the class-action lawsuit was approved Friday by Judge Benjamin Culbertson. Horry Electric Cooperative did not admit to any wrongdoing in the settlement.

The utility has identified about 1,080 customers whose homes were built between 1998 and 2003 that were enrolled in the Good Cents program. Those homeowners will receive between $2,000 and $12,000 from the settlement pool, depending on the extent of damage. The money will help consumers recover out-of-pocket repair costs and construction expenses, according to a news release.

Consumers who are eligible for the money already have been sent a form that must be returned to Horry Electric Cooperative by June 16 or the payment will be forfeited. Consumers who wish to receive a $2,000 payment must simply return the form with their name, address and signature. Those who want to be reimbursed up to $12,000 for mold remediation must specify that on the form and then later submit documentation of costs incurred.

Nate Fata, a Surfside Beach lawyer who represented consumers in the lawsuit, said some homeowners have opted to cut small holes in their wall to see if mold is present on the vapor barrier within the wall.

“If you’ve got a plastic vapor barrier covered in mold, you might want to remediate,” he said.

Consumer who have not experienced problems and are confident that mold does not exist can opt for the automatic $2,000 payout. Those payments should be made by this summer.

“Homeowners should do whatever they feel most comfortable with,” he said.

Court documents show Horry Electric Cooperative required those participating in the Good Cents program to install a vapor barrier along the studs of the heated side of exterior walls. Lawrence Elkin, a professional engineer in Charleston, testified in an affidavit that such vapor barriers are “incompatible with Horry County’s climate.” The Southeast coast’s warm, humid climate caused condensation to form on the barriers, Elkin said, damaging the walls and insulation and promoting mold growth.

“Most people’s home is their biggest investment,” Fata said. “We are very pleased that these homeowners will be compensated for damages caused by the vapor barrier requirement.”

Penelope Hinson, manager of public relations for Horry Electric Cooperative, declined to comment on the settlement agreement.

The Good Cents program was developed by state-owned utility Santee Cooper, which set the requirements and licensed the program to other electric cooperatives throughout South Carolina. Evidence included in court documents shows Santee Cooper knew about the mold problem but did not tell Horry Electric Cooperative about the issue.

Horry Electric Cooperative sued Santee Cooper in 2013 in an attempt to hold the state-owned utility responsible for any costs incurred in the class-action lawsuit. A judge dismissed that lawsuit last week.

In addition to Fata, lawyers from the Richardson, Patrick, Westbrook & Brickman LLC law firm in Mount Pleasant represented the utility’s customers.

Contact DAVID WREN at 626-0281 or via twitter at @David_Wren_