Watchdog: Carbon questions

Earlier this year, Nucor Steel, one of Santee Cooper's most important customers, sent a letter urging the utility's leaders to keep nuclear power in its mix of future energy sources.

The March letter by Dennis Boyd, Nucor's power engineer, also pointed out that Santee Cooper gets more than three-fourths of its electricity from coal plants, and that:

"Given the uncertainties associated with future construction costs, carbon cost and fuel cost, among other things, a diverse mix of base-load generation will be crucial to maintaining a reasonable supply of power at reasonable rates."

Nucor's letter is notable because of Santee Cooper's controversial plan to build a new coal-fired power plant in the Pee Dee. It also comes amid growing political momentum for a hard look at how the state will meet its future energy needs.

Driven by demand in China and India, the costs of coal and new coal-fired power plants have risen dramatically in recent years. These costs already are hitting us in the pocketbook.

Citing increases in the price of coal, SCE&G, Duke Power and several other utilities in South Carolina this year have asked regulators for permission to raise rates six percent or more, and some utility executives are saying their own costs may rise 30 to 50 percent, and that these increases eventually will end up on our power bills.

Meanwhile, coal plants are major sources of greenhouses gases, such as carbon dioxide, and both presidential candidates favor legislation that would make utilities potentially pay tens of millions of dollars for their carbon dioxide emissions.

In the Nucor letter, Boyd said, "We ask that Santee Cooper carefully consider the risk of escalation in coal pricing from boat coal demand and carbon penalties."

Blan Holman, a lawyer for the Southern Environmental Law Center, said he was surprised by the letter. "It's one of the first times we've seen an industrial customer say we have an over-reliance on coal."

Nucor has been a strong supporter of Santee Cooper's efforts to build its new Pee Dee plant.

Does Boyd's letter reflect a change of heart about that project?

Watchdog contacted Nucor and Santee Cooper, and a Santee Cooper official e-mailed back a copy of a new letter from Nucor dated Sept. 25.

"Let me emphasize that our letter was not intended to be and should not be read as a criticism of Santee Cooper's current plans to acquire the necessary generation resources and other resource options to meet the needs of its customers and the state," Boyd wrote. "...Santee Cooper's decision to construct a new coal unit, while continuing to pursue future nuclear and coal options, can be viewed as a reasonable plan ..."

Santee Cooper is seeking permits to build a 600 megawatt generator on the banks of the Great Pee Dee River. Officials argue that without a new generator, customers could face blackouts and brownouts in a few years. Santee Cooper and SCE&G also are teaming up to build a new nuclear plant next to an existing reactor north of Columbia.

The debate over how to meet the state's future energy needs is likely to heat up. State Sen. Glenn McConnell, R-Charleston, recently suggested the creation of a group to come up with a comprehensive energy strategy.