Coal-fired power plant shelved

PINOPOLIS -- Three years' worth of controversy surrounding Santee Cooper's planned Pee Dee coal plant all but died Monday when the public utility's board voted to suspend the project.

The decision hinged on three key reasons: The economic recession lightened Santee Cooper's demand and pulled sales down 5 percent from last year; proposed federal regulations call for new, costly technology on plants; and the utility's biggest customer, Central Electric Power Cooperative, plans to shift 1,000 megawatts of its load to North Carolina-based Duke Energy beginning in 2013.

Santee Cooper president and chief executive Lonnie Carter said that although the vote was termed a "suspension," that language merely creates a safety net in case the Central deal falls through or another major change in business restores the need for more power.

Laura Varn, Santee Cooper vice president of corporate communications, called that possibility remote and said the board would have to take formal action to restart plans or to cancel the plant for good. Although utility officials would not provide a time line for making that final step, Varn noted a March deadline for Central to back out from its transfer without penalty.

The vote marked a major victory for environmental groups around the state that had watched the plant progress over the past few years. Carter praised the decision as an example of Santee Cooper doing "the right thing."

"They know they can count on us, our stakeholders," he said. "Our mission is not to build power plants. Our mission is to provide reliable power." As of July, the utility had spent $242 million on the facility. Carter said a lot of those costs stem from pricey equipment, which Santee Cooper plans to sell after the board rules out the plant altogether.

Santee Cooper also received an air permit from the S.C. Department of Health and Environmental Control and pursued additional permits from the Army Corps of Engineers.

Chairman O.L. Thompson stressed at Monday's meeting that the utility should halt the plant in a manner that makes it easy to resume in case the facility becomes necessary later. He also called the suspension "a shame in some respects" because the generator would have created 1,200 jobs in an economically depressed corner of the state.

Santee Cooper began planning the $1.2 billion plant more than three years ago. A recent analysis commissioned by the Coastal Conservation League, a primary opponent of the project, found the generator estimate totaled hundreds of millions of dollars less than similar generator estimates elsewhere in the country.

The report also determined that the facility would release millions of tons of carbon dioxide annually, a costly sum if lawmakers choose to tax those emissions.

While detractors deemed it risky, Santee Cooper officials described the plant as necessary. But that argument largely collapsed when Duke offered to take a portion of business from Central, a customer that accounts for half of Santee Cooper's total load.

Michael Couick, chief executive of Central's umbrella organization Electric Cooperatives of South Carolina, said the business transfer makes sense because of the price of new plant equipment required to stay with Santee Cooper. Plus, he said, Santee Cooper relies more heavily than Duke on fossil fuels.

"If you look at Congress regulating carbon emissions specifically, it would be more affordable in the long run," he said.

Santee Cooper and Central first forged a relationship in 1981, according to Santee Cooper senior vice president R.M. Singletary III. The current agreement lasts through 2023 with a 10-year extension.

If all goes as planned in transferring some of the load to Duke, that arrangement will extend the contract through 2030.

Central must elect to make the switch by Aug. 31 and can withdraw without penalty no later than March 31.

The transition would begin at the start of 2013, gradually working up to 1,000 megawatts. Santee Cooper officials stressed that the hard part lies ahead, with a host of state and federal approvals needed to make the switch.

Environmental groups, which came from around the state to attend the meeting, praised the decision to suspend the plant in the meantime.

Peggy Brown, a board member for the South Carolina chapter of the Sierra Club and national resource director with the League of Women Voters, said the vote marked a great day for South Carolinians. Brown lives in Florence, near the plant's intended site.

Ben Moore with the Coastal Conservation League said the decision "positioned South Carolina well to develop the state's next chapter when it comes to energy, and that is no longer going to be coal."

And from Blan Holman, senior attorney with the Southern Environmental Law Center: "It is fitting that on this last day of the Cash for Clunkers program, the Santee Cooper board has spared South Carolinians from buying a ... clunker coal plant."

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