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Atlantic Coast Pipeline waiting on Supreme Court, but natural gas debate in SC continues

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No applications have been submitted yet, but the battle lines are being drawn anyway.

The debate over natural gas continues to build in South Carolina, with industry groups and utilities highlighting a potential need for new pipelines and the state's environmental groups hoping to deter such projects.

Construction on the 600-mile Atlantic Coast Pipeline has been on hold since December because of legal challenges over its federal permits. It's now up to the U.S. Supreme Court to decide whether work may continue on the project, which is set to begin in West Virginia and end in Lumberton, N.C., some 21 miles away from the South Carolina border.

But those legal setbacks haven't stopped speculation about the massive project in the Palmetto State. 

The leaders of the S.C. Chamber of Commerce and the S.C. Manufacturers Alliance published a letter in The Post and Courier last week arguing South Carolina needs to add energy infrastructure to take advantage of new supplies of natural gas. 

Ted Pitts, the S.C. Chamber's CEO, told The Post and Courier this week that his group is not advocating specifically for the Atlantic Coast Pipeline. And it isn't calling for more capacity to be built immediately. Instead, the Columbia-based business group is looking ahead to the potential demand for natural gas in the future. 

Pitts believes gas is the "energy of choice," and he thinks South Carolina will need additional supplies at some point to grow its economy and create jobs. 

"Eventually, we are going to need additional natural gas capacity," Pitts said, adding that the state's economic opportunities are tied to reliable supplies of energy. 

Ted Pitts (copy)

Ted Pitts is CEO of the S.C. Chamber of Commerce. Provided

Duke Energy and Dominion Energy, South Carolina's largest electric and gas utilities, are members of both the S.C. Chamber and Manufacturers Alliance. They also are the primary owners of the Atlantic Coast Pipeline. 

Together, the two energy giants hold a 95 percent ownership stake in the interstate conduit. And their utilities supply 1.4 million customers with electricity in South Carolina and more than 500,000 homes and businesses with natural gas.

For now, Duke and Dominion said they are focused on completing the pipeline into North Carolina. Any further expansion would require approval by the Federal Energy Regulatory Commission. That process often takes more than a year.

But the companies' ready supply of customers in South Carolina has fed speculation of the Atlantic Coast Pipeline being extended into South Carolina in the future. 

Charlotte-based Duke already announced its intention to have its subsidiaries in South Carolina sign 20-year supply contracts for the pipeline even if it doesn't cross the border, according to the company's filings with the Securities and Exchange Commission.  

Thomas F. Farrell II (copy)

Dominion Energy CEO Thomas F. Farrell told state regulators last year that he was "hopeful" the Atlantic Coast Pipeline would be extended into South Carolina. Provided/Dominion Energy

Dominion, which is headquartered in Richmond, Va. and purchased Cayce-based S.C. Electric & Gas earlier this year, has not announced any plans on behalf of its newly acquired customers in the Palmetto State. But CEO Thomas Farrell has said it could be a possibility if the company decides there's a need.

Dominion purchased SCE&G as part of its takeover of SCANA Corp. in January. As a result, it could ink a deal between the South Carolina business and its other subsidiary that is building the pipeline. 

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"We would like to bring the pipeline to South Carolina if the demand is there," Farrell said last year. "We have had no discussions with anybody about that. We have no contracts. There's no possibility of it coming here today. I am hopeful that it will come."

Farrell isn't the only utility executive still considering the pipeline's possibilities.  

Santee Cooper, South Carolina's state-owned power provider, factored the Atlantic Coast Pipeline into its future energy forecast last month.

SanteeCooperExecutives (copy)

Santee Cooper CEO Mark Bonsall and deputy CEO Charlie Duckworth created a new energy plan that is considering using gas from the Atlantic Coast Pipeline. Cindi Ross Scoppe/Staff

The newly proposed plan weighed how the Moncks Corner utility might feed new gas-fired power plants through the interstate pipeline. Santee Cooper's new senior leadership team said planning is contingent on the project not being canceled or significantly delayed. 

Charlie Duckworth, Santee Cooper's new deputy CEO, put together the new energy plan. It calls for a new 500 megawatt gas-fired power plant to be completed in the Pee Dee region of the state by 2027. 

"The best way to get gas to that site is the Atlantic Coast Pipeline," Duckworth said last week. 

As it stands, the project isn't expected to be finished in North Carolina until late 2021, and the current cost estimates are creeping up toward $7.7 billion. It would take even more time and money to permit, engineer and extend the pipeline into South Carolina. 

That has alarmed environmental groups, such as the Coastal Conservation League, the Sierra Club and others who are undertaking their own campaigns to show the Atlantic Coast Pipeline isn't needed in South Carolina. 

The Southern Environmental Law Center, for example, hired energy consultant Gregory Lander last year to push back against suggestions that the state doesn't have enough natural gas available through existing pipelines. 

Lander argued that supply is not an issue, pointing to the Transco pipeline, which runs through the Upstate.

Lander said there's enough gas available in the 10,000-mile interstate carrier and that it could be pumped through Dominion's lines to other parts of South Carolina. That's actually Santee Cooper's backup plan for its proposed gas-fired stations if the Atlantic Coast Pipeline isn't available in time. 

Blan Holman, an attorney with the Southern Environmental Law Center, said industrial gas customers in some parts of South Carolina may have problems connecting to a gas pipeline, but that's a separate issue from what he sees as the question at hand. 

"Do we need more gas transmission capacity coming into South Carolina? We believe the answer is no," Holman said. 

Environmental groups also are eager to prove that Santee Cooper doesn't need to rely on the Atlantic Coast Pipeline or new gas-fired turbines to power its customers and the state's 20 electric cooperatives in the future. 

They commissioned a study last month from Synapse Energy Economics to look at Santee Cooper's energy mix, as the South Carolina legislature weighs whether to sell off the state-run utility.

The report argued it would be cheaper for Santee Cooper to build even more solar-power arrays instead of replacing its aging coal plants with gas-fired turbines. 

"The least expensive pathway to meet power needs going forward is steady investment in renewable energy and energy efficiency," the report said. 

Reach Andrew Brown at 843-708-1830 or follow him on Twitter @andy_ed_brown.

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