New EPA rules will raise rates

Jefferies Generating Station north of Moncks Corner

Santee Cooper is looking to close two of its older coal-fired power plants and upgrade others under new rules laid out this week by the Environmental Protection Agency, moves that could eventually cost ratepayers more.

Jefferies Generating Station in Moncks Corner, home of the state-owned utility's oldest units, and Grainger Generating Station in Conway, which came online in the 1960s, are at risk because Santee Cooper has not fully upgraded them with expensive environmental controls to reduce mercury and other emissions, utility spokeswoman Mollie Gore said.

"We don't use these units all the time," she said. "We use them for peaking when it's really cold and really hot."

The footprint of the Conway plant might be too small to allow the necessary upgrades, and the aging Jefferies units could prove economically impractical to bring them up to the new standards, Gore said.

"We need to look at the economics of bringing those into compliance," she said. "It could be too expensive to be practical."

The two plants produce 568 megawatts, or 10 percent, of Santee Cooper's generating capacity. That's enough to power about 285,000 homes. The plants employ about 180 people, or 10 percent, of the utility's work force. The bulk of those -- about 135 -- are at the Jefferies site near Pinopolis Dam.

Under the new federal rules, companies have three years to comply or shut down with the option of a one-year extension to avoid brownouts and a fifth year if it is deemed a plant is critical to the power grid.

Asked how Santee Cooper would make up for the loss of power if the utility decides to close the plants, Gore said, "That's a very good question. It's a question of timing."

Santee Cooper and South Carolina Electric & Gas plan to build two new 1,100 megawatt nuclear units north of Columbia. The first is to come online in 2016, giving the utility a four-year window to shut the Grainger and Jefferies units down and still maintain generating capacity, she said.

As for the employees, Santee Cooper is not filling positions as they come open at other power-generating plants and hopes to transfer as many workers as possible from sites it might close, Gore said.

Santee Cooper has been mulling over the expected new environmental rules and weighing its options ahead of time.

"Obviously, our review will kick into overdrive right now," Gore said. "We are as prepared as we could be at this point and hope to make decisions as soon as possible."

The new rules also mean the utility will have to spend more money to upgrade its coal-fired power plants at Cross in Berkeley County and Winyah in Georgetown, two plants where Santee Cooper has already invested hundreds of millions of dollars to bring them into compliance. The new rules require a higher level of environmental safety.

"We will have to spend more money at Cross and Winyah," Gore said. "It's just a question of how much. This is the most expensive rule that the EPA has ever come out with."

Those costs will eventually be passed on to Santee Cooper's 165,000 residential and commercial customers and the 30 large industries it serves through higher electric rates.

"The customers have to pay for that," Gore said.

The EPA estimated that the new equipment will prevent as many as 11,000 deaths, 4,700 heart attacks and 130,000 cases of childhood asthma across the nation each year. The EPA estimates that it will cost companies $9.6 billion to comply, but adds that the health benefits outweigh the costs by 9 to 1.

Reach Warren L. Wise at 937-5524 or on Twitter at @warrenlancewise.