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SC energy sector at a 'turning point' as utilities plan for the coming decades

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South Carolina's energy industry is at a crossroads as utility officials weigh how much money to invest into renewable sources, how long to keep their aging nuclear reactors operating and how quickly to shut down their remaining coal-fired power plants.  

The three primary power generators in South Carolina — Duke Energy, Dominion Energy and Santee Cooper — are all in the process of forming long-term plans for how to supply electricity to millions of power customers in the state over the next 15 years. 

Whether South Carolinians realize it or not, the outcome of those plans will affect them.

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Dominion Energy's Williams Power Station in Berkeley County burns coal and natural gas. Environmental groups are pushing the utility to speed up the retirement of that plant and Dominion's two other coal-fired stations. File/Staff

The decisions the utilities make will help dictate where South Carolina's electricity comes from in the coming decades, how much that power costs each month and how damaging that energy production is to the environment when people flip on a light switch or adjust the thermostat. 

This isn't the first time that Duke, Dominion and Santee Cooper have gone through this type of planning process. Forecasting how much power people will use and studying how to best supply that electricity is something utilities have been doing for decades. 

But the work has taken on far more importance in recent years. Companies in the electric utility industry now need to account for man-made climate change, the increased adoption of electric vehicles, the expansion of solar and wind energy, and investments in new technologies such as large battery-storage devices. 

"I think the industry is ever-evolving, and this latest evolution is a big change," said Glen Snider, who leads the planning team for Duke's two utilities in South Carolina. 

Every utility in the country, Snider said, is juggling how to provide reliable power to customers, how to cut carbon emissions and, at the same time, ensure power bills don't increase too much for homes and businesses. 

South Carolina lawmakers recently put a bigger spotlight on that planning process to make sure the utilities in the state are meeting those priorities. In 2019, the Legislature passed a law that set several basic benchmarks that utilities need to meet when developing their long-term forecasts.

That law also gave South Carolina's utility regulators, consumer advocacy agencies, solar developers and environmental organizations a chance to challenge the utilities' business plans. 

And those groups have not wasted any time in flexing that newfound muscle. They are now pushing the state's utilities to speed up the adoption of renewable energy, increase energy-efficiency measures for customers and close plants that pump the most heat-trapping gases into the atmosphere. 

Eddy Moore, the Coastal Conservation League's energy and climate program director, said the public now has the ability to hold the utilities' feet to the fire. That's important, he said, when companies like Duke and Dominion have made public promises to eliminate or offset all of their carbon emissions by 2050.

"I think it's a turning point," he said. "You put everything on the table and figure out if you can have a better system." 

Moore expects public involvement in the companies' energy planning to increase in the coming years. The process, he said, is becoming more important for large businesses, like Google, that have sustainability goals and local governments, like the city of Charleston, that are trying to reduce their carbon footprints. 

The plans South Carolina's utilities put forward now, Moore said, will go a long way in determining how quickly those groups can meet their environmental goals, and how costly that transition will be for South Carolina. 

'Complicated problem'

Combined, Duke, Dominion and Santee Cooper operate more than 95 generating stations throughout South Carolina and North Carolina. 

Their plants are a mixture of gas turbines, nuclear reactors, aging coal-fired boilers, new solar farms, 100-year-old hydroelectric dams and small generating units that are powered by gas from landfills.

Together, those power sources are able to meet most of the energy demands of the three utilities' ratepayers in South Carolina and the more than 2 million people who receive power from South Carolina's 20 electric cooperatives. (Duke's plants also serve roughly 3.4 million customers in North Carolina.)  

What South Carolina's power providers are trying to figure out now is how long they should keep their existing plants running and what types of energy sources they'll need to invest in to replace them. It's a process that could dramatically change what South Carolina's energy system looks like by 2035.

In general, all three power providers are considering approaches that include expanding solar power in South Carolina and adding more natural gas generation. They're also looking at extending the life cycles of the seven nuclear stations that supply the state, including the V.C. Summer plant in the Midlands, where a $9 billion expansion that would have added two new reactors failed in 2017 after years of delays and cost overruns.

The final outcome of the utilities' plans could hinge on a variety of factors, such as the price of natural gas, potential regulations on carbon pollution and the utilities gaining approval from the federal government to continue operating their aging nuclear reactors, some of which have been in use since the early 1970s. 

Rodney Blevins, CEO of Dominion Energy South Carolina, said he sees the next decade and a half as an opportunity to overhaul the industry and meet customers' growing expectations that their energy will come from "cleaner sources." 

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"If you were going to start today, you wouldn't build what we have, but it's what we have," Blevins said. "It's a complicated problem" 

South Carolina's three largest power companies have already gone through substantial changes in the past decade. 

Data collected by the Energy Information Administration shows the amount of power generated by burning coal has plummeted for all three companies in the past 10 years. The utilities replaced that energy largely by building new gas-fired turbines and converting older coal plants to burn other fuels.

Charlie Duckworth, Santee Cooper's deputy CEO, said that has been the trend across the country. Coal plants, he said, are being eliminated for two reasons: It helps cut a utility's carbon footprint and it is increasingly saving customers money. 

"There was a time earlier in my career when the cheapest addition you could make was a coal plant," said Duckworth, who was hired to lay out a new energy plan for Santee Cooper. "That is not the case any longer." 

Data from the U.S. Environmental Protection Agency shows the cuts to Duke, Dominion and Santee Cooper's fleet of coal-fired power plants have helped to lower the utilities' carbon dioxide emissions substantially in recent years. But all three still have a long way to go if they intend to cut their remaining emissions in the coming decades. 

The EPA data shows plants operated by the three South Carolina power providers emitted more than 71 million metric tons of carbon dioxide into the atmosphere in 2019. 

Part of that total comes from electricity that Duke supplied to its customers in North Carolina. Nevertheless, that total equals the amount of greenhouse gas emissions released annually by roughly 15.4 million passenger vehicles. 

Closing out coal

One of the biggest points of debate right now is what to do with the coal plants that Duke, Dominion and Santee Cooper still operate. 

Several environmental groups, including the Coastal Conservation League, the Southern Alliance for Clean Energy and the Sierra Club, are trying to persuade the companies and South Carolina's utility regulators to close them for good. 

All three providers recognize the coal plants will need to be taken offline at some point. But the timelines for those closures vary. 

Santee Cooper, for instance, recently announced it would begin to phase out its Winyah station near Georgetown starting in 2023, but said it could keep its Cross station near Lake Moultrie open past 2030.  

Duke already shut down all of its coal plants in South Carolina, but it is still working to phase out its remaining coal stations in North Carolina. The Charlotte-based company put forward a forecast last year showing some of its coal units being retired as early as 2022 and the remaining ones largely being shut down by 2035. 

Meanwhile, Dominion's plans for its remaining coal-fired power plants recently landed the utility in some trouble.

Dominion, a Virginia-based company that bought South Carolina Electric & Gas two years ago, told state regulators that it does not have any plans to close any of its three coal-fired stations until after 2028. The utility's leaders also said it would take several more years before they could complete a study that would explore whether to retire those plant more quickly. 

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Duke, Dominion and Santee Cooper are all trying to determine how quickly they should retire their remaining coal-fired power plants. Those plants are shown in red.

Source: Duke Energy, Dominion Energy and Santee Cooper’s Integrated Resource Plans

As a result, the S.C. Public Service Commission, which regulates investor-owned utilities, voted in December to throw out Dominion's energy plan and send the company back to the drawing board.

During hearings, several commissioners asked why the company wasn't speeding up the closure of its coal plants, and others questioned whether Dominion was pursuing its carbon-reduction goals aggressively enough. 

“Why wait several years before making these decisions? Why not start now?" asked Tom Ervin, one of the PSC members. 

Officials at all three South Carolina utilities said the decision to shut down their remaining coal-fired power plants is a balancing act. They understand the push to close those plants, they said, but they need to do it in a way that ensures the utilities can still generate enough power when the demand for electricity peaks in the summer and winter. 

"I can't retire the the coal units we have right now because I wouldn't be able to meet the demand," said Blevins. "That's just the bottom line." 

Blevins said his team is trying to solve that issue, but he said "it's not in the cards right now." 

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

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