South Carolina Electric & Gas projects it will need to build a new power plant in the next five years to keep up with rising electricity demand after the company called off its nuclear project last summer.
In a new filing with state regulators, SCE&G says it will need another plant so that it has enough extra capacity to keep the lights on in a cold snap. And after its bet on nuclear went bust, the utility expects its new plant to burn natural gas.
It’s not yet clear what the plant would cost to build, or where it would go. What’s more, the state’s gas pipelines are already running at full capacity, though SCE&G has reserved most of the space in an expansion project that fired up this month.
The low price of natural gas was one of several reasons that SCE&G and the state-owned power company Santee Cooper pulled the plug on their nuclear project last summer. Their effort to expand the V.C. Summer by adding two new reactors was up against ballooning costs and a faltering schedule — all while gas prices plunged to their lowest level in decades.
The utilities walked away from the project after spending $9 billion. And when they did, they made a bet, in part, that natural gas would stay cheap. Fracking technology had set off an exploration boom in the Northeast and Midwest, and forecasts predicted low prices for years.
South Carolina’s growing population should boost electricity consumption in the state, even though that expansion is expected to be balanced out by businesses and homeowners improving energy efficiency and installing solar panels.
But SCE&G told regulators that it will need more power to keep up when it gets cold — a need the V.C. Summer project was supposed to meet for years to come.
South Carolina homes don’t usually use heating oil, so the state leans heavily on its electric grid in the cold months. And solar panels aren’t much good early in the day when people wake up and turn on the heat.
The power company plans to build in some buffer room at first by purchasing a gas-fired power plant in Calhoun County, south of Columbia. SCE&G agreed to buy the plant last year and offered eat the $180 million cost in an effort to quell the uproar around the failure of its nuclear project.
In an annual energy plan filed late last month, SCE&G said it would look to fire up another plant by the winter of 2023. The company says it would take two or three years to get a new plant approved.
SCE&G spokesman Eric Boomhower says the report is "only a plan — not a decision." The company is still reviewing its options, and it would need to find a location near electric transmission lines and a natural gas supply.
"For a number of reasons, including cost and environmental considerations, SCE&G determined that combined-cycle, natural gas-fired generation represents the best option for meeting the base load power needs," Boomhower said.
If the goes through, the planned gas-burning facility would be the company's first new power plant since 2004, when it opened one in Jasper County. The proposed power station would be the company's second-largest gas plant, records show.
SCE&G, which sells power to more than 700,000 customers from Charleston to Columbia, didn’t answer questions about its plans on Wednesday.
In the meantime, state regulators already have their hands full with questions about SCE&G’s future.
Environmental groups and the state’s utility watchdog are trying to force it to eat the cost of the nuclear project, which accounts for almost a fifth of customers’ electric bills. And regulators are considering whether SCE&G’s parent company should be taken over by Dominion Energy, a Virginia-based energy giant.