S.C. utility to shut half its coal plants, boost solar

Source: By Kristi E. Swartz, E&E News reporter • Posted: Wednesday, September 11, 2019

 The V.C. Summer Nuclear Generating Station. Photo credit: South Carolina Electric & Gas/Flickr

Santee Cooper owns part of the V.C. Summer Nuclear Generating Station in South Carolina, pictured here. South Carolina Electric & Gas/Flickr

The board of South Carolina public utility Santee Cooper yesterday approved a plan that will cut debt, diversify its generation fleet and modernize its business operations — all in hopes of insulating the electric company against a possible sale.

Santee Cooper’s proposed energy transformation, which includes shutting down a coal plant and adding 1 gigawatt of solar, follows a nationwide trend of shifting away from fossil fuels. But the state government-owned electric company has been in the spotlight for two years after it walked away from a nuclear project, V.C. Summer.

“An important objective of this plan is to be greener,” said Charlie Duckworth, Santee Cooper’s deputy CEO. This includes cutting emissions by 57% from 2005 levels by the 2030s.

Santee Cooper’s new business forecast is part of the process outlined by a new state law that is a broad road map for the utility’s future. Gov. Henry McMaster (R) has been leading the charge to sell the utility, whose suitors include other energy companies in the Southeast.

Separately, lawmakers have asked Santee Cooper executives about plans to transition its fleet away from coal and toward natural gas and renewables after the utilities eying the company proposed significant changes to its energy mix (Energywire, March 26).

“We heard the Legislature,” said board Chairman Dan Ray. “This is an attempt to move the company forward.”

The South Carolina Department of Administration will use Santee Cooper’s new business and resource planning forecast as the base plan by which it will compare other bids to buy the company, Ray said. Separately, Santee Cooper will work on its new reform plan that it will submit in November.

“This is not the reform plan,” Ray said.

The U.S. electricity industry is in the middle of changes driven by flat demand and a shift toward using distributed technology such as solar and storage to fill generation needs. This has made the already difficult task of long-term resource planning even more challenging.

Duckworth pointed yesterday to a decade ago when natural gas prices were between $12 and $15 dollars a million British thermal units and expected to rise. It was also the time when the coal industry was bracing for an attack from the Obama administration, and the nuclear industry was hoping for a resurgence after 30 years.

The shale gas revolution changed that, leading to ample supplies and falling costs. Renewables have also come into play especially as technology has changed and the costs have dropped.

“The point of this is not that you need to get your assumptions right because we won’t,” Duckworth said.

It’s more about creating a plan that can adapt to a wide variety of changing conditions, such as whether electricity demand grows, falls or stays flat and what types of fuels and technologies are the most economic and reliable to use, he added.

Clean energy advocates called the utility’s decision to boost solar a “welcomed change” (Energywire, Sept. 3).

Santee Cooper CEO Mark Bonsall began talking about the utility’s business forecast last month, according to multiple media reports. A board meeting scheduled for last week was postponed because of Hurricane Dorian.

During that time, it became apparent that Santee Cooper had developed a cost-sharing agreement with Atlanta-based energy giant Southern Co. The issue was on yesterday’s board agenda, but Ray said the companies dropped the arrangement.

South Carolina officials staunchly objected to the proposal, according to multiple media reports.

Included in the utility’s long-term forecast is a seven-year plan to cut its debt to its lowest amount in 40 years, Bonsall said. That being said, he praised the utility for having a strong balance sheet when he took over.

“I found Santee Cooper to be in better condition than I thought prior to getting here,” he said. “We’re paying all of our bills. We’re paying all of our bills with good margin.”