With $1 billion power plant on hold, SC electric cooperatives offer alternative

Months after choosing not to invest in a power plant estimated to cost $1 billion, South Carolina’s electric cooperatives are proposing to cobble together an array of energy resources to provide power in the future.

The Central Electric Power Cooperative agreed this week to develop what it called a “multi-part solution’’ to South Carolina’s future energy needs. Environmentalists said they were encouraged, but lawmakers expressed concern.

Central Electric, which represents the state’s major electric cooperatives, declined early this year to participate in the Santee Cooper utility’s plan to build a large natural gas plant to replace coal-fired units the company will shut down in Georgetown County.

The cooperatives’ decision effectively scuttled plans for a new natural gas plant in Georgetown to replace the coal units.

For that reason, the cooperatives had to come up with their own plan to make up for the pending Winyah coal plant shutdown. The cooperatives are major customers of Santee Cooper, the state-owned power company, and have traditionally worked closely with the utility.

The concept approved Wednesday is to use multiple approaches to help replace the roughly 1,100 megawatts that will be lost when Santee Cooper’s Winyah coal plant closes by 2029, rather than putting all of the effort into a single power plant.

It was not known this week how the Central plan might affect monthly power bills for cooperative customers.

Among the cooperatives’ alternatives is buying or leasing utility scale batteries, a growing type of technology that can store power that is generated but not immediately used.

Solar energy, increasingly looked at as a way to cheaply provide power, benefits from batteries because energy isn’t produced from the sun at night or during extended rainy periods. Solar is considered a non-polluting way to make energy.

The cooperatives also are looking at voluntary consumer programs to limit energy use during peak times, buying energy from existing producers and acquiring energy from any new power generators in the future.

“The details of these decisions will be worked out through the next year,” Robert C. Hochstetler, Central’s president and CEO, said in a news release. “We’ve examined many options looking for the best approach. Both our staff and consultants have worked hard to find the optimal solution for our members’ needs.”

Santee Cooper spokeswoman Mollie Gore declined to comment on the Central proposal.

The utility is expected to provide its own future energy plan early next week. The company is closing the Winyah coal plant because burning coal adds to greenhouse gas pollution and because running the aging units is increasingly expensive.

The idea of building big new power plants to meet future energy needs has drawn skepticism from environmentalists and some consumers in South Carolina for both financial and environmental reasons.

Critics say it is a costly option that can expose ratepayers to higher power bills. A natural gas plant could top $1 billion to build, conservationists say.

Aside from the gas plant, Santee Cooper has in the past 15 years pulled out of two efforts to build large power plants because of questions about the need and the expense.

In 2017, Santee Cooper and Dominion Energy’s predecessor, SCE&G, pulled the plug on construction of a massive nuclear power plant expansion north of Columbia as costs skyrocketed and ratepayers were increasingly exposed. The failure of the V.C. Summer expansion drove up rates for thousands of energy customers in central and eastern South Carolina.

Santee Cooper also dropped a plan in 2009 to build a coal-fired power plant in the Pee Dee region of South Carolina.

But some state lawmakers aren’t sold on Central Electric’s recent efforts. Central is to meet with lawmakers next week.

A large plant that jointly involves the electric cooperatives, Santee Cooper and potentially other power companies could save money, lawmakers say. One potential site for a natural gas plant is at Canadys, a small community along the Dorchester-Colleton county line between Columbia and Charleston. SCE&G once ran a coal-fired power plant at the site.

“I’m under the impression that Canadys is the quickest, least expensive place for a new generation facility to be jointly done by providers in this state,’’ state Sen. Nikki Setzler, D-Lexington, said at a Sept. 27 state Joint Bond Review Committee panel meeting.

Setzler, in an interview this week with The State newspaper, said Central Electric’s decision to work separately on a plan to handle future energy needs could hurt Santee Cooper.

The company has had financial challenges recently because of rising fuel costs. It has agreed not to raise rates for the next two years because of a lawsuit. The Joint Bond Review Committee agreed this week to let Santee Cooper borrow $450 million.

“We feel like there ought to be a united effort by everybody to try to make Santee Cooper successful,’’ Setzler said, noting that a joint venture at Canadys could help spread out costs. “What we are interested in is what actions are taken by others that could negatively impact the financial condition of Santee Cooper.’’

Setzler said the cooperatives, which have had a long-standing relationship with Santee Cooper, “ought to be cooperating with us and each other in order to benefit the taxpayers.’’

Santee Cooper is owned by the state and provides electricity to about 2 million people, the majority of them electric cooperative customers.

Eddy Moore, who tracks energy issues for the Coastal Conservation League, said a new natural gas plant would not help Santee Cooper overcome financial struggles.

While the cost of building a natural gas plant might be spread out with a joint effort, the cost of buying natural gas is volatile and prices could easily rise, which would put more of a financial burden on Santee Cooper, he said.

“If the problem is the solvency of Santee Cooper, we need to solve that problem,’’ Moore said. “But you don’t want to build a type of power plant that is not what you need in an attempt to solve the economics.’’

Moore also said the cooperatives have taken the right path for the environment. A natural gas plant still releases carbon dioxide and other contaminants, even though natural gas plants are often considered less polluting than coal plants, Moore said. A new natural gas plant also would need additional pipelines that could disrupt sensitive natural areas, he said.

“The cooperatives are making a smart decision not to reflexively replace a large coal plant with a large gas plant that would be exposed to millions of dollars of fuel cost volatility and require risky pipeline construction,’’ Moore said. “I am encouraged that they have included a package of newer technologies and hope as the details come out we can fully understand the plan.”