April 28, 2009

Report Shows S-C Failed to Prove Need for Plant

Last week the Coastal Conservation League released a report demonstrating that Santee Cooper has failed to justify its coal plant proposal from an economic perspective. The report contends that if the plant is built, it would expose ratepayers served by Santee Cooper to considerable financial risk (i.e. much higher rates). It also shows that Santee Cooper has not adequately considered alternatives (i.e. efficiency, renewables, natural gas, etc.) to the plant...

From The State:
Study: Utility overstated need for coal plant
But Santee Cooper says plan ‘meets or exceeds all standards,’ need is real

Santee Cooper underestimated the cost of building and operating a coal-fired power plant near Florence in justifying the need for the facility, a new study says.

The utility did not properly account for the looming expense of carbon dioxide pollution, which could cost rate payers up to $168 million by 2015, according to the report by a nationally known energy and environmental research firm.

Synapse Energy, of Cambridge, Mass., prepared the study for the S.C. Coastal Conservation League, a vocal opponent of the coal plant. Synapse’s report is the first in-depth study by experts that examines state-owned Santee Cooper’s justification for the plant.

Santee Cooper officials say their research was thorough and the plant is needed.

The Synapse report says Santee Cooper’s plan to build two 600-megawatt coal-fired units is financially risky, unnecessary and results from “a flawed planning process.” It notes new coal-fired power plants are becoming potentially harder to finance.

“We have identified serious weaknesses and biases ... that call into question” Santee Cooper’s decision, the report says.

Read more at The State's website.
The full report is available for download at the CCL's website. The League summarizes the report as follows:
Santee Cooper is putting ratepayers at unnecessary risk for higher energy costs with its proposed 1320 MW coal-fired electric generation plant in southern Florence County, according to a report released April 22, 2009 by the Coastal Conservation League.

The analysis has identified serious weaknesses and biases in Santee Cooper’s planning that question the decision to build the proposed coal plant. Relying on documents provided by Santee Cooper and publicly available materials, the report concludes that the utility has failed to adequately account for a number of critical factors, including:

• reduced near-term power needs,
• high coal plant construction costs,
• the potential for energy saving programs to reduce demand, and
• reasonable estimates of carbon emissions under coming federal regulation.

“The Pee Dee Plant is too risky” said David Schlissel, lead author of the report, and Senior Consultant at Synapse Energy Economics, a nationally recognized energy research and consulting firm. The report documents trends that have changed the landscape for coal plant construction since Santee Cooper decided to move forward with the Pee Dee facility in 2006. The recent economic downturn has shown Santee Cooper's projections of future power needs to be too high. The reduced power gap could now be met with less risky alternatives. Schlissel went on to say, “Many proposed coal plants have been cancelled, delayed or rejected by state regulatory agencies and utilities as a result of economic uncertainties and risks.”

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