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Energy Matters

Today's energy industry is in the midst of rapid change. 

Some of that change is bringing about positive developments for Santee Cooper and our customers; other developments unfortunately herald the potential for rapid cost increases and uncertainty about future generation availability and economic competitiveness.

Through Energy Matters, we highlight these areas of change for our customers and other stakeholders. Knowledge is power, and by informing you we hope to equip you with the tools you need to prepare for change and address any potential concerns that change may hold for you. We welcome your feedback.

Generating and Regulations

Santee Cooper generates electricity from a variety of fuels, including coal, natural gas, nuclear, hydro and renewable energy sources. The U.S. Environmental Protection Agency has significantly toughened the regulatory climate for fossil-fueled generation, in particular coal-fired units, so much so that Santee Cooper has retired six units at our two oldest generating stations. We are building new nuclear generation, which will increase our capacity, and our customers are better served if we retire these older units than spend the money needed to keep them in compliance.

Unit Retirements:

Across the country, coal has accounted for about half of America's power needs. Until 2013, it represented about 70 percent of Santee Cooper's generation. After the retirement of six units at Grainger and Jefferies generating stations in 2012, Coal represents around 57 percent of Santee Cooper's generation.

A chief target for regulators is coal-fired emissions. Santee Cooper has always been in — or ahead of — compliance in these areas.

We were the first utility in South Carolina to install scrubbers, which remove SO2. Today Santee Cooper removes 90 percent or better of the primary EPA-targeted emissions on our main generating units, and our newest units remove close to 95 percent.

Santee Cooper takes environmental stewardship seriously. We have installed state-of-the-art equipment on new coal-fired generation, and we've updated older equipment. We helped fund clean-coal technology that is ongoing at the University of South Carolina. We are flexible enough to navigate this rocky regulatory landscape, although these regulations are driving up costs for our customers.

Santee Cooper retired both units at Grainger Generating Station (capacity 170 MWs) and all four fossil-fired units at Jefferies Generating Station (capacity 398 MWs).

After thorough review, we concluded it was cost-prohibitive to maintain Grainger and Jefferies in compliance with these toughening EPA standards. The units there are too old to justify the expense to our customers. We are still evaluating the impact and costs on our other units, and we plan to make the capital modifications necessary to keep Winyah and Cross generating stations viable.

In December 2011, EPA issued a rule setting maximum standards for permissible levels of mercury, heavy metals and other emissions by coal-fired power plants. As the most expensive rule ever implemented by EPA, it would cost utilities and our customers an estimated $9.6 billion. Compliance is required within three years of the April 2012 effective date. There is a one year extension from the state we have the opportunity of exercising if needed.

Santee Cooper has been a leader in installing environmental control technology at our generating stations. These new standards require significant additional emissions control equipment at a significant price, with negligible results beyond what Santee Cooper already achieves through our existing environmental controls.

Santee Cooper continues to analyze the MATS rule and will communicate closely with customers and other stakeholders as we reach conclusions and make decisions resulting from this regulation.

Already we have retired both units at Grainger Generating Station and all four fossil-fired units at Jefferies Generating Station. It was cost-prohibitive to maintain Grainger and Jefferies in compliance with these toughening EPA standards.

Climate Change & CO2

EPA is moving closer to regulating CO2 emissions at electric generating sources. In 2013, EPA issued proposed regulations for new electric sources and is currently developing proposed standards for existing electric sources, which are due by June 2014.

Santee Cooper does not support regulation of CO2 and other greenhouse gases under the current provisions of the Clean Air Act. However, the President has directed EPA to move forward, and we believe EPA should take into account the following in the development of these regulations: Allow each state to develop standards that fit their state’s needs and circumstances. Regulations should do no harm to the U.S. economy. Standards should be based on financially viable and proven technologies. EPA should provide flexibility to allow credit for programs that offset emissions, such as our renewable generation and energy efficiency programs.