Study rips plan for huge SC power plant. Will it cause monthly electricity bills to rise?

As legislators consider construction of a large natural gas plant to meet South Carolina’s growing energy demand, a consulting company is cautioning against the venture, saying the state-owned Santee Cooper power company has not looked at the matter thoroughly enough.

A study prepared at the request of the S.C. Public Service Commission said Santee Cooper is relying on “foregone conclusions’’ that it should commit to a huge new natural gas plant, as has been proposed.

In reality, the company needs to look more carefully at whether a large plant is the right way to meet future demands for energy, according to the Dec. 22 report. The study said Santee Cooper should examine downsizing the plant, while using more solar energy and battery storage to meet demand.

The PA Consulting Group study looked at Santee Cooper’s role in a proposed 1,020 megawatt natural gas plant, a facility that at one point was projected to cost at least $1 billion. The state utility has been discussing a joint venture with Dominion Energy, an investor-owned utility that, along with Santee Cooper, provides power to central, coastal and eastern South Carolina. The study did not focus on Dominion’s participation in the plant.

Santee Cooper, which provides power to about 2 million people in South Carolina, is interested in the plant to help make up for part of the capacity it will lose when the utility’s remaining coal fired power plants shut down.

Utilities across the state have begun closing coal plants because the power stations are increasingly expensive to operate and generate greenhouse gases that contribute to global warming.

Natural gas is abundant and viewed as a less polluting type of energy. Solar, preferred by clean energy advocates, is another way of offsetting the loss of coal plants. Solar energy facilities do not release greenhouse gases.

Santee Cooper’s 1,130 megawatt Georgetown coal plant is expected to close in seven years, meaning replacement power must be found.

“Santee Cooper is yet to comprehensively assess how best to address the looming capacity requirement economically and practically,’’ the study said. “PA feels that Santee Cooper has jumped to the conclusion that (it) must co-build a 1,020 (megawatt) gas unit without thoroughly assessing alternatives.’’

Until more is known, the consulting study recommends that the PSC withhold approvals for the proposed natural gas plant. It says Santee Cooper should not make binding commitments to such a project without more study.

“PA recommends that the commission withhold any approvals for the proposed (natural gas plant) and that Santee Cooper refrain from making any definitive and binding commitments .... until a more comprehensive exploration of alternative options has been conducted,’’ the report said. “There should be a focused examination of portfolios that includes procuring additional solar and (battery storage) in combination with downsizing the gas plant.’’

The study’s conclusions support arguments by environmental groups against constructing a large natural gas plant that they say could contribute to global warming, create the need for disruptive pipelines and wind up soaking ratepayers with higher monthly power bills because the price of natural gas is volatile.

Utilities and their supporters downplay those arguments, saying a 1,020 megawatt plant would meet energy needs as the state grows. That’s particularly important in recruiting industry that can help the economy, they say. Santee Cooper has about 5,700 megawatts of energy generating capacity from all sources, including coal, nuclear and natural gas. Dominion has a comparable amount.

The PSC is expected to discuss the report at a meeting next month. The utility regulatory board has not yet signed off on a comprehensive Santee Cooper energy plan that includes the utility’s proposed participation in the new gas facility. If the plan is approved, Santee Cooper and Dominion still would need other approvals from the PSC, as well as from environmental agencies, according to current laws.

Some members of the state Legislature say a gas plant should be part of the state’s future energy mix.

Sen. Tom Davis, R-Beaufort, filed a bill Tuesday that authorizes Santee Cooper to jointly own a natural gas plant, an approval needed because the utility is owned by the state.

It’s part of a sweeping energy bill that looks at using more natural gas and nuclear power, loosening regulations on utilities and giving big industries the freedom to choose who sells power to them. It could hold up efforts to shutter the state’s remaining coal plants until new energy sources are available to replace them.

An energy bill is also expected to be filed in the House.

Davis, who has worked on the Senate bill for months, said he wanted to get the conversation started on how to provide energy in the best, most reliable and most affordable way possible.

He’s willing to compromise on elements of the bill, including whether a large plant or multiple smaller plants are needed — or whether Dominion and Santee Cooper need to build one jointly. But something needs to be done, Davis said.

He said the section on natural gas is critical to the state’s demand for power in the near future. The bill encourages Santee Cooper and Dominion Energy to construct up to two natural gas plants of 2,000 megawatts, with lines to serve them. Facilities could be located near Canadys in Colleton County or other parts of the Lowcountry, the bill says.

“It’s important to acknowledge that natural gas is going to be an important part of our intermediate capacity future,’’ Davis said.

Rep. Bill Sandifer, who chairs the state Regulation of Public Utilities Review Committee, said South Carolina needs more nuclear and natural gas-fired power plants.

“We are a long way from having enough energy,’’ the Oconee County Republican said during a legislative briefing for the media earlier this week.

Environmentalists were delighted that an independent study for the PSC backs some of their arguments against a massive natural gas plant.

They expressed reservations, however, about the Davis bill. The legislation has multiple elements that they support — Davis is often an ally on environmental issues — but it also eases regulations that could help gas pipeline projects at the expense of the environment and ratepayers, they said.

Studies like the PA Consulting report are important to keep the state on the right energy path and to avoid a repeat of a major power plant construction failure in 2017, some environmentalists said. They likened the momentum for Santee Cooper and Dominion to build a big natural gas plant to the failed effort seven years ago to construct two nuclear reactors.

In that case, Santee Cooper and Dominion’s predecessor, SCE&G, persuaded legislators to ease rules so they could build the reactors in Fairfield County, only to walk away from the failing project and leave ratepayers on the hook for billions of dollars in expenses. The V.C. Summer plant nuclear debacle followed what critics said were inadequate and inaccurate studies.

“There’s a lot of lessons that we can and should have learned from V.C. Summer that we can apply to this conversation, for sure,’’ said John Tynan, director of the Conservation Voters of South Carolina. Other organizations expressing reservations about a massive natural gas plant were the Citizens Climate Lobby of Beaufort County and the Coastal Conservation League, headquartered in Charleston.

In addition to concerns about pollution from natural gas, environmentalists say a big, new gas plant could create the need to lay down miles of pipeline that would disrupt the environment and cross the land of many private property owners.

Mollie Gore, a spokeswoman for Santee Cooper, defended the company’s push for natural gas. The utility wants to use a variety of sources — including solar – to produce energy. Natural gas is among those ways, she said.

Gore said Santee Cooper already is committed to solar. The company plans to rely on more than 2,150 megawatts of new solar generation in the next decade, as compared to the 1,020 megawatts of natural gas that is proposed, she said.

She also said the PA Consulting report notes that Santee Cooper has complied with the law and “addressed customer needs.’’ The study indicates the Santee Cooper plan is cost effective, even though the report calls on the company to look at more solar and battery storage.

Dominion, which is headquartered in Virginia, said it’s working to determine the best path to end its reliance on coal. A large, “highly efficient’’ combined cycle natural gas plant with Santee Cooper is the best way to replace coal-fired power plants, the company said Wednesday. A key site under consideration is the one in Colleton County, the company said.

“Building a shared resource could create economies of scale for participating utilities, which could reduce costs to customers, including the electric cooperative utilities Santee Cooper serves,’’ Dominion spokeswoman Rhonda O’Banion said in an email. “It could also enhance efficiencies in natural gas pipeline expansions and reduce the environmental footprint of the generation facilities and natural gas pipeline projects needed to replace coal generation on both systems. ‘’

In 2022, the state’s electric cooperatives, which get energy from Santee Cooper and which likely would help pay for a natural gas plant, opposed building a plant in Georgetown County. Santee Cooper then entertained the idea of building its own, smaller natural gas plant in Hampton County.

Today, the cooperatives support the idea of a new plant in Canadys, said Avery Wilks, a spokesman for the cooperatives. Their reservations resulted from the likely need to establish potentially expensive new pipelines to serve the Georgetown site, Wilks said.

Staff writer John Monk contributed to this story.