The destiny of South Carolina’s state-owned utility Santee Cooper got here extra into focus final week as a key report detailed a number of potential future eventualities for the utility. Read on to see how we acquired right here, or skip forward to see what surprised us about the potential futures for Santee Cooper.

Maggie Shober and Chris Carnevale | February 24, 2020 | Energy Policy, South Carolina, Utilities

How did we get right here?

The South Carolina state authorities is contemplating promoting Santee Cooper in the aftermath of the utility racking up billions of {dollars} in debt for the failed V.C. Summer nuclear project, which was deserted in 2017. In 2018, choice makers’ consideration was on the different project companion in the nuclear debacle, SCANA, which ended up merging with Dominion Energy to assist settle the end result of its share of the project debt.

VC Summer Nuclear Plant Construction. Credit: High Flyer.

Now in 2020, state legislators and the Governor are analyzing the way to transfer ahead with Santee Cooper. At the instruction of the legislature final yr, the South Carolina Department of Administration (DOA) has solicited proposals for three several types of bids on Santee Cooper’s future:

  1. A proposal from the new management at Santee Cooper outlining reforms the utility would take to deal with the points that led as much as the V.C. Summer debacle.
  2. Proposals from exterior utility corporations to handle Santee Cooper, permitting the utility to stay below state ownership.
  3. Proposals from exterior utilities corporations to buy Santee Cooper from the state outright.

DOA obtained bids from 10 corporations and used some standardization assumptions to normalize bids and consider as an apples-to-apples comparability. They used this analysis to slender choices to what they thought-about the finest in every class (reform, administration, and sale), and put these right into a report launched final week. The chosen bidders have been Dominion Energy for the administration proposal and NextEra Energy for the sale proposal.

The choice to reform or promote Santee Cooper is probably the greatest alternative South Carolina has had, and possibly can have, to ensure that the state’s energy system is transitioning right into a 21st energy system. Unfortunately these plans have us wanting extra backward than ahead.

Five Surprising Things in the Santee Cooper Proposals

We learn all 111 pages of the DOA’s report so that you don’t must. Here are the 5 things in the proposals that surprised us the most.

1. All choices preserve coal operating for far too lengthy, including value and threat.

  • Santee Cooper’s coal vegetation are already uneconomic. It could be cheaper to retire the coal vegetation and as a substitute make investments in clear energy assets like solar and energy effectivity.
  • Continuing to run coal vegetation solely turns into riskier in the future, together with the threat of environmental injury and excessive prices related to future coverage modifications.

2. No choice proposes to meaningfully tackle excessive buyer payments by way of energy effectivity.

  • In 2018, South Carolina as a state ranked 4th for highest electrical payments in the nation, in line with EIA information.
  • The Santee Cooper reform proposes a small quantity of conservation with little or no particulars offered in the report, and energy effectivity doesn’t seem in any respect in the report’s description of the different two choices.

3. All choices open ratepayers as much as critical monetary and environmental threat by together with new gasoline vegetation.

  • The utility will seemingly have to function new gasoline for at the least 30 years to recoup prices, but gasoline prices and future insurance policies might make these power vegetation uneconomic a lot sooner and switch them into stranded property. This might depart ratepayers on the hook to pay for new power vegetation with out getting their cash’s value.
  • Gas is typically touted as a clear different to coal, however combustion of gasoline to generate electrical energy additionally produces native air air pollution and carbon emissions that contribute to climate change.

4. All choices leaving us wanting extra oversight and accountability.

  • The Santee Cooper Reform and Dominion Management choices barely transfer the needle to offer extra oversight than Santee Cooper had when it acquired itself into the V.C. Summer debacle.
  • The NextEra Plan would deliver the utility below PSC regulation, nonetheless the proposal would largely exempt NextEra from oversight whereas they transition over the subsequent 4 years, probably leaving clients with billions of {dollars} of prices.

5. Options are unclear on offering a simply transition to employees.

  • All choices suggest to chop jobs, however barely point out “retraining” and don’t describe what that entails.
  • None point out different facets of a simply transition, corresponding to offering medical insurance and different advantages to employees whereas they transition to a brand new profession.
Report from DOA on the future choices for Santee Cooper

Solar is a transparent winner in all choices

What did not shock us about the choices in entrance of the SC General Assembly is the inclusion of solar. Any proposal to maneuver a utility into the 21st century must embrace giant quantities of solar. After all, solar is now typically the least costly approach to generate electrical energy and has minimal environmental affect. Santee Cooper’s monitor report on solar in current years is horrible – – the utility is dead last amongst regional peer utilities on solar. This will change with any of the choices picked by DOA. The numerous choices suggest so as to add between 800-1,000 MW of solar in the subsequent 4-5 years, which might rocket Santee Cooper from the backside to close the prime of peer utilities.

However, there’s nonetheless room for enchancment, as evidenced by Santee Cooper’s neighbors. Duke Energy Progress and Dominion Energy SC (previously SCE&G) have present plans that put them at a better watts of solar per buyer in 2022 than both of those choices would put Santee Cooper in 2024.

This is in fact a excessive-degree evaluation of the totally different eventualities for Santee Cooper’s future, and far stays to be discovered about these proposals. The General Assembly shall be internet hosting hearings to get further particulars about the proposals in the House and Senate, and information tales are popping out nearly daily highlighting totally different facets of the bids.

If something is for certain, it’s that we gained’t know the way the bids will finally play out for months to come back. SACE will proceed monitoring this difficulty and dealing for a future for Santee Cooper that prioritizes clear energy, climate and financial justice, and wholesome communities.

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