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Power play |
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Tuesday, 26 June 2007 |
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Page 2 of 3
Power needs analysis
Santee Cooper is a good illustration of the challenges all utilities face in the state and the efforts that are being undertaken to meet them.
Santee Cooper’s residential customers of electric power grew by record numbers in 2006 and at a rate far surpassing previous years, said Laura Varn, the utility’s vice president of corporate communications and media relations.
Through Dec. 31, 2006, a total of 7,474 new residential customers were added, bringing the total direct-serve customer count to 156,462 in Berkeley, Dorchester and Horry counties. The highest previous year on record was 1997, when 6,303 new customers were added. The 2006 customer growth rate was 5.02% over 2005.
“What we’ve seen across this spectrum of customers is growth and more growth, with no end in sight,” Varn said, “and we’re seeing similar patterns across the state.”
Varn agreed that growth is wonderful news, while noting that it underscores the utility’s biggest challenge: meeting the load growth.
As of Feb. 27, there were 220 large residential development projects in either the design or construction stage in the region stretching from Georgetown to Myrtle Beach, Varn said.
“That’s 15,180 residential units that are in the works right now, the most concurrent construction Santee Cooper has seen in our entire history,” she said.
Santee Cooper’s residential customers make up about 20% of its customer base; industrial users make up about 31% and the state’s 20 electrical cooperatives account for the remaining 49%.
To meet the growing demand, Santee Cooper recently added a third 600-megawatt unit to its facility in Cross, one of its largest plants. A fourth 600-megawatt unit is 40% complete and is scheduled to go on line in January 2009.
Unit 3 cost $675 million to construct, while Unit 4 will cost an estimated $755 million. The total $1.4 billion project is the largest capital expenditure in Santee Cooper’s history.
Development pressures
“We’re always working actively to bring in major businesses,” said Varn. “When something major (like a new business or industry) comes on line, that’s when we have to rely on past planning and, in the meantime, make up the potential shortfalls.”
Varn added that in those “rare” instances when peak electricity use taxes the utility’s ability to produce power, Santee Cooper can go to the spot market to purchase coal or it can purchase excess power from other utilities in the Southeast.
As with Santee Cooper, CEPC’s biggest challenge involves meeting the demands of economic and population growth. In addition to the additional power requirements, rising real estate values mean additional costs in securing rights-of-way for new transmission lines.
Calcaterra emphasized that CEPC, with a current capacity of 5,000 megawatts, creates long-range forecasts and plans for future energy needs.
“The average industrial load is probably in the area of five megawatts,” Calcaterra said. “A typical manufacturing plant, employing 300 people, will use one megawatt, the amount of energy needed by 250 homes at peak use.”
While there are probably two or three exceptionally large electricity users in the state that require 100 megawatts—companies such as smelting plants, paper mills or plants that are extraordinarily reliant on automation—Calceterra doesn’t stay up nights worrying that the next big economic development announcement will “break the circuit,” he said.
“You’re never going to have 10 of those companies at one time come into the state, and if you did and they started to really press you, you could always buy some more power,” he said.
The problem for Santee Cooper and other power providers is that power plants cannot be built overnight. Energy resource deployment must be mapped out in the utility’s “generation plan,” a document Santee Cooper revised most recently in April 2006 due to the growth in the state and drastic changes in oil and gas prices.
CEPC also plans ahead.
“We do a 20-year forecast and then act on the first 10 years of it,” Calcaterra explained.
In an effort to keep up with projected growth, Santee Cooper recently announced construction of a 600-megawatt coal-fired station in Florence County, which it intends to have on line in 2012. The company also is actively exploring the nuclear option.
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