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Wednesday, 30 January 2008 |
By Molly Parker
Staff Writer
Santee Cooper’s board of directors on Monday agreed to move forward with negotiations to secure a power contract on the open market to ensure customers have electricity between 2010 and 2015, by which time the utility plans to have a new coal-fired plant online in rural Florence County.
The electricity per megawatt will cost substantially more than what Santee Cooper spends to generate power, and well above what the utility paid last time it went to the open market for a multiyear power contract, CEO Lonnie Carter said.
“It’s a seller’s market,” Carter said. “Capacity is very light.”
Carter has not seen the wholesale market this tight in his entire career, he said.
The meager response from the open market underlines the need for the utility to move through the permitting process and start construction of its new power facility, Carter said.
There isn’t much excess energy available on the grid, he said, and what is up for grabs is very expensive.
Meanwhile, new foes have emerged on the national scene to Santee Cooper’s plans to build the Florence County plant. Attorneys general from seven states and Washington, D.C., last week sent a letter to the S.C. Department of Health and Environmental Control asking the state to deny the air quality permits Santee Cooper needs to build the plant.
“Climate change is the single greatest environmental challenge facing the world today,” the letter said. It urged DHEC to deny permits unless Santee Cooper can build a facility that substantially minimizes or sequestrates carbon dioxide emissions.
It was signed by attorneys general in California, Connecticut, Delaware, Massachusetts, New York, Rhode Island, Vermont and Washington, D.C.
Last week, before the letter came to light, Carter said he does not put much stock in criticism and is focused on providing reliable service and affordable power in an environmentally responsible way, with no one tenet of his mission receiving more weight than another.
“It’s easy to second-guess,” he said in a recent interview with the Charleston Regional Business Journal. “But we have a responsibility to make sure the lights stay on.”
Santee Cooper commonly goes to the open market to meet peak demand, such as during the cold and hot snaps that occurred in 2007, both of which broke records for energy usage.
But this recent bid process was unusual in terms of how early the utility made its request, the length of the contract and the weak response from the market. A new coal-fired unit is slated to come online at the utility’s Cross plant in January, but that power will be spoken for by 2010, the utility says.
Santee Cooper doesn’t expect the Florence County plant to be operational until sometime after 2012.
To fill the gap, 30 requests for proposals were sent out by The Energy Authority, a Jacksonville, Fla.-based energy trader that buys power on behalf of about three dozen utilities, including Santee Cooper.
Only three bids came back, Carter said. Noting ongoing negotiations, he declined to discuss the price or the capacity.
Also on Monday, Santee Cooper’s board approved a new program, Solar Homes Initiative, that will provide rebates of up to $12,000 for 10 qualified homeowners who install solar panels. State and federal tax credits can offset as much as $5,500 of the cost. The utility also offers a zero-interest loan program to help finance the cost of solar systems, and will pay customers for any excess energy they produce.
For more information, visit www.SanteeCooperGreen.com.
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