Lower usage doesn't stop utility building plans

SOUTH CAROLINA - South Carolina regulators unanimously approved a request by the state's largest private utility to build two nuclear reactors, meaning higher rates for electricity customers.

Residential rates will go up 0.4 percent in March, South Carolina Electric & Gas Co. spokesman Eric Boomhower said after the Public Service Commission's vote. That's about 48 cents a month for an average customer using 1,000 kilowatts.

Rates will go up an average of 2.5 percent a year for the next 10 years to help pay the financing cost for SCE&G's portion of the $10 billion project.

It is just one of several approvals South Carolina Electric & Gas Co. will need for the two 1,100 megawatt reactors it is building with state-owned utility Santee Cooper. Federal regulators also will review the company's nuclear plans. That process could take several years.

Opponents of the plants shouted at commissioners after the vote, saying they had sold out South Carolina ratepayers.

Environmental groups and others had said the company could meet demand with improved energy efficiency and by exploring renewable energy sources, such as wind and solar, but commissioners agreed with the company that more generating capacity is needed.

"Good energy efficient programs are equally important," said Public Service Commission chairman Lib Fleming. But "ultimately we need more electricity in the coming decades."

The commission's order approving the plant included a requirement that SCE&G create a detailed plan for energy efficiency and conservation by June 30.

That was the one high point for attorney Bob Guild, who represents environmental group Friends of the Earth.

"The commission agreed with us that the company's conservation programs are inadequate," Guild said after the vote. "The commission agreed with that, but gave them a blank check to build more power plants."

The environmental groups also said SCE&G is overestimating future demand because the company's most recent forecast does not take into account the recent economic downturn.

U.S. electricity sales were down 1 percent in 2008 from 2007, said Ed Legge, a spokesman for power industry trade group Edison Electric Institute. Duke Energy Co. reported that 2008 electricity sales were down 1.3 percent while the number of residential customers increased. SCE&G will report last years figures when it reports its fourth-quarter and year-end earnings.

In its 2009 energy outlook report, the federal Energy Information Administration forecasts annual growth in electricity use to be 1 percent between 2007 and 2030. That's down slightly from the 1.1 percent annual growth forecast in last year's report.

Legge said despite the lower growth estimates, companies nationwide are still moving forward with plans to add more capacity.

"So demand and output did go down a little last year, but... people have become more dependent on electricity just for everyday use," Legge said. "It's really going to depend on how long this recession goes on."

SCE&G's last plant came online in 2004 — a natural-gas fired plant in Jasper County in the southernmost part of the state. The company's one nuclear plant, which it also operates with Santee Cooper, came online in 1984.

The two new reactors it wants to build are on that same property in Fairfield County. The first unit is planned to begin generating power in 2016 and the second in 2019.

The nuclear plants also got a boost from Gov. Mark Sanford. The Republican governor said he supports nuclear power over a coal-fired plant that is being proposed by Santee Cooper.

Santee Cooper has said it needs the 600-megawatt generator in Florence County as a bridge to meet energy demands before the nuclear plant goes online.


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