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February 17th, 2020
By Shelley Robbins
On Tuesday, the SC Department of Administration (DOA) released its assessment of proposals to reform, manage, or sell Santee Cooper, the state-owned electric and water utility. Read the report here.
Last year, the Legislature charged the DOA with soliciting bids, vetting those bids, and forming a recommendation. The DOA selected NextEra's bid to purchase the utility and its assets and Dominion's bid to manage the utility. Santee Cooper's leadership also submitted an extensive reform plan. Complete details of the plans and information about the bids not selected have not yet been released, but they all increase solar and fracked gas generation (and retire coal).
One red flag we see with the NextEra bid is that the company insists on new legislation that would rubber stamp approval of a massive gas plant, bypassing the Public Service Commission process that allows parties to intervene and scrutinize. This caveat sounds a lot like the disastrous Base Load Review Act of 2007 (repealed in 2018). NextEra proposes spending $2.3 billion in capital investment with very little oversight. In addition, all of NextEra's solar would be "self-build" rather than through competitive procurement. With the exception of retiring coal, it all feels like a big slide backwards.
Naturally, we have questions. Our biggest concern for the Upstate is that all of the plans rely heavily on new fracked gas generation, and the site all three identified for new gas plants is the VC Summer Nuclear Station site in Fairfield County. Where would the gas come from? One obvious option would be a Dominion greenfield pipeline straight across Newberry County, tying the site to Dominion's Chappells Compressor Station on Lake Greenwood. We are all too familiar with Dominion's aggressive eminent domain tactics and sloppy construction practices associated with the 55 mile pipeline they built from Moore in Spartanburg County to Chappells back in 2017. Read about those impacts here.
Why would we want to commit the state to expensive gas plants and pipelines — with lifespans of 30 or more years — at a time when renewables and storage are dropping in price? Even Dominion is proposing an East Coast offshore wind project. Further, none of the plans pay much attention to energy efficiency, which is often the most cost-effective investment.
Another potential gas plant site is on land Santee Cooper owns on the Pee Dee River, where Dominion is currently proposing a pipeline expansion project. This site relies on the Atlantic Coast Pipeline (ACP) extending into South Carolina. The price tag for the ACP just hit $8 billion, and that price tag could be partially passed along to the rest of us, especially since Duke Energy owns 47% of the ACP.
We would prefer to see (by any of the bidders): aggressive energy efficiency investment, competitive solar and storage projects, retirement of coal, and a goal to push off investment in expensive fracked gas generation and pipelines as long as possible (hopefully rendering them moot). A study by Synapse has shown this is possible. At a time of rapid change for the better/cleaner/cheaper, we do not think South Carolina should commit to more pipelines and gas plants.
Both the House and Senate bills preventing approval of onshore infrastructure that supports offshore drilling and seismic testing are languishing on their respective chamber floors. Both bills have significant Upstate bi-partisan support. If you want to thank the co-sponsors and send a nudge to get things moving, you can use the action centers set up by the Conservation Voters of South Carolina. You can customize your message (always a good idea).
RTO and Electricity Market Reform Joint Resolutions were discussed here: the House version (H. 4940) passed on the floor 81-31 (see the vote count here) and has crossed over. The Senate version (S. 998) is still in committee but could be replaced by the House bill.
The notorious Plastics "Ban Ban" bill S. 394 (discussed here) is on the contested calendar on the Senate floor, where we hope it will stay. At the federal level, the Break Free From Plastic Pollution Act of 2020 was filed in Congress. Read more about that here.
Senator Sheheen's S. 1024, the South Carolina Thirty-By-Thirty Conservation Act, now has a House companion H. 5125 with significant Upstate support! Thank you to Representatives Gary Clary, Max Hyde, Mark Willis, Jason Elliott, and Bobby Cox for signing on. Senator Mike Gambrell has signed on to support the Senate bill. Read more about that bill here.
We did get some great budget news this week. South Carolina had its largest budget surplus in history in 2019, and as a result the 2020-2021 revenue estimate has been increased by another $25 million. The Legislature will have an extra $840million in recurring revenue and more than $1 billion (with a b) in non-recurring funds to allocate this spring. It sounds like a good time to fully fund the State Water Plan and to increase the SC Conservation Bank budget!
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Until next week!
Energy and State Policy Director