Dive Brief:
- Dominion Energy South Carolina and Santee Cooper’s proposal to build a $5 billion, 2,180-MW gas-fired power plant was approved by state regulators under an order issued Friday.
- Santee Cooper showed that the planned Canadys project at a retired coal-fired power plant is more cost-effective than other power supply options and provides less ratepayer risk, the South Carolina Public Service Commission said in its written order. The agency approved the project in an oral decision last month.
- However, the Sierra Club, which opposed the project, contends it adds risks for ratepayers — partly because it lacks a cost cap commitment from the utilities. “Requiring utility customers to pay billions of dollars for a power plant several years before it produces electricity, with absolutely zero consumer protections, will make energy inflation worse for struggling South Carolina families and businesses,” Paul Black, senior campaign organizer for Sierra Club’s Beyond Coal Campaign in the Carolinas, said in a statement on Monday.
Dive Insight:
Dominion and Santee Cooper, a public power utility, expect to bring the Canadys project online by mid-2033. When the utilities proposed the project in December, they thought it would cost up to $2.5 billion.
According to a Dominion official, the markets for gas-fired power plant equipment are “extremely tight” due to increased demand, the PSC said in its decision.
Dominion and Santee Cooper will each own half of the project, set to be built about 40 miles from Charleston, South Carolina.
The planned project is driven by rapid load growth in South Carolina, the fastest growing U.S. state, according to Santee Cooper.
To meet that growth, Santee Cooper plans to add 300 MW of battery storage next year, 285 MW of gas-fired generation in 2028 and 1,090 MW from the Canadys project in 2033, according to a mid-March investor presentation. The utility is also moving to add nuclear generation to its power portfolio.
Last year, coal-fired generation made up 51% of Santee Cooper’s installed capacity, followed by gas at 25%. The public power utility expects gas-fired generation will account for 55% of its capacity by 2040, followed by coal at 26%. Santee Cooper owns about 3.6 GW of coal-fired capacity, according to the PSC order.
During the PSC’s review of the utilities’ application for the Canadys project, the Sierra Club said approval of the plan should require Dominion and Santee Cooper to commit to retiring existing coal-fired generating units.
The gas-fired project may facilitate coal-fired retirements, but Santee Cooper, for example, didn’t want to commit to them before it has new replacement generation online, according to the PSC’s decision.
The Sierra Club also said Santee Cooper overstated its need for the project, arguing that its load forecast included speculative data center projects.
The PSC rejected the Sierra Club’s call to cap the project’s cost at $5 billion. Dominion argued that the prudency of the project’s cost would be reviewed during a future rate case.
