SCE&G’s move to natural gas could soak customers, just like nuclear plants did, critics say

SCE&G customers should pay attention to the utility’s increasing interest in natural gas because reliance on that fuel could result in higher power bills.

That was the message Tuesday from environmentalists and their consultant, who cautioned the state Public Service Commission against allowing SCE&G, burned by the $9 billion V.C. Summer debacle, to rush wholesale to natural gas.

SCE&G, the largest subsidiary of Cayce-based SCANA, should be careful about using natural gas as the main replacement for power that it was counting on from the now-abandoned nuclear power expansion project, according to the S.C. Coastal Conservation League and the Southern Environmental Law Center.

While natural gas prices are low now, a study by the Greenlink consulting firm predicts they could rise by up to 67 percent in the next 40 years, in part, because production fields will be depleted.

“We are looking to avoid the next big risk,” said Eddy Moore, energy and climate director for the Conservation League.

Using other forms of energy, including solar power, would better protect SCE&G customers from higher rates, Moore and Law Center officials said after Tuesday’s PSC meeting. Making energy use more efficient also could save money – and energy, they said.

Natural gas “is not an obvious answer, and it’s not necessarily the cheapest” way to replace the V.C. Summer nuclear project’s lost capacity, said Blan Holman, an attorney for the Law Center.

SCE&G has announced plans to buy a natural gas plant in Calhoun County to offset the power void left by its failure to complete twin nuclear reactors, under construction northwest of Columbia. SCE&G says shareholders of SCANA, the utility’s parent corporation, will pay about $180 million for a nine-year-old, 540-megawatt natural gas plant in Calhoun County.

Utility officials said Tuesday that SCE&G hopes to finalize a purchase agreement in the next few months and obtain “regulatory approval’’ for the acquisition in 2018. The PSC generally has to approve such acquisitions.

Asked if rising natural gas prices would cause rate increases for customers, SCE&G spokeswoman Rhonda O’Banion said the company passes through natural gas costs to ratepayers, like any other fuel. In an email Tuesday night, O’Banion defended the company’s plan to acquire the natural gas plant.

“The addition of a 540-megawatt natural gas plant to SCE&G’s system would replace more than 40 percent of the projected power that was to be provided to SCE&G from the nuclear construction project at V.C. Summer,’’ O’Banion’s email said. “Further, the facility is in our service territory and is the same model as our other five combined-cycle natural gas plants. The purchase also removes the market risk of purchased power.’’

Her email said the company’s plan to offset the V.C. Summer failure is diversified and includes solar power.

Although Law Center officials did not directly address whether SCE&G should buy the Calhoun plant, they said later that there is no rush. SCE&G has enough capacity to meet customer demands for the next few years while it studies its long-term energy needs, officials said.

A Law Center study indicates SCE&G could save a minimum of $600 million by relying less on natural gas and more on energy efficiency programs, as well as solar power. Efficiency programs range from providing low-cost, energy efficient light bulbs to better insulation in homes. SCE&G has some programs, but environmentalists said the programs need improvement.

“We are saying, ‘Don’t just pitch out one thing and have an announcement and say, “Here’s what we are going to do,” ’ ” Moore said. “We should have everybody involved and look at all the options. Historically, the thing that has been left off the table is bringing in fully the renewable and efficiency options.”

Buddy Atkins, a former PSC member who attended Tuesday’s commission meeting, said increasing energy efficiency isn’t hard to do, noting SCE&G could ramp up its programs to avoid wasting energy.

“That is low-hanging fruit,” he said. “Why not do that? What if we spent $1 billion on high-efficiency (air conditioning) systems?”

Greenlink’s study, presented to the PSC, said SCE&G already has more natural gas capacity than any other form of energy, including nuclear and coal power. About 38 percent of the company’s energy comes from natural gas, compared with 34 percent from coal and 12 percent from nuclear, the study said.

The study said focusing more on energy efficiency and solar power would require less electricity than if SCE&G moves forward with an increased emphasis on natural gas. Also, burning natural gas, like coal, produces carbon dioxide that contributes to climate change.

SCE&G forecasts its customers’ demand for energy will grow by 50 percent over the next 40 years. But growth is expected to be more modest over the next two decades.

Tuesday’s discussion of natural gas followed SCE&G’s July decision to stop building two nuclear reactors in Fairfield County.

The utility shut down that 2,200-megawatt power plant project July 31. SCE&G and its junior partner, the state-owned Santee Cooper utility, spent about $9 billion over a decade on the project before abandoning it in the wake of the bankruptcy of the project’s chief contractor, Westinghouse.

This story was originally published November 28, 2017 at 1:48 PM with the headline "SCE&G’s move to natural gas could soak customers, just like nuclear plants did, critics say."