Santee Cooper CEO Mark Bonsall plans to eliminate utility’s coal-fired power plants
Santee Cooper plans to shut down one of its two remaining coal-fired power stations in the next decade and cut about 200 jobs as the state-owned utility moves to eliminate coal as an energy source altogether, company officials said this week.
The company’s Winyah generating station, established near Georgetown in the mid 1970s, will be closed in two phases beginning with the closure of two coal units in 2023. The other two would be closed in 2027, the utility said Wednesday.
Many workers whose jobs would be cut will be offered other positions at Santee Cooper, which will rely increasingly on solar power and energy efficiency to help transition the company away from coal, said Mark Bonsall, the company’s new chief executive. The company informed Winyah plant workers during a meeting at the plant Wednesday morning.
The company could not guarantee that all workers would be retained, but company spokeswoman Mollie Gore said the plan is to make the transition as smooth as possible. The Santee Cooper board and a board that represents the state’s electric cooperatives must approve Bonsall’s plan to eliminate coal plants. The Santee Cooper board meets next week.
“Nothing is happening tomorrow or this year,’’ Gore said, noting that Santee Cooper wants to give time for employees to decide on retirement or to take other jobs within the company.
Bonsall’s plan to eliminate coal-fired generation comes at a time of uncertainty about the power company’s future. Gov. Henry McMaster is pushing to sell Santee Cooper to help pay off the debt the company incurred from a nuclear construction project failure that soaked ratepayers for billions of dollars. Santee Cooper and partner SCE&G quit the nuclear project two years ago.
It was unclear what impact plans to eliminate coal would have in swaying legislators to keep the company as a state-owned utility or sell it to an investor-owned energy company. No decision would be made until next year, at the earliest.
State Rep. Micah Caskey, R-Lexington, said he understands the need for Santee Cooper to transition away from coal, a polluting form of energy that has taken a toll on the environment across South Carolina and the nation.
But Caskey said he worries about eliminating all coal from Santee Cooper’s energy mix, which he said should come from a variety of sources.. Caskey also said he’s skeptical the company can find other jobs for many of the displaced coal workers, particularly if it wants to save money.
“How are you going to cut costs and keep everybody? I don’t know how that works,’’ he said. “We’ll see how it shakes out. ‘’
Company executives declined to say when Santee Cooper’s other coal plant, located at Cross on Lake Moultrie, would be shut down, but Gore and Bonsall said the long-term plan is to shutter that one, as well. Santee Cooper chose to shut down the Winyah station first because it is older and less efficient than the one at Cross, Gore said.
The use of coal, a traditional source of energy production, has been under the gun because of the impacts coal has had on the country’s air and water.
Coal plants release mercury, which settles into rivers and pollutes fish. Most of the rivers and many streams from Columbia to the coast have health advisories against eating more than moderate amounts of certain types of fish. Air pollution from coal plants also makes breathing more difficult for people with lung diseases. In addition, coal-fired power plants release pollution that contributes to global warming.
Under President Obama, the government pushed environmental rules that contributed to the closure of some aging coal-fired power plants. At the same time, natural gas became an affordable alternative to coal. But President Trump has sought to revive coal as an energy source.
Despite Trump’s stance, Bonsall said relying on coal isn’t in his long-term forecast for Santee Cooper.
“It doesn’t make any sense either economically or environmentally,’’ Bonsall said in an interview with The State. “It’s nice to be able to move in directions that are good all the way around.’’
After the Winyah plant is closed, the company will study when to close the other facility.
“Eventually it will all be phased out,’’ Bonsall said.
In addition to an increased emphasis on solar as a power source, the company would rely on natural gas to supply customers, he said. About 46 percent of the company’s energy supply comes from coal, with most of the rest produced by natural gas and nuclear. The use of natural gas has risen dramatically in the past decade at Santee Cooper.
Santee Cooper, a state utility formed in the early 20th century to bring power to rural areas, today provides energy for more than 2 million South Carolina residents either directly or through the state’s electric cooperatives. Customers served directly or indirectly make up nearly half of the state’s population. The company has more than 1,600 employees.
Bonsall, a former executive with the Salt River Project utility in Arizona, has experience working with employees who are affected by coal plant shutdowns. In that state, the Salt River Project and its partners decided in 2017 to close the Navajo Generating Station, a massive coal plant.
According to a report in the Arizona Republic this week, 152 of 433 employees at the Navajo station had taken other jobs with the company since the announcement, while another 36 retired.
Santee Cooper said it received updated figures Wednesday from Salt River, showing that 250 workers from the Navajo station had been provided other jobs with the company. More than 50 workers were waiting for redeployment offers next month, while 65 will retire and 33 had turned down redeployment offers, Santee Cooper said.
The Navajo station will close later this year. The company cited better natural gas prices as a key reason for shuttering the huge coal plant.
If Santee Cooper isn’t sold and follows through on Bonsall’s plan to stop using coal, it would leave only three operating coal plants in South Carolina, all owned by Dominion Energy. Santee Cooper already has closed its coal stations in Conway and Moncks Corner. Duke Energy has shut down both of its coal-fired power plants in South Carolina, one in Anderson County and one in Darlington County.
Dominion, which acquired SCE&G this year, has no plans to retire its remaining three coal plants, including the Wateree power station southeast of Columbia, company spokeswoman Aimee Murray said Tuesday. SCE&G closed a station at Canadys in 2017 and converted two other coal plants to natural gas, she said.
Frank Holleman, a Greenville attorney with the Southern Environmental Law Center, called Bonsall’s stance on coal refreshing at a company that historically defended the use of coal as a key energy source. Holleman’s organization sued successfully to force the cleanup of toxic ash from coal-fired power plants across South Carolina.
“This sounds like a real breath of fresh air for South Carolina government,’’ he said. “This company was going to build a coal plant about 10 years ago.’’
As recently as 2009, Santee Cooper planned to build a major coal-fired power plant near the Great Pee Dee River in Florence County. The company later abandoned those plans in the face of opposition by then-Gov. Mark Sanford, environmentalists, state electric cooperatives and many residents of the area. The company said at the time it needed the energy, even though energy demand would soon begin to flatten out.
Now, Bonsall said the company plans next spring to auction off the equipment from the abandoned $2.2 billion Pee Dee coal project. He said he hopes to recoup $40 million from the sale.
One matter complicating his plan to move away from coal is a contract Santee Cooper struck more than 10 years ago to sell a byproduct from coal plants for use in a type of home construction material. The company has a long-term contract to provide gypsum, a type of material produced in air pollution control equipment. If it closes the last power plant, it would have to acquire gypsum elsewhere to fulfill the contract.
State Sens. Nikki Setzler, D-Lexington, and Larry Grooms, R-Berkeley, said they are generally comfortable with Santee Cooper’s direction. Grooms said moving away from coal is “where most electric utilities in the country are going.’’ Setzler said the company has been historically slow to make necessary changes
“Santee Cooper is doing what should have been done years ago, which is hire somebody who has experience in the industry to be running that place,’’ Setzler said.
Staff Writer Avery G. Wilks contributed to this story.
BEHIND OUR REPORTING
Why did we do this story?
This story offers a snapshot of the growing battles over coastal development at a time of increasing earth temperatures and rising sea levels. Property owners are finding it difficult to protect their oceanfront homes and they are seeking help from the state government. Opponents say those efforts will eventually fail as the ocean creeps higher, and in the meantime, putting rock groins and seawalls on beaches will only worsen shoreline erosion. This story was notable because a judge said property owners at Debordieu could not begin building rock groins on the beach until a legal challenge was concluded. The decision was a victory for environmentalists under a new state law that is supposed to make development easier. But in this case, it did not.
many people believe burning coal has had a profound impact on the nation’s environment. But it’s also important because jobs could be lost when Santee Cooper closes its two remaining plants. The company says it hopes to place workers in other positions, but there are no guarantees.