South Carolina Utility Santee Cooper Agrees to Clean Air Settlement
By Kyle Stock, The Post and Courier, Charleston, S.C. -- Mar. 17
Santee Cooper, one of the country's largest state-owned utilities, will install $100 million in pollution-control devices and pay a $2 million penalty to settle what the Department of Justice viewed as violations of the Clean Air Act.
The plants are close to the Cape Romain National Wildlife Refuge.
During an inspection last May, the state Department of Health and
Environmental Control found Santee Cooper crews had illegally started
construction of a new, long-planned coal-burning unit at its Cross facility. The
utility had applied for permits to build the site more than a year earlier, but
DHEC hadn't OK'd the project yet.
The agreement filed Tuesday was the product of months of negotiations between
Santee Cooper, the Department of Justice, EPA and DHEC.
The pollution controls will be in place by 2009 and are expected to cut
nitrogen oxide emissions by 70 percent and sulfur dioxide emissions by half. A
total of about 67,000 tons of harmful pollutants are expected to be eliminated
annually. Both pollutants are significant contributors to acid rain, smog and
childhood asthma. The vast majority of Santee Cooper's generating capacity --
about 75 percent -- is generated by burning coal, a relatively dirty fuel
source.
The $100 million price tag for the improvements will be tacked onto $1.4
billion the utility plans to spend on capital improvements over the next few
years. Santee Cooper will cover most of that sum with bond issues and said no
rate increases will be necessary.
As part of the settlement, a $1.2 million fine will be levied by the state
and a $700,000 penalty will be exacted by DHEC. It is one of the largest
penalties imposed by the agency in years.
The state and Berkeley County will each get $350,000 of that sum. Santee
Cooper also will spend $4.5 million to finance pro-environment initiatives,
including $1.25 million for land conservation in South Carolina and $1 million
to develop more energy-efficient technologies.
"What this does is buy flexibility and certainty," John West,
executive vice president and chief legal officer at Santee Cooper, said of the
settlement.
Environmental groups said they were "cautiously optimistic" about
the settlement.
"Any time a company settles with EPA towards compliance, that's a good
thing; we think compliance is inevitable," said Ann Weeks, litigation
director with the Clean Air Task Force, a Boston-based nonprofit. "We hope
that some of the bigger players that have outstanding litigation will take note
of the fact that it seems as though the EPA and DOJ are continuing to pursue
this."
In 1999, under the Clinton administration, the EPA started enforcing what's
referred to as New Source Review, regulations that require coal-burning power
plants to apply for new permits if they undergo any upgrades beyond
"routine maintenance."
The government, joined by a number of states, fired a volley of lawsuits
charging utilities with not upgrading pollution controls.
Most of the suits, which include actions against Charlotte-based Duke Energy
Corp. and Atlanta-based Southern Co., are still open.
Santee Cooper wasn't targeted in that sweep, but it did join dozens of other
utilities on a list of companies scrutinized by the EPA.
The Bush administration moved to loosen enforcement of the EPA air
regulations, arguing that removing costly regulations would make plants more
efficient and therefore cleaner.
The proposed changes were met with criticism from environmental groups and
lawsuits from a number of states.
Santee Cooper, as a large utility aggressively expanding its coal-burning
capacity, had every reason to believe that a lawsuit would be heading its way by
the November presidential elections.
However, its executives maintain that the company never violated the Clean
Air Act and is acting preemptively by brokering the settlement in expectation
that emission regulations will get more restrictive -- not less -- in the
future.
"We can sit here and hedge our bets, or we can grab the bull by the
horns and get this thing done," said West.
The utility will add new sulfur dioxide scrubbers to two units at the Winyah
plant in Georgetown.
It will also upgrade existing scrubbers at the two other Winyah turbines and
two generators at its Cross power plant.
The Winyah and Cross facilities comprise almost half of Santee Cooper's
generating capacity.
The upgrades give Santee Cooper a measure of confidence as it moves forward
with an expansion of its Cross coal-burning plant that will boost its generating
capacity by 20 percent.
The utility ranked 34th in the nation in terms of toxic chemical air
emissions, releasing about 4.3 million pounds of airborne toxic chemicals in
2001, mostly from its Jefferies and Winyah plants, according to the nonprofit
environmental group Clear the Air.
South Carolina Electric & Gas, the state's other big utility, was 26th on
the Clear the Air list, with about double the toxic emissions.
"Overall, this is a good sign," said Jill Johnson, Southeast field
director for Public Interest Research Group, a network of consumer advocacy
groups. "The Winyah power plant is definitely one of the dirtier plants in
the country, so it's exciting to see that they're going to clean up that
facility."
Five of the utility's coal-burning units are scrubbed, while about 93 percent
of the coal-burning plants in the Carolinas and Georgia don't have sulfur
dioxide scrubbers.
South Carolina ranked 14th on a list of the most air-polluting states
released in December by Clear the Air. North Carolina topped that list.
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