SCE&G to Retire Six Generators, Use Gas as Bridge Until New Nuclear Generation Comes Online

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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--South Carolina Electric & Gas (SCE&G) (Cayce, South Carolina), a unit of SCANA Corporation (NYSE:SCG) (Cayce), will prematurely close six relatively small coal-fired generating units at three sites by 2018, rather than install pollution-control equipment, to keep the units in compliance with emissions rules from the U.S. Environmental Protection Agency (EPA) (Washington, D.C.). The six affected generators total 730 megawatts (MW) in generating capacity.

One generator, the 90-MW Canadys Unit 1, will be retired by the end of 2012. That unit began operating in April 1962. The other five affected generators will switch to natural gas for a few years before they are all retired by the end of 2018. The utility does not anticipate spending a meaningful amount to convert the five coal-burning generators to natural gas because they were designed to burn either fuel, Eric Boomhower, SCANA's manager of public affairs, told Industrial Info.

SCE&G is building two new generators at the Virgil C. Summer Nuclear Power Station. The new units total about 2,200 MW. By 2018, it expects to have both units operating, thus lessening the need for older, less-efficient coal-fired generation.

"Since announcing our new nuclear project in 2008, we've said that the addition of the two new nuclear units would give us flexibility to look at reducing our reliance on coal and allow us to achieve better fuel diversity in our electric generation portfolio," Kevin Marsh, SCANA's chairman and chief executive, said in a statement. "With the planned retirement of these coal units and the addition of our two new nuclear units, we anticipate that by the end of 2018, roughly one-third of our electric generation will be fueled by nuclear power, one-third by natural gas, and one-third by scrubbed coal-fired plants. These changes will help us meet the increasingly stringent environmental regulations facing our industry and should position SCE&G to be a leader in non-emitting generation well into the future."

SCE&G plans to burn gas at five generators that currently burn coal. The specific units, capacities, switch dates and retirement dates are as follows:

• Urquhart Power Station Unit 3 will begin burning natural gas later this year before being retired by the end of 2018. That 95-MW generator came online in November 1955.
• Canadys Power Station units 2 and 3 will switch to gas by 2015 and be retired by the end of 2017. Unit 2 came online in May 1964 and has a generating capacity of 115 MW. Unit 3, which has 180 MW of generating capacity, began operating in June 1967.
• Silas C. McMeekin Power Station units 1 and 2 will begin burning natural gas by 2015, then be retired by the end of 2018.

SCE&G plans to make no changes to Urquhart units 1, 2, 4 or 5. The plans for the six coal-burning generators were contained in SCE&G's annual integrated resource plan, which was filed May 30 with the South Carolina Public Service Commission (Columbia, South Carolina). About 170 employees at the generating sites would be affected by the changes, SCE&G said. The utility provides electricity to about 668,000 customers in South Carolina.

Since 2008, SCE&G has installed more than $600 million in environmental equipment at its largest coal-fired power plants, significantly reducing emissions of sulfur dioxide, nitrogen oxides and mercury, the company said in a statement. However, SCE&G concluded that installing environmental control equipment at these six older plants "would not, at this time, be a good business decision."

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