EPA PUBLIC MEETING, ATLANTA 

PROPOSED CO2 EXISTING SOURCE RULE 

JULY 29, 2014 

SANTEE COOPER STATEMENT 

Santee Cooper 

• Good afternoon. I am Elizabeth Warner, Corporate Secretary and Vice President of Legal 

Services for Santee Cooper, headquartered in Moncks Corner, South Carolina. 

• Santee Cooper is South Carolina's state-owned electric and water utility and the state's largest 

power producer, supplying electricity that powers more than 2 million South Carolinians in all 46 

counties of the state. We serve retail customers, industrial customers and have a wholesale 

division that serves the state's electric cooperatives and several municipalities. 

• As a public power entity with no shareholders, Santee Cooper works to provide affordable, 

environmentally responsible and reliable electricity that promotes economic development. 

• Santee Cooper will submit additional comments in writing that detail, among other points, 

concerns about EPA's legal authority to regulate CO2 with this proposed rule. I will focus my 

remarks on South Carolina's unique situation, and especially our concerns with the way this plan 

treats nuclear units under construction. 

Santee Cooper CO2 Reductions 

• Years ago, Santee Cooper and other South Carolina utilities began planning for 

strategic reductions in CO2 emissions. 

• Santee Cooper wanted a measured approach, one that balances environmental 

stewardship, reliability and costs. 

• We have had many successes in this effort. 

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We are running our fossil plants at maximum efficiency. 

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We have increased our use of natural gas generation. 

We have closed 4 older coal fired units — about 10 percent of our 

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generation. 

We were the first utility to generate and deliver electricity from renewable 

resources in South Carolina, and we maintain the largest portfolio today. 

Based on the resource mix for our state, the portfolio includes landfill gas, 

biomass, solar and a little wind. 
■ We have rebates and other incentives for customers to make their homes 

and businesses energy efficient, with an ambitious 2020 target we are on 

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track to meet. 

In partnership with South Carolina Electric & Gas, we are building two of 

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the first new nuclear units in the country. 

Santee Cooper has already cut our CO2 emissions by 23 percent since 2005. With 

all of the above initiatives appropriately accounted for, Santee Cooper expects to cut 

our CO2 emissions a total 44 percent by 2029, compared to 2005. 

■ These initiatives are costly, but Santee Cooper has saved customers and the state 

money by being proactive in launching them, rather than waiting until we were 

forced to act. Now, it appears our early actions are being discounted and South 

Carolinians will be asked to spend far more money to achieve a target stricter than 

that asked of 47 other states. 

The EPA Proposed CO2 Existing Source Rule 

■ South Carolina's 2012 emission rate, taking into account all current generating 

units that can be used to meet the goal, is 1587 lbs. CO2 per MWh — that is about 

the midpoint among the states. The draft rule sets a final 2030 target for South 

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Carolina of 772 lbs. CO2 per MWh. 

That equates to a 51% reduction, the 3rdmost significant percent reduction from 

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2012 levels among all 50 states. 

Other states with similar current emission rates are treated much differently. For 

example, Iowa emitted 1,552 lb CO2 per MWh and faces a target emissions 

reduction of just 16%. Again — South Carolina's reduction would be 51 percent 

and Iowa's, 16 percent. 

Challenges 

• This draft CO2 rule comes in the midst of a tremendous series of new-industry 

announcements bringing thousands of new jobs and capital investment to South Carolina, 

a welcome rebound after a tough recession and post-recession period here. Santee 

Cooper is always focused on keeping power costs affordable for all of our customers, and 

our industrial power costs are 29 percent below the national average. Electricity is often 

one of the largest expenses for industry, and the extreme efforts required to meet the 

proposed EPA target will certainly drive up costs to power those plants. 

• The draft rule makes many assumptions about electricity generation in South Carolina. 

We want to make sure EPA understands our state's specific challenges. 
• EPA has proposed building blocks to help states achieve lower emissions, things like 

increasing nuclear generation, natural gas, renewables and energy efficiency. However, 

many of the assumptions for these "building blocks" are not a good fit for South 

Carolina. 

o Most critical, in terms of costs, is the way this proposal treats new nuclear already 

under construction. 

■ Our new nuclear project with South Carolina Electric and Gas will cost 

about 10 billion dollars, and South Carolina electric consumers are already 

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paying into the project. 

By considering these under-construction units as if they are already built, 

and in doing so setting our goal more restrictively, you are punishing 

South Carolina for being proactive in its CO2 reductions and investing 

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early in this project. 

The end result is consumers in South Carolina will have to pay again for 

high cost CO2 reductions from renewables and other measures that are not 

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cost effective for our state. 

EPA should not count under construction nuclear as part of the state 

target, but should allow it to be used for compliance with the revised 

target. This approach would give South Carolina full credit for its efforts 

and our customers would not bear the burden of paying for additional 

reductions. 

o EPA advocates more use of natural gas. South Carolina, especially the eastern 

half, has no infrastructure to add natural gas generation, since the nearest pipeline 

runs along our western border. Santee Cooper is already running our gas units as 

much as we can. In fact, our two largest units ranked No. 1 and No. 4 on your list 

of the nation's natural gas units and how much they ran in 2013. 

o There are differences between South Carolina and other states in the amount and 

type of renewables available for electricity production, and it is unfair to hold the 

Southeast region to the target of the one state here — North Carolina - that has an 

RPS. We do not have the resources to meet a renewable requirement of 10 percent 

by 2030. 

o An estimated 36% of all of South Carolina's retail sales are to industrial 

customers. It is not reasonable to assume that large increases in energy efficiency 

are available to this customer class. Therefore, achieving a 10% increase in 

energy efficiency savings in South Carolina is not a feasible goal. 

• EPA should recognize South Carolina's particular situation with regard to opportunities 

for CO2 reduction. The initiatives we have already proactively undertaken will reduce 

CO2 emissions by 44 percent for Santee Cooper — that is far more than the 30 percent 

target EPA has set for the nation. When other utilities are counted in the state, we are still 
far ahead of your national average. To ask us to do more simply because we got a head 

start is patently unfair to the people of South Carolina, who bear the ultimate burden for 

these measures. 

Contact Information 

Elizabeth Henry Warner 

Vice President, Legal Services and Corporate Secretary 

Santee Cooper 

One Riverwood Drive (M603) 

Moncks Corner, SC 29461 

Ph: (843) 761-7044 

Email: ehwarner@santeecooper.com