Santee Cooper to reduce coal burn by 75,000 tons/year in 2006

Washington (Platts)--25Aug2005

Santee Cooper, a major customer of East Kentucky coal, will displace about
75,000 tons/yr of coal at its 306-MW Jefferies No. 3 coal-fired unit in
Berkeley County, S.C., when it begins burning wood in July.

However, construction continues on two new coal-fired units at its Cross plant
in the same county. An arrangement made public Wednesday with South Carolina
Electric & Gas may include even more coal-fired generation, spokeswoman Laura
Varn told Platts Coal Trader Wednesday.

"The bottom line is, the state is growing at a phenomenal rate, especially in
those coastal areas that we directly serve," Varn said, so both utilities need
new baseload generation by 2013-2015. "Coal is still very much on the table,"
she said, but both utilities are looking at all options. This would be in
addition to the two new Cross units, set for completion in 2007 and 2009.
Those two units will add a total of 1,600 MW of coal-fired capacity to a plant
that already has two coal-fired units of 540 MW and 560 MW.

"It's going to take us several years" to determine fuel options, sites and
other details, she said. "We're just beginning to analyze it."

The evaluation process for the proposed generating capacity "will involve
consideration of various types of baseload generation, including natural
gas-fired plants, coal-fired plants and nuclear plants," Santee and SCE&G said
in the joint announcement.

As for wood being burned at Cross No. 3, Varn said that Santee expects the
project to displace 10% of the unit's annual 750,000-ton coal burn and save
the utility about $1.4-mil/yr. Santee will obtain a variety of local woods
through the US Forest Service for on-site chipping and burning. The utility
will install about $4.3-mil worth of equipment at the Cross unit to convert it
to partially wood-fired capabilities.

Cross's coal supplies come from eastern Kentucky and western Pennsylvania
under long-term contracts and spot purchases.

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