Monday, October 15, 2007

Fortune 500?


A new report from Standard & Poor's says many public power and electric cooperatives utilities are still investing in coal-fired plants, despite rising efforts to curtail operations of existing ones and prevent new facilities from being built.

Although the industry is designing new plants that limit emissions, the report says many industry experts believe utilities will not effectively control carbon emissions for another 10 to 20 years because of technological and economic constraints.

"We recognize that coal-fired assets meet the pressing need for economical baseload capacity, particularly after the long hiatus since utilities last added large quantities of this type capacity to their generation fleets," said S&P credit analyst David Bodek. "Yet, our evaluations must also recognize the financial impact that carbon emission constraints might have on coal operators in coming years."

The report said financial margins for utilities could deteriorate as additional expenses are incurred, and credit quality would suffer. These costs could result from financing new capacity additions, emissions controls for existing facilities, fuel switching to natural gas or renewable resources, or compliance with regulatory directives, such as carbon taxes or cap-and-trade systems.
Despite warnings from Wall Street, Santee Cooper continues to plunge headlong into a massive coal plant project. They've recently been aided an abetted by the Metro Charleston Chamber of Commmerce, which endorsed the project recently. One can only assume that the MCCC believes "deteriorating financial margins" for the state's electric utility are good for regional economic development. Or maybe, they didn't even do the research before making their endorsement.
“Low cost and reliable power are listed consistently as top reasons by companies looking to relocate or expand,” read a statement from Charles Van Rysselberge, president and CEO of the chamber.

The $1 million coal-fired generation facility is expected to add 1,400 jobs during construction, and create 100 full-time jobs with an average salary of $50,000 once completed, the release said.
Once again, one has to wonder if SC's pro-coal business community (including Santee Cooper and the MCCC) have done their homework. Standard and Poor's doesn't seem to think electricity from coal is going to stay low cost very long. As for jobs, what sounds better? 1,400 temporary jobs; 100 permanent jobs from an automated coal plant, with no guarantee regarding how many of these jobs will be sourced locally, or the kinds of numbers suggested by all the recent studies on the amounts of local jobs created by clean energy technologies (e.g. tens of thousands).

Again, it makes one wonder: when folks speak of "economic development" -- whose are they talking about?

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