Tuesday, January 8, 2008

New coal power plant won't help Pee Dee's economy

And Santee Cooper's customers could get stuck with high bills

Published: Saturday, January 5, 2008 - 2:00 am
The Greenville News

By Nancy Cave

Economic development and jobs are needed for the people of the Pee Dee. Unfortunately, a new coal plant will not make good on promises to deliver prosperity to this region.

Recently, Santee Cooper touted the release of an economic study of the utility's proposed billion-dollar coal plant. Conducted by Francis Marion University economists, the report highlighted the claim that the coal-burner would create more than 9,000 jobs.

Is this claim true?

Santee Cooper's own assessment of the project, completed a little more than a year ago, stated that construction of the plant will create only about 1,000 temporary construction jobs, at least 10 percent of which are expected to be sourced outside of the Pee Dee region. The utility estimated only 100 full-time jobs, at least 20 percent of which will be sourced outside of the Pee Dee.

Why the discrepancy in the job numbers? Surprisingly, the answer comes from Santee Cooper's own press release, in which it acknowledges collapsing the timetable into one year; the result multiplies the reported impacts by as much as a factor of five.

Suppose you started a new business this year and you hired five people. If over the next five years you kept these same five people on your staff and didn't hire any new employees, how many people have you employed? If you are honest, you would say five. Based on the method used in the economic study on Santee Cooper, on the other hand, you could insist you have employed 25 people!

Why must Santee Cooper resort to this kind of accounting to justify the construction of its proposed coal plant?

The truth is that this is not a project that will revitalize a region. For a billion-dollar investment, we ought to do better than 80 long-term jobs for the Pee Dee.

There are at least three reasons why Santee Cooper's coal plant will not deliver significant economic benefits to the Pee Dee or the state.

First, a true accounting of the coal plant would show that its costs outweigh its benefits. Second, rather than increasing the state's prosperity, this coal plant would merely transfer wealth across regions; and third, by building the plant, South Carolina misses the opportunity to invest in projects that would do more for the wealth of the Pee Dee and the state.

Any consideration of the benefits of the proposed coal plant is only half the story. Costs must be considered too. As it turns out, the costs of building a coal plant are high. According to a study conducted by the government of Ontario, when the adverse health and environmental impacts of coal are considered, a coal plant's cost can increase by as much as five times, making nearly any other means of generating electricity a better idea.

Another cost that should not be ignored is the cost of carbon. Polluters do not have to pay for their carbon dioxide emissions today, but most observers agree that the federal government will require them to very soon. When that happens, it could increase the cost of Santee Cooper's coal plant by anywhere from $20 million to $40 million annually, according to the utility's own estimates.

Guess who will get stuck with these steep bills? The answer is the residents of the Pee Dee and Santee Cooper's own electricity customers. Residents of the Pee Dee will pay in the form of higher health-care bills and reduced land values, for example, while Santee Cooper's customers will face rising bills.

Indeed, instead of generating economic benefits, a new coal plant would really just move money from the pockets of some South Carolinians to others. Excluding the cost of carbon, double-digit rate increases have been projected in other states where coal is being considered. This state needs real economic development, not a transfer of wealth.

Finally, committing to a coal plant skips over alternatives that could both meet our need for power and provide greater economic growth. For instance, a recent study conducted by the Renewable Energy Policy Project, in partnership with United Steelworkers, indicated that a 10-year effort to generate electricity from renewable resources could create more than 20,000 long-term manufacturing jobs in our state, nearly 2,000 of which would be sourced in the Pee Dee.

So let's not pretend a coal plant is a tool for economic development -- it's a dirty way of generating electricity, and not much else.

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