Dependable Power. Dependable People.

The mission of Santee Cooper is to be the state’s leading resource

for improving the quality of life for the people of South Carolina.

Santee Cooper

iscustomer-focused

with commitments

to Low-Cost / Dependable Power

Dependable People

Quality Service

Environmental Stewardship

Santee Cooper Generation

Jefferies Hydro 1, 2, 3, 4 & 6 - 1942 - 128 MW

Moncks Corner

Jefferies Steam 1 & 2 - Oil - 1954 - 92 MW

Moncks Corner

Jefferies Steam 3 & 4 - Coal - 1970 - 306 MW

Santee Cooper Generation

Winyah Steam 1 - Coal - 1975 - 295 MW

Georgetown

Winyah Steam 2 - Coal - 1977 - 295 MW

Winyah Steam 3 - Coal - 1980 - 295 MW

Winyah Steam 4 - Coal - 1981 - 270 MW

Santee Cooper Generation

Grainger Steam 1& 2 - Coal - 1966 - 170 MW

Conway

Santee Cooper Generation

Cross Steam 2 - Coal - 1983 - 540 MW

Cross

Cross Steam 1 - Coal - 1995 - 620 MW

Cross Steam 3 - Coal - 2007* - 580 MW * Projected

Santee Cooper Generation

Cross Steam 4 - Coal - 2009* - 580 MW

Schedule for Additional Generating Capability

Santee Cooper Generation

Cross Steam 3 - Coal - 2007* - 600 MW Class

Cross Steam 4 - Coal - 2009* - 600 MW Class

Pollution Control Technology

SO2

NOX

7 coal-fired units scrubbed for SO2 removal in GA, SC, & NC

5 of 7 are Santee Cooper units

Santee Cooper has committed to:

● Install SCR Technology on

Cross & Winyah Units and Low-NOX Burners on others

● ● Spend $280 M to comply with NOX SIP Call Requirements

NSR Settlement

JULY 2000 SANTEE COOPER, LIKE MANY OTHER COAL FIRED UTILITIES, RECEIVED A SECTION 114 REQUEST FOR

INFORMATION REGARDING OPERATION AND MAINTENANCE OF ITS COAL FIRED UNITS FROM THE MID-

1970’S TO THE PRESENT

NSR Settlement

2000-2002 TIME FRAME

-PROVIDED A LARGE NUMBER OF DOCUMENTS IN RESPONSE TO THE 114 REQUEST

- BEGAN DISCUSSIONS WITH EPA REGARDING A POSSIBLE RESOLUTION THAT WOULD BE CONSISTENT WITH SANTEE COOPER’S BUSINESS PLAN

-NO RESOLUTION WAS REACHED DURING TIME FRAME

-EPA’S ENFORCEMENT POLICIES BEGAN SHIFTING

NSR Settlement

2003-2004 TIME FRAME

-SANTEE COOPER BEGAN PERMITTING PROCESS WITH EPA AND DHEC FOR CROSS UNITS 3 AND 4

-A “BEGIN CONSTRUCTION” ISSUE AROSE WITH SOME CONSTRUCTION ACTIVITIES AT THE PLANT SITE

-DHEC, EPA CONTACTED SANTEE COOPER ABOUT POTENTIAL ENFORCEMENT ACTIVITY WITH REGARD TO NSR AND “BEGIN CONSTRUCTION” ISSUES

-SETTLEMENT DISCUSSIONS RESUMED

NSR Settlement

MARCH 2004 SANTEE COOPER REACHED A SETTLEMENT WITH DHEC, EPA AND DOJ WHICH RESOLVES PAST AND FUTURE NSR LIABILITY, RESOLVES “BEGIN CONSTRUCTION” ISSUES AND IS CONSISTENT WITH ITS BUSINESS PLAN FOR FUTURE POLLUTION CONTROL

CONSENT DECREE IS ENTERED JUNE 2004

NSR Settlement

● Certainty

● Operational Flexibility

● Opportunity to move forward with projects

Agreement with EPA & DHEC provides:

NSR Settlement

● Pollution Controls

● Civil Penalties

● Environmental Projects

THREE MAJOR COMPONENTS

NSR Settlement

Santee Cooper has agreed to spend approximately $140 M on additional pollution controls:

● Scrubbers and Scrubber Upgrades for SO2 Reduction

● Year-Round Operation of SCRs for NOX Reduction

● Additional PM Controls

NSR Settlement

Costs of Settlement Compare Favorably to Future Control obligations

Largest Costs

● 2008 - 50M for Scrubbers at Winyah 1 and 2

● 2012 – Possible Costs of 50 M for Scrubber Upgrades at Winyah 3 and 4 and PM Upgrades at Jefferies and Grainger

NSR Settlement

Benefits of Additional Controls

● SO2 reductions allow significant savings in purchase of SO2 credits

● Additional controls allow fuel flexibility

● Pollutant reductions allow for permitting through netting process

NSR Settlement

Results of Additional Controls

● SO2 Reductions of 50% (measured in lbs. per unit of electricity generated)

● NOX Reductions of 70%

● State of the Art Controls on nearly 90% of Santee Cooper’s coal-fired generation

NSR Settlement

- Civil Penalties Totaling 2 Million Dollars

● 1.3 Million to EPA

● .7 Million to DHEC

-Environmental Projects Totaling 4.5 Million

Santee Cooper has agreed to:

NSR Settlement

● Environmentally Beneficial Projects

- Land Conservation Project

- Energy Efficient Technologies Project

- Demand-Side Management Project

- Clean-Diesel School Bus Retrofit Project

- Environmental Management System

NSR Settlement

CHALLENGES OF SETTLEMENT

-COMPLICATED CONSENT DECREE SUBJECT TO INTERPRETATION

-LOTS OF RECORDKEEPING REQUIREMENTS

-LOTS OF DEADLINES

-LESS MARGIN FOR ERROR IN OPERATION

NSR Settlement

BENEFITS OF SETTLEMENT

CLEAR PATH TO PERMITTING CROSS 3 AND 4

● 1100 Megawatts of New Coal Fired Generation – Permit Unopposed and Un-appealed

● 1.4 Billion Dollars of New Construction Underway Since January 2004

NSR Settlement

BENEFITS OF SETTLEMENT

-Avoided Cost and Risk of High Profile Environmental Suit

-Resolved Potential NSR Liability within Framework of Business Plan

-Maintained Operational Flexibility

-Maintained Support of Environmental Community

NSR Settlement

DOJ SAID ABOUT SETTLEMENT:

“Today’s settlement again demonstrates this Administration’s commitment to secure major pollution reductions from coal fired plants. The citizens of South Carolina will benefit from significant improvements in air quality. Santee Cooper deserves credit for stepping up to the plate and resolving this matter in a way that promotes the public interest.”

NSR Settlement

EPA SAID ABOUT SETTLEMENT:

“The people of South Carolina will soon benefit from the responsible actions of Santee Cooper in cleaning up the emissions from their facilities”

NSR Settlement

Light Reading

-Consent Decree can be downloaded at www.epa.gov/compliance/resources/decrees

Dependable Power. Dependable People.