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Industry News

SCE&G Announces Plans to Retire Coal-fired Generating Units

LCG, June 1, 2012--South Carolina Electric & Gas (SCE&G) released plans Wednesday to retire up to six coal-fired electric generating units at three sites by the end of 2018. Prior to retirement, SCE&G plans to convert the units from coal to natural gas. The retirements are driven largely by the United States Environmental Protection Agency (EPA) and new regulations, such as the utility mercury and air toxics standards (MATS).

The retirement plans are part of SCE&G's annual Integrated Resource Plan (IRP), which was filed Wednesday with the Public Service Commission of South Carolina. SCE&G outlined in its IRP the following steps: (i) retirement of Unit 1 at the Canadys Plant near Walterboro by the end of 2012; (ii) switching Unit 3 at the Urquhart Plant near Aiken from coal to entirely natural gas by the end of 2012; (iii) switching of Units 1 and 2 at the McMeekin Plant near Irmo and Units 2 and 3 at the Canadys Plant from coal to entirely natural gas by 2015.

After converting the coal units to natural gas, SC&EG plans to retire (i) the remaining two units at Canadys by the end of 2017; (ii) Units 1 and 2 at the McMeekin Plant by the end of 2018; and (iii) Unit 3 at Urquhart by the end of 2018. Thus the converted units would only operate on natural gas for roughly five years.

In response to the EPA's growing emission regulations, SCE&G has installed over $600 million in environmental controls at its largest coal-fired power plants since 2008. The units now targeted for retirement are SCE&G's oldest and smallest coal-fired units, and SCE&G has determined that the further investment in environmental controls at these older plants would not be prudent.

The Chairman and CEO of SCE&G's parent company, SCANA Corp. stated, "Since announcing our new nuclear project in 2008, we've said that the addition of the two new nuclear units would give us flexibility to look at reducing our reliance on coal and allow us to achieve better fuel diversity in our electric generation portfolio. With the planned retirement of these coal units and the addition of our two new nuclear units, we anticipate that by the end of 2018 roughly one-third of our electric generation will be fueled by nuclear power, one-third by natural gas, and one-third by scrubbed coal-fired plants. These changes will help us meet the increasingly stringent environmental regulations facing our industry and should position SCE&G to be a leader in non-emitting generation well into the future."
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