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1994 (Analysis) r} 1 r ' ,; l' rl SOUTH CAROLINA PUBLIC SERVICE AUTHORITY fl r l ( } l I 1994 INTEGRATED RESOURCE n PLANNING ANALYSIS u f1 VOLUME I l1 t.: ~psanteeCooper ·, l ; L {. \ January 1995 Metzler & Associates SOUTH CAROLINA PUBLIC SERVICE AUTHORITY 1994 INTEGRATED RESOURCE PLANNING ANALYSIS TABLE OF CONTENTS VOLUME I Chapter Title Page I. INTRODUCTION AND EXECUTIVE SUMMARY 1 II. INTEGRATED RESOURCE PLANNING PROCESS 27 A. Reviewing Key 1994 Study Assumptions 27 B. Reviewing the 1994 Load Forecast 31 C. Demand-side Management Options Analysis 33 D. Supply-side Options Analysis 36 E. Environmental Compliance Planning 37 F. Resource Optimization 38 G. Scenario and Sensitivity Analyses 40 H. Selecting the IRP Expansion Plan 41 I. Near-term Action Plan 42 III. DEMAND AND ENERGY FORECAST 43 A. Peak Demand Forecast 43 B. Energy Forecast 51 IV. DEMAND-SIDE MANAGEMENT 57 A. Demand-side Management Planning Process 57 B. Selection of DSM Programs 72 C. Review of Existing DSM Programs 96 D. Retail versus Wholesale Program Economics 100 E. DSM Program Screening Summary 103 V. SUPPLY-SIDE RESOURCE OPTIONS 111 A. Supply-side Resource Identification 111 B. Supply-side Options Definition and Screening 113 ' C. Results of Supply-side Options Definition 118 and Screening i D. Impact of ALUMAX on Resource Requirements 125 E. Impact of High and Low Load Forecasts 127 F. Summary of Optimized Supply-side Plans 130 SOUTH CAROLINA PUBLIC SERVICE AUTHORITY 1994 INTEGRATED RESOURCE PLANNING ANALYSIS TABLE OF CONTENTS (cont'd.) VOLUME I (cont'd.) Chapter Title Page VI. COMPLIANCE WITH THE CLEAN AIR ACT 133 AMENDMENTS OF 1990 A. Provisions of the CAAA 133 B. Projected SO2 Emissions 137 C. Identification and Evaluation of SO2 Emission 141 Compliance Plan Alternatives D. NOx Emissions Estimates for the Supply-side Plans 148 E. Carbon Tax Impacts 151 VII. IRP OPTIMIZATION AND DEFINITION OF 153 EXPANSION PLANS A. Santee Cooper's Power Generation System and 153 Need for Additional Resources B. Resource Integration 155 C. Environmental Impact of Expansion Plans 169 D. Alternative Supply-side Plans 170 VIII. SENSITIVITY ANALYSIS 173 A. High and Low Load Growth Sensitivity 175 B. Fuel Price Sensitivities 176 C. High/Low Capital Costs 178 D. Summary 180 E. Special Studies 181 IX. NEAR-TERM ACTION PLAN 189 A. Timing and Type of New Generation Resources 189 B. Compliance with the Clean Air Act Amendments 194 of 1990 (CAAA) C. Further Expansion of Potential Demand-side 198 Management Programs D. Summary 207 ii SOUTH CAROLINA PUBLIC SERVICE AUTHORITY 1994 INTEGRATED RESOURCE PLANNING ANALYSIS TABLE OF CONTENTS (cont'd.} VOLUME I (cont'd.) Chapter APPENDICES A 1994 Integrated Resource Plan Description of A-1 Generation Technologies B. DSM Programs B-1 C. Summary of Proposed DSM Programs C-1 D. 1994 Integrated Resource Plan - Surveys D-1 E. Customer Feedback E-1 VOLUME II F. LF A and GAF Data Listings F-1 l1l I. INTRODUCTION AND EXECUTIVE SUMMARY I. INTRODUCTION AND EXECUTIVE SUMMARY This report has been prepared for the South Carolina Public Service Authority (generally referred to as Santee Cooper) by Metzler & Associates, in cooperation with Energy Management Associates, the Utilities Division of EDS. Metzler & Associates (M&A) was the lead consultant on the assignment, while Energy Management Associates (EMA) provided software and analytical support for all of the studies performed. The purpose of this report is to document the results of a detailed and lengthy analysis of the resource planning options and decisions facing Santee Cooper over the next twenty years. The planning outlook of Santee Cooper's Corporate Planning Committee is reflected throughout this analysis, and all major assumptions and techniques used have been reviewed by Santee Cooper. The report does not, however, constitute the integrated resource plan of Santee Cooper, but is the independent work product of the project consulting team. While key decisions are analyzed and alternative resource paths are discussed herein, the judgment of Santee Cooper management ultimately will determine the preferred expansion path. The report describes the methodology used to arrive at a "reference expansion plan." The reference plan is M&A's assessment of the most cost-effective expansion path available to Santee Cooper, based upon the assumptions and policies articulated by Santee Cooper management. Also contained in the report are alternative expansion plans based on different assumptions and policies. The major resource decisions confronting Santee Cooper are described in detail. J This chapter provides an overview of the integrated resource planning analysis performed. The report is divided into nine chapters and two appendices. Subsequent chapters will discuss the planning process used to perform this study, the demand and energy forecast used, the demand-side management (DSM) options considered, the supply-side options considered, Clean Air Act compliance issues, the integrated planning results, sensitivity analyses performed, and a recommended near-term action plan. The appendices provide detailed descriptions of the generation technologies studied and the DSM programs analyzed. BACKGROUND ON THE SANTEE COOPER SYSTEM The South Carolina Public Service Authority was formed in 1934 by the legislature of South Carolina. The original purpose of the Authority, now commonly known as Santee Cooper, was to construct and acquire flood control, navigation, and reclamation works on the Cooper, Santee, and Conagree Rivers, and to produce, distribute and sell electric -1- power. Electric power operations were initiated in 1942 with the completion of the Santee Cooper Hydroelectric Project. Today Santee Cooper's electric service territory comprises military facilities, approximately thirty large industrial accounts, and approximately 94,000 other residential and commercial customers to whom Santee Cooper provides direct retail service. Additionally, wholesale service is provided to Central Electric Power Cooperative, an association of fifteen electric distribution cooperatives serving some 400,000 residential and commercial retail customers, and two municipal utilities-the City of Georgetown and the Town of Bamberg. At the start of this IRP, the peak electric demand in 1994 was projected to be 2,954 MW comprising both firm and non-firm customers, while installed and contracted generating capacity amounts to 3,279 MW. Available capacity includes 2,864 MW of owned or leased generating capability from hydroelectric, steam, and nuclear facilities. Another 215 MW is available under contract through the Southeastern Power Administration. Table I-1 identifies each of the existing Santee Cooper generating units by size and fuel type. Table 1-1 Summary of Existing Generating Resources Retirement Unit Name ~ Canacitx (MW) Date Jefferies 1 Coal 46 2000 Jefferies 2 Coal 46 2000 Jefferies 3 Coal 153 2015 Jefferies 4 Coal 153 2015 Grainger 1 Coal 85 2011 Grainger 2 Coal 85 2011 Winyah 1 Coal 270 NIA Winyah 2 Coal 270 NIA Winyah 3 Coal 270 NIA Winyah4 Coal 270 NIA Cross 1 Coal 540 NIA Cross 2 Coal 520 NIA Myrtle Beach 1-5 Oil 90 NIA Hilton Head 1-3 Oil 97 NIA Sumner Nuclear Nuclear 295 NIA Spillway Hydro Hydro 2 NIA Jefferies Hydro Hydro 128 NIA St. Stephen Hydro Hydro 64 NIA -2- Future load growth for Santee Cooper is largely dependent upon external factors outside the control of management. The largest swing factor involves a single industrial customer which accounts for 300 MW of firm and interruptible load. This customer has the option of leaving the system in the year 2000 by giving notice in 1997. Changes of this magnitude in the total system load forecast will obviously influence the selection of resource expansion plans. As a result, Santee Cooper's plans need to include planning contingencies for both the loss of this load as well as its continuation. THE CURRENT RESOURCE PLANNING OUTLOOK The current resource planning outlook is summarized in Exhibit 1-1. As shown, there is a wide range of future planning scenarios to be considered. Resource requirements I I depend upon the level of demand growth ultimately experienced on Santee Cooper's system, an outcome which will be influenced heavily by the decision of one industrial customer (ALUMAX) on whether to leave Santee Cooper's system or not. Six forecasts were analyzed, as summarized below. • Under the Base Case Forecast (Case 1), Santee Cooper has sufficient generation to meet the needs of its customers until the year 2003. The Base Case Forecast assumes average growth in demand of 0. 7 percent over the first ten years of the twenty-year planning horizon, including the loss of the ALUMAX load. The same forecast including the ALUMAX load (Case 2) shows growth of 1.8 percent over the first ten years and a need for new capacity in the year 2000. The addition of the recommended DSM programs will result in the delay of the required in-service date of the first unit by one year, and a reduction in new capacity required of 160 to 200 MW over the study period. • The High Case Forecasts (Cases 3 and 4, without ALUMAX and with ALUMAX) show an immediate need for new capacity. The High Case Forecast without ALUMAX calls for average growth in demand of 1.1 percent over the first ten years of the planning horizon, based on higher than expected demand across all customer segments. New capacity resources are required to meet this load forecast in 1997. Including ALUMAX, the High Case Forecast calls for a growth rate in demand of 2.0 percent over the first ten years of the planning horizon. New capacity resources are required to meet this load forecast in 1997. In both of these cases, the 1997 requirement reflects the earliest possible date for Santee Cooper to complete a new generation resource. However, the load in the earlier years (1994 to 1996) exceeds existing capacity resulting in the need for purchasing short- or long-term capacity.
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