Santee Cooper announces plans to recycle all coal ash at 3 SC plants

Wednesday, November 20, 2013 1:08 PM ET Exclusive
Santee Cooper announces plans to recycle all coal ash at
3 SC plants

By Jonathan Crawford

South Carolina electric utility Santee Cooper on Nov. 19 announced plans to recycle for beneficial use all of the coal ash stored in ponds at three
of its power plants located in the state. The move follows a settlement agreement the utility entered into with several environmental groups that same
day.

"As we continue working to close units at Jefferies and Grainger and consider long-term needs for Winyah, Santee Cooper is focused on solutions
that are cost-effective and beneficial to the environment and the economy," Santee Cooper executive vice president of corporate services R.M.
Singletary said in the news release. "This is a triple win. It is cost-effective, which means it is responsive to our customers' best interests. It utilizes
innovative technology to help an important South Carolina industry be sustainable. And it is an EPA-approved use of ash."

Per the terms of the settlement agreement with the Southern Environmental Law Center, or SELC, Santee Cooper, known legally as the South
Carolina Public Service Authority, must remove from its lagoons in the city of Conway and the Waccamaw River within seven to 10 years the ash that
had been produced from its now-retired Grainger generating station. Alternatively, the utility may recycle the ash, which it said it intends to do. Any
ash from the site that is stored is required to be placed in a class three or better landfill. In addition, Santee Cooper is to remove one foot of soil from
beneath the lagoons and conduct groundwater testing for arsenic.

In addition to the Grainger plant, Santee Cooper said that over the next 10 to 15 years it will recycle all of the ash at the ponds serving its 1,150-MW,
coal-fired Winyah power plant in Georgetown County and its Jefferies power plant in Berkeley County, which had its coal-fired units retired and
runs on residual fuel oil. Santee Cooper said it will provide excavation, loading and transportation of the ash to the plants where it will be used. In
total, 11 million tons of coal ash from the three plants will be recycled, according to Santee Cooper spokeswoman Mollie Gore.

The SELC took issue with Santee Cooper's storage of coal ash from the Grainger generating station in unlined lagoons located in wetlands next to the
Waccamaw River. The state environmental agency found that the lagoons discharged arsenic into the surrounding groundwater, with concentrations
of the pollutant exceeding the legal limit by 300 times and in violation of the South Carolina Pollution Control Act, the SELC said.

"This is an historic agreement that removes toxic coal ash from beside the Waccamaw River and from Conway," SELC senior attorney Frank
Holleman said in a statement. "This settlement is good for Conway, for the river, and for Santee Cooper, and we thank Santee Cooper for reaching
this agreement."

The SELC had filed the suit on behalf of Waccamaw Riverkeeper, the Coastal Conservation League and the Southern Alliance for Clean Energy.

Holleman said in a Nov. 19 interview that the class-three landfill is "light years" ahead of the current storage method used at the Grainger plant. He
said it requires the use of a synthetic liner and leachate collection that are commonly used by municipal waste facilities and that the ash would be
stored away from water bodies. He said that according to documents he obtained, the cost for Santee Cooper to store the ash from the Grainger plant
at one of the utility's landfills would be about $40 million.

Holleman chalked up Santee Cooper's decision to remove the ash from the ponds serving its three power plants to legal pressure, noting that the
utility originally intended to store the Grainger plant's ash indefinitely in a vault by the Waccamaw River.

On the other hand, Santee Cooper's Gore said Nov. 19 that while the ash recycling will cost money and not be profitable, it "makes sense" from a
long-term standpoint. She said that Santee Cooper has been recycling coal ash since the 1970s and that companies are developing new technologies
that make recycling more viable.

"Some of the companies that we already work with have been quick to embrace the opportunity," she said, though she was unable to provide a cost
estimate of the recycling initiative.

The SELC recalled that the settlement is the second of two such agreements requiring a major utility to remove coal ash stored beside a major
river. In the first settlement agreement, which took place in 2012, the SELC and the Catawba Riverkeeper settled with SCANA Corp. subsidiary
South Carolina Electric & Gas Co. for the removal of 2.4 million tons of coal ash from the Wateree River in Richland County.