1. 04/16/2004-72000-285-1 Planning New Generation APPA Operations & Engineering Conference April 10, 2006 Jay Hudson, PE Manager, Environmental Management

2. 04/16/2004-72000-285-2 Drivers For Planning New Generation u System load growth u Changes in gas and coal prices  Other generation technologies available u Energy Policy Act of 2005 provides incentives for Nuclear / Clean Coal u Renewed interest in nuclear for fuel diversity u Longer Lead Times  Permitting  Equipment Procurement  Joint Ownership Arrangements

3. 04/16/2004-72000-285-3 Resource Planning Process Load Forecast Screen Supply-Side Resource Plan Optimization Financial Analysis Risk Analysis Recommended Plan

4. 04/16/2004-72000-285-4 Reserves Surplus (Deficiency) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 -425 -300 -150 130 -75 35 20 -700 -550 25

5. 04/16/2004-72000-285-5 Resource Planning Process Load Forecast Screen Supply-Side Resource Plan Optimization Financial Analysis Risk Analysis Recommended Plan

6. 04/16/2004-72000-285-6 Technology Assessment Team Study Goals  Research available information and recommend potential resources for future base load generation  Provide data to modeling group for determination of least cost options

7. 04/16/2004-72000-285-7 Technology Assessment Team Process  Reviewed Generation Options for Base load  Obtained capital and O&M costs  Reviewed reliability/availability data  Reviewed potential environmental impact  Obtained projected fuel cost data from DOE  Obtained generation forecast

8. 04/16/2004-72000-285-8 Fuel Cost  USDOE projects energy costs for natural gas and petroleum products are expected to rise, then stabilize  Costs for coal are expected to remain stable and below alternate fuels  Exception: Pet coke is expected to be below coal

9. 04/16/2004-72000-285-9 Ultracritical  These units use extremely high pressures coupled with high temperature exotic metals to produce very high efficiencies  Installation cost is ~ $1200-1800/kw Advantages  Lower operating cost by virtue of higher efficiency  Lower fuel use and lower emissions Disadvantages  Lack of experience with the fabrication and maintenance of metal alloys  Higher capital cost  Operation and maintenance issues not currently identified which would increase lifetime cost

10. 04/16/2004-72000-285-10 Supercritical  These units use higher initial turbine pressures coupled with high temperature to produce higher efficiencies than subcritical.  Installation cost:~$ 1050-1450/kw  Advantages  Lower operating cost because of higher efficiencies  Lower fuel use  Lower emissions  Disadvantages  Lack of experience with operating and maintaining these units  Increased capital costs

11. 04/16/2004-72000-285-11 Subcritical  These units use normal utility pressure and temperatures for electric generation.  All Santee Cooper units are subcritical  Installation cost: ~ $1000-1600/kw Advantages :  Lowest installation cost  Availability  Large pool of experienced labor for construction and operation Disadvantages :  Lower efficiency  Increased fuel cost and emissions

12. 04/16/2004-72000-285-12 IGCC/Gas Turbine  These units use a commercial gasifier in conjunction with combustion turbines in combined cycle configuration to produce electricity  Installed cost : ~$1250-2200/kw Advantages  Low waste  Carbon sequestration Disadvantages  Limited experience in the US  2 sites which already use these elements  These sites already had to solve technical issues to allow for reliability  Numerous technical issues still under investigation; requires further development  Requires higher level of technical expertise to manage the process  No CO2 storage available in South Carolina

13. 04/16/2004-72000-285-13 Integrated Gasification Combined Cycle ( IGCC)

14. 04/16/2004-72000-285-14 Fluidized Bed  These use a limestone circulating bed medium to burn fuel and absorb SO2  Installation costs : ~$ 1300-2000/kw Advantages  Lower installed costs  Large pool of experienced labor for construction and operation  Large degree of fuel flexibility and can readily burn many undesirable fuels and biomass  Decreased operation costs Disadvantages  Lower efficiency with increased emissions

15. 04/16/2004-72000-285-15 Circulating Fluidized Bed (CFB)

16. 04/16/2004-72000-285-16 Combustion Turbines  Combustion turbines have been used for power generation for decades  Range in size starting at 1 MW to 900 MW  Typically used for cogeneration  Two types of land based gas turbines :  Heavy-framed engines  lower compression ratios, physically large  Aeroderivative engines  high compression ratios, very compact Advantages  Relatively low installation costs  Low emissions  High heat recovery  Infrequent maintenance requirements Disadvantages  High Fuel Cost  High O&M cost

17. 04/16/2004-72000-285-17 Combined Cycle Power Plants  Integration of 2 types of power generation technology: gas turbine & steam turbine Advantages  Large amounts of power on short notice  Quicker start-up time  Short delivery time  Low heat rate; Higher overall thermal efficiency (55-60%)  Low environmental issues, relatively clean burning characteristics

18. 04/16/2004-72000-285-18 Nuclear  Two major types  Boiling Water Reactor (BWR)  Pressurized Water Reactor (PWR)  Certified/ Advanced Reactor Designs

19. 04/16/2004-72000-285-19 Fossil Options

20. 04/16/2004-72000-285-20 Nuclear Options

21. 04/16/2004-72000-285-21 Schedule Comparison

22. 04/16/2004-72000-285-22 Electric Generation Expansion Analysis System u Primary purpose is to determine the least-cost combination of resources to meet forecasted demand. u Study period: 2006 through 2024 with a 25-year extension period u Used by numerous utilities to develop resource plans. u EGEAS was developed by EPRI. EGEAS - Overview

23. 04/16/2004-72000-285-23 Resource Planning Process Load Forecast Screen Supply-Side Resource Plan Optimization Financial Analysis Risk Analysis Recommended Plan

24. 04/16/2004-72000-285-24 Generation Plan Example Outputs 168 MW CT Purchases IGCC Coal Nuclear 85 MW CT CFB CCU

25. 04/16/2004-72000-285-25 Sensitivity Analysis  Load Forecast Changes:  Load Reduction  Economic/Operational Assumption Changes:  Higher Nuclear Decommissioning Cost  Higher Long Term Interest Rate  Carbon Tax applied to Coal and CFB units  Higher O&M rates  15% planning reserves  Lower Nuclear availability factor

26. 04/16/2004-72000-285-26 Sensitivity Analysis (Cont.)  Construction Cost Changes:  Increased Capital Cost of Nuclear Construction  Partial and Full Nuclear Incentives  Fuel Commodity Cost Changes:  Coal and Gas Forecasts lowered  Coal Forecast increased 10-20%  Increased Nuclear fuel price

27. 04/16/2004-72000-285-27 Recommended Plan 168 MW CT Purchases IGCC Coal Nuclear 85 MW CT CFB CCU