Q&A with Lonnie Carter, president and chief executive officer of Santee Cooper.

Lonnie Carter is the top executive for Santee Cooper, a state-owned utility that provides electricity to 2 million South Carolinians in all 46 counties.

He recently sat down with Post and Courier special projects reporter Tony Bartelme and Special Projects Editor Doug Pardue. Below is a portion of their interview.

Q: What are your thoughts about global warming?

LC: Global warming is probably one of the most interesting issues that not only our country faces but the world as a whole. I personally believe that the science demonstrates that the climate is warming. From there, you can go into and listen to a whole host of different folks who have different opinions about it.

Where I come down on it is as an utility executive is that if we're going to work on this issue, it falls back into the same camp that utility executives should look at it anyway: If you can reduce emissions and do it economically, you ought to do it.

So I don't let myself get wrapped around the axle about science. In some ways it can be a little bit gaudy to think that we can actually affect the climate, actually change it or stop something that's going on. But the fact is that this is a global issue. If you look at where greenhouse gasses come from, this country can't alone address this. It's going to take

international cooperation and a lot of research and development if we're really going to make any headway.

Q: Do you think utilities contribute to global warming?

LC: I don't know. If you listen to the scientists and how they parse out the data, the utility is a portion. Transportation is another good-sized portion, and then you have residential and industrial side. They aren't hugely different in terms of percentages. There's no doubt that CO2 is a greenhouse gas. There are some basics that I don't think should be argued

about.

The real issue is how much can be done and what will it achieve. I'm always somebody who asks: If we're going to take steps, what are we going to achieve? And that's where the scientific community starts to unravel. It can 't tell us what we will achieve. If I don't have any hard scientific evidence to tell me where I should be, I go back to what we ought to do: If

we can reduce emissions, we should reduce emissions.

Q: So you think it's egotistical to think people can change the climate?

LC: I do think there's some humor in that, because people aren't asking today, “OK, what levels should greenhouse gases be to get the climate we want?” I think there's been a lot said about this, and there's a lot unknown and an awful lot of rhetoric out there that's not supported by hard evidence.

In a role like mine, in some ways, the rubber meets the road here, so we've got to make decisions as factually as we can and live with whatever the policy-makers get us. This is going to be a policy decision. This won't be an electric utility decision because it affects so many things that deal with our quality of life.

There are five areas that we ought to work on and work on them hard because there's no silver bullet. I like to say there's no silver buckshot. The first thing we need to do is work on conservation. We've done a lot in that area, but to be effective, it's going to take a cultural change in America. Renewables need to be an element of that.

We need to do new nuclear power in this country. Nuclear power does not have greenhouse emissions. We need to finally look at research and development. I didn't coin this, but we're the Saudi Arabia of coal. We have so much coal available to us. It's a natural resource. We get over 50 percent of our current electricity from coal. We can't abandon coal. It's got to be part of our future for those reasons. So we need to invest money in research and development to make it cleaner and more efficient and look at sequestering

CO2. But again, that's going to be a long, arduous process and takes a big commitment.

Q: As a major executive for a major utility involved in the process of putting online a huge new power plant (on the Great Pee Dee River), why did you pick a coal-fired power plant instead of other alternatives?

LC: That's a fair question: Why do you pick a coal plant? One, I would say today's coal power plants aren't your father's coal-fired power plants.

Every time a new coal plant is built, it has to be built under something called the best available control technology. The industry has improved the technology that it uses today, and I believe that this technology has got to continue to improve.

But that technology wasn't developed and deployed overnight. It started out with precipitators that remove the fine particulates. Then we went to sulfur dioxide scrubbers, and we have been leaders in this area. We've had them longer than anyone else in the state. We operate seven of the eight scrubbers in the state. We've got some that remove the nitrogen oxide, and through those mercury emissions have been reduced as well. Now, what is left is something that you get from burning any fossil fuel, any carbon-based fuel — and that is CO2. Even when we exhale, we exhale CO2. I've heard there are more greenhouse gases from livestock on the globe than any other source.

It's easy for people to take cheap shots. We have to suit up every day, every hour and every minute and have somebody that's producing electricity. It's easy for people to throw out these ideas, but it's much more difficult when you sit in the hot seat and play the game.

Q: You've said people had taken cheap shots and that there's a lot of rhetoric, what do you think of Al Gore's “Inconvenient Truth”?

LC: I don't want to get into the political world, because the political world is going to decide this policy. Again, I think there's been a lot of rhetoric on this issue. I've had the opportunity to listen to a lot of scientists, some who you would call the rabid scientists who say you need to act right now. Even those folks are cautious about saying what can be done

and should be done. That's why I think, and no offense, but there's been a lot in the media that frankly is not backed by hard science. That's something that needs to be brought to bear on this issue. If we want to reduce greenhouse gases, I would equate that with what we did to put a man on the moon.

The first step is to identify an overall energy policy and develop a way to fund it. I don't want to be so enamored with (President John F.) Kennedy's speech about putting a man on the moon and returning him safely. But it was a clear goal, and we knew what we were working for. I want a clear goal that everyone knows, that they know what it takes to achieve it, and then figure out a way that the investment happens so it will. Don't expect me as a utility executive to arbitrarily tax my customers for a problem that the rest of the world needs to deal with.

Q: Do you have a position on taxes on carbon?

LC: I don't have a position. You can make either work, but it's a federal policy issue. Congress needs to bear down on that issue.

Q: Has Santee Cooper done any studies on the economic risks of building an additional coal plant?

LC: We do an economic study every time we look at building any new resource.

Q: How about an analysis that takes into account an environment involving taxes on carbon?

LC: We have certainly looked at what would happen if carbon were taxed. In simplistic terms, let's talk about a tax — a certain dollar per ton. Remember what I said before, every carbon-based fuel, even wood and biofuels, all those things, have carbon emissions.

Another alternative is nuclear which has no greenhouse gases. And that's why we've chosen to pursue nuclear power. And that's a big step for a company of this size and the board of our company. Why would a company of our size to be one of the first people to build a nuclear unit? It's the only resource that makes any sense at this point that doesn't have a carbon emission.

Q:: Where are you in that process?

LC: Not as far as we should be. We're 18 months after we made that decision.

We're restarting an industry, and as you may guess, not everyone is in favor of this. We hope to be in the first wave, the first six nuclear plants.

Q:: If you had to guess, when do you think it would be online?

LC: We're looking at 2016. We hope by the first quarter to have an agreement with a vendor to build it. But we have to afford it. I'm a country boy from South Carolina. I grew up here, and it's going to cost $2.5 billion dollars to build it. That's a lot of money.

Q: That's more expensive than a coal plant.

LC: The fuel (for a nuclear plant) costs less so when we do the analysis, it becomes cost effective.

Q: Can you estimate how much your customers would pay if carbon were taxed?

LC: I can tell you that there are various proposals out there, half a dozen or so, raising power costs ranging from 15 percent all the way to 60 percent. It's a daunting issue. These proposals we've seen — 60 percent is not Chicken Little.

If you look at our state's per capita income, we're 44th, and some of the people we serve are those who are dragging that number down. So it's hard for me to play fast and loose with our power costs. So that's why there has to be some balance as far as protecting the environment.

Q: As you know, the New York attorney general is subpoenaing utility executives and alleging that investors weren't properly informed about the risks building coal-fired power plants.

LC: We certainly disclose that these issues exist and that they need to weigh them.

Q: Does it make you nervous?

LC: No it doesn't. You have to remember we have an obligation to keep the lights on. We think we've made good decisions and presented them to the board and the public, and that we're on course. I believe this is politics.

Q: How concerned are you about mercury emissions?

LC: I think mercury emissions falls into the same category of all emissions: I wish it could be as low as possible. Something I am very proud of is that our mercury emissions are very low and substantially below, four times the standard set by government agencies.

A lot is said about where mercury comes from in our waters. The information I get from the EPA is that it's not coming from U.S. power plants. According to the information they put out is that power plants contribute only 1 percent of the mercury. When I first heard that, I thought they were wrong, but that's what they say.

Q: Do you eat fish?

LC: Yes, I don't eat enough that I would go over the levels that DNR (Department of Natural Resources) recommends. I think a lot of people like to single us out, but the facts don't just support that. Mercury comes from a lot of sources.

Q: Does Santee Cooper contribute mercury to the environment?

LC: Certainly. We have mercury emissions.

Q: Does it affect areas around the plants?

LC: That's another interesting argument. We're working with DHEC, actually as part of the Pee Dee facility, we're putting a mercury monitor on the site so we can see what's falling there now and so we can take a look at it later. You would think that this had been studied.

When we normally talk about emissions, you talk about tons, but when you talk about mercury, you talk about pounds, because we're talking about small quantities. We have put on continuous mercury monitoring equipment, and I'm really anxious to see what these new measuring devices take us.

Q: There are studies that suggest there's a local deposition problem with mercury and coal-fired power plants.

LC: I haven't seen those studies. I believe DHEC and DNR are finding mercury in fish. I don't think they're misleading us. That's something that policy-makers ought to be looking at. But when I look at what we're doing, exceeding the standards, I've done what I've been asked to do.

Q: If we don't know for sure whether there's a mercury problem, shouldn't we study it so we don't potentially make the problem worse for that site (Pee Dee)?

LC: I think EPA and DHEC have looked at that issue and have set a standard.

Q: I don't think they have studied whether there's a local deposition problem in South Carolina. And your own preliminary statement says there would be some mercury released, and that it could be toxic to wildlife that eats fish.

LC: If you want to get into specifics, you need to go back to RM (a consultant) or Jay (Hudson, an environmental manager). But what I can tell you is that we're going to meet the standards. What we have agreed to do is work with the resource agencies, EPA and DHEC, if they need to look into that, we've always been open to working with them.

Q: What if you find a local deposition problem? Doesn't that put your company and ratepayers at a financial or legal risk?

LC: I'm not an attorney.

Q: How about moral or ethical risk?

LC: I can tell you that we'll meet the standards.

Q: Is it ethically right to add to an existing problem?

LC: I think you're asking a question that's unanswerable. Did you drive a vehicle up here today? Everybody contributes. They're going to turn on their flat-screen TVs, plug in their phones. We're providing a service that's basic to our way of life. We have to have balance. We're going to meet those standards and try to beat them. That's all we can do.