South Carolina utility Santee Cooper has withdrawn its proposal for a coal-fired power station in the US state, citing the carbon tax and environmental costs as the reason.

The decision follows strong opposition from residents and green activists concerned the plant would endanger residents near the station as well as nearby wetlands and waterways.

Despite protests, the state environmental agency approved the utility’s appeal for air permits for two 600MW boilers located in rural Florence County.

Santee Cooper spokeswoman Laura Varn said that the utility decided to abandon those efforts because of an 18% decline in its power sales to other utilities as well as slow economic recovery.

Another factor for the withdrawal was the proposed Federal Government rules such as a House-approved bill necessitating reduction of greenhouse gas emissions including carbon dioxide by 17% in 11 years time, Santee Cooper chief executive Lonnie Carter said.

Carbon tax and the price of technology were likely to be exorbitant in years to come, according to Carter, who said this would have a major impact on the utility’s future coal plant proposals.