Duke seeks South Carolina rate hike to cover new power capacity costs

Duke Energy Carolinas, in part to pay for new gas-fired capacity to replace some of its retiring coal-fired capacity, filed a March 18 request with the Public Service Commission of South Carolina to increase electric rates by about $220m (5.1%).

More than half of the request is driven by capital investments that Duke Energy Carolinas, a unit of Duke Energy (NYSE: DUK), has made in the electric system that serves 540,000 households and businesses in South Carolina.

“As part of our ongoing fleet-modernization plan, we have recently built and put into service two new, state-of-the art power plants that will provide cleaner electricity and serve our customers reliably for decades to come,” said Clark Gillespy, Duke Energy’s South Carolina state president.

“Our new Dan River natural gas plant does twice the job of the retired Dan River coal plant, and it does so with significantly lower emissions,” Gillespy said. “Meanwhile, new advanced technology at the Cliffside Steam Station, completed at the end of 2012, removes 99 percent of sulfur dioxide emissions and 90 percent of nitrogen and mercury emissions.”

The proposed rate increase is needed to begin paying the company back for money it has already invested in new, cleaner and more efficient power plants and equipment, and to comply with increasing state and federal regulations. Examples include:

  • Dan River Combined Cycle Station in Eden, N.C. — This 620-MW plant uses cleaner, lower-cost natural gas to replace a similar amount of older, less efficient coal-fired generation. The capital cost included in this rate case is $673m.
  • Cliffside Steam Station Unit 6 in Mooresboro, N.C. — This 825-MW coal plant, which went online last year, employs state-of-the-art emission controls to remove 99% of SO2, 90% of NOx and 90% of mercury. The capital cost included in this rate case is $236m.
  • Oconee Nuclear Station, Oconee County, S.C. — New safety and security measures have been installed to continue to protect the plant from extreme conditions or a natural disaster. The capital cost included in this rate case is $141m.
  • McGuire Nuclear Station, Mecklenburg County, N.C. — Upgrades have been made to the facility to make it more efficient, and to increase the amount of carbon-free electricity it produces. The capital cost included in this rate case is $135m. 
About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.