Duke Energy (NYSE: DUK) has several–fired units planned for early retirement or being evaluated for potential retirement, excluding the Duke Energy Carolinas 170-MW Lee Unit 3, which is being converted to gas in 2015.
Duke Energy said in its March 2 annual Form 10-K report that the probable coal retirements by subsidiary are:
- Duke Energy in total, 1,704 MW;
- Progress Energy/Duke Energy Florida, 873 MW, consists of Crystal River Units 1 and 2 in Florida, which are due to retire by 2018;
- Duke Energy Ohio, 163 MW, includes Miami Fort Unit 6 which is expected to be retired by June 1, 2015; and
- Duke Energy Indiana, 669 MW, includes Wabash River Units 2 through 6. Wabash River Unit 6 is being evaluated for potential conversion to gas, so it may not be an outright retirement. Duke Energy Indiana is committed to retire or convert these units by June 2018 in conjunction with a settlement agreement associated with the Edwardsport coal gasification plant air permit.
At another point in the Form 10-K, the company wrote: “The Subsidiary Registrants periodically file Integrated Resource Plans (IRP) with state regulatory commissions. The IRPs provide a view of forecasted energy needs over a long term (10 to 20 years) and options being considered to meet those needs. Recent IRPs filed by the Subsidiary Registrants included planning assumptions to potentially retire certain coal-fired generating facilities earlier than their current estimated useful lives. These facilities do not have the requisite emission control equipment, primarily to meet United States Environmental Protection Agency (EPA) regulations recently approved or proposed. These facilities total approximately 1,704 MW at three sites. Duke Energy continues to evaluate the potential need to retire these coal-fired generating facilities earlier than the current estimated useful lives, and plans to seek regulatory recovery for amounts that would not be otherwise recovered when any of these assets are retired.”
The Form 10-K also said about coal use in general: “Coal purchased for the Carolinas is primarily produced from mines in Central Appalachia, Northern Appalachia and the Illinois Basin. Coal purchased for Florida is primarily produced from mines in Central Appalachia and the Illinois Basin. Coal purchased for Indiana is primarily produced in Indiana and Illinois. Regulated Utilities has an adequate supply of coal under contract to fuel its projected 2015 operations and a significant portion of supply to fuel its projected 2016 operations. Current coal inventory levels for Regulated Utilities are at adequate levels and are expected to remain at adequate levels for the remainder of 2015. Changing natural gas prices continue to influence the level of coal generation.
“The current average sulfur content of coal purchased by Regulated Utilities is between 1.5 percent and 2 percent for Duke Energy Carolinas, between 1.5 percent and 2 percent for Duke Energy Progress, between 1 percent and 2.5 percent for Duke Energy Florida, and between 2 percent and 3 percent for Duke Energy Indiana. Regulated Utilities’ environmental controls, in combination with the use of sulfur dioxide (SO2) emission allowances, enable Regulated Utilities to satisfy current SO2 emission limitations for its existing facilities.”