Duke working through appeals of Asheville repowering project in North Carolina

Duke Energy (NYSE: DUK) reported in its Aug. 4 quarterly Form 10-Q filing that it is making progress on opposition to its Western Carolinas Modernization Project, which involves a gas repowering of the coal-fired Asheville plant in western North Carolina.

In November 2015, in response to community feedback, Duke Energy Progress announced a revised Western Carolinas Modernization Plan with an estimated cost of $1.1 billion. The revised plan includes retirement of the existing Asheville coal-fired plant, the construction of two 280-MW combined-cycle natural gas plants having dual fuel capability, with the option to build a third natural gas simple cycle unit in 2023 based upon the outcome of initiatives to reduce the region’s power demand.

The revised plan includes upgrades to existing transmission lines and substations, but eliminates the need for a new transmission line and a new substation associated with the project in South Carolina. The revised plan has the same overall project cost as the original plan and the plans to install solar generation remain unchanged. Duke Energy Progress has also proposed to add a pilot battery storage project. These investments will be made within the next seven years. Duke Energy Progress is also working with the local natural gas distribution company to upgrade an existing natural gas pipeline to serve the natural gas plant. The plan requires various approvals including regulatory approvals in North Carolina, the Form 10-Q noted.

Duke Energy Progress filed for a Certificate of Public Convenience and Necessity (CPCN) with the North Carolina Utilities Commission (NCUC) for the new natural gas units on Jan. 15 of this year. On March 28, the NCUC approved the CPCN for the new combined-cycle natural gas plants, but denied the CPCN for the contingent simple cycle unit without prejudice to Duke Energy Progress to refile for it later. Construction of these plants is scheduled to begin in 2016 and the plants are expected to be in service by late 2019. Duke Energy Progress plans to file for future approvals related to the proposed solar generation and pilot battery storage project.

On May 27 of this year, environmental groups NC WARN and The Climate Times filed a notice of appeal from the CPCN order to the North Carolina Court of Appeals. On May 31, Duke Energy Progress filed a motion to dismiss the notice of appeal with the NCUC due to NC WARN’s and The Climate Times’ failure to post a required appeal bond. After a series of filings, an NCUC order, petitions to the N.C. Court of Appeals and an evidentiary hearing, on July 8 the NCUC issued an order setting NC WARN’s and The Climate Times’ appeal bond at $98 million. On July 28, NC WARN and The Climate Times filed a notice of appeal and exceptions from the NCUC’s July 8 appeal bond order. On Aug. 2, the NCUC granted Duke Energy Progress’ motion to dismiss NC WARN’s and The Climate Times’ notice of appeal from the CPCN order due to failure to post the requisite bond. Duke Energy Progress cannot predict the outcome of this matter, the Form 10-Q added.

The carrying value of the 376-MW Asheville coal-fired plant, including associated ash basin closure costs, of $506 million and $548 million are included in generation facilities to be retired in Duke financial reports.

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.