Duke plans early-2017 construction start on Asheville repower project

Duke Energy (NYSE:DUK) reported in its Nov. 4 quarterly Form 10-Q statement that it plans to begin construction in early 2017 on its Western Carolinas Modernization Plan, which is a gas-fired replacement for the coal-fired Asheville power plant in western North Carolina.

In November 2015, 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. The plan requires various approvals including regulatory approvals in North Carolina.

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, 2016. On March 28, the NCUC issued an order approving the CPCN for the new combined-cycle natural gas plants, but denying the CPCN for the contingent simple cycle unit without prejudice to Duke Energy Progress to refile for approval in the future.

"Site preparation activities are underway and construction of these plants is scheduled to begin in early 2017," said the Form 10-Q about the repower project. "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, N.C. Waste Awareness and Reduction Network (NC WARN) and The Climate Times filed a notice of appeal from the CPCN order to the N.C. Court of Appeals. They have lost in court and at the commission since then. On Oct. 17, NC WARN and The Climate Times filed yet another petition for review with the N.C. Court of Appeals related to the matter. 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 $562 million and $548 million are included in Generation facilities to be retired, net on Duke Energy Progress’ Condensed Consolidated Balance Sheet as of Sept. 30, 2016, and Dec. 31, 2015, respectively.

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.