State asked to deny Duke power plant expansion

In a brief filed today, a coalition of public interest, environmental and clean energy groups urged the North Carolina Utilities Commission to reject Duke Energy Carolinas’ bid for an unnecessary expansion of a Charlotte-area coal-fired power plant that will increase the state’s contribution to global warming and could raise utility rates.

The brief comes after a three-day hearing last month, called in response to an escalation in Duke’s estimated cost to build the proposed units – now $3 billion, up from $2 billion in fall 2006. Experts testified at the hearing that the proposed expansion is not the most cost-effective way to meet Duke Energy’s customers’ needs and that Duke has not fully explored ways to offset projected energy demand with energy efficiency or renewable energy sources. Furthermore, Duke witnesses admitted that the company has no plans to control the facility’s emissions of carbon dioxide, a major greenhouse gas, and that the company will seek to have the new units “grandfathered” under any future federal law that would require control of carbon dioxide emissions. Many expect Congress to take action soon to reduce greenhouse gas emissions from power plants and other industrial sources.

“The Utilities Commission has an important decision to make,” said SELC attorney Gudrun Thompson. “The decision on Cliffside will determine if North Carolina is committed to making smart energy choices now that will provide cost-effective, clean energy for the next 50 years - or stuck in a business-as-usual mode, building more plants using outdated technology that locks us in to a high-cost, high-pollution energy future that damages our environment and our economy. These are critical issues for the people of our state.”

Duke has filed an application with the Commission for a “Certificate of Public Convenience and Necessity” to build two 800-megawatt conventional coal units at its existing Cliffside Steam Station near Shelby —using outdated, dirty coal technology and without having tapped the potential of cleaner, lower-cost options such as energy efficiency and renewable energy. Because the costs of building new plants will be passed on to Duke’s customers, state law requires the company to prove that it needs the additional capacity to meet consumer demand and that the proposed units are the lowest cost way to meet that need.

“The Utilities Commission should say no to Duke Energy’s plan. The company simply did not make a compelling case for spending over $3 billion dollars of ratepayers’ money on two coal plants,” said Stephen Smith, Executive Director of the Southern Alliance of Clean Energy. “The alternatives of energy efficiency and clean renewable energy were clearly shown to be lower cost both to North Carolina consumers and to our environment.”

During testimony in front of the Commission, Duke Energy officials confirmed that, although it is seeking approval to build two 800-megawatt facilities, Duke plans to use the power from only one of the facilities to serve its customers. Meanwhile, Duke is seeking an outside buyer for the additional 800 megawatts. Furthermore, CEO Jim Rogers acknowledged that if the state denies the units at Cliffside, the company can and will use natural gas and other resources to meet the state’s projected energy needs. Experts pointed to this as further proof that Duke has not demonstrated a need for the coal-burning facilities.

A recent study done for the Utilities Commission estimates that 10 percent of the state’s energy demand could be offset with energy efficiency and renewable energy without raising rates. However, Duke officials told the Commission that the company has not fully explored energy efficiency programs in this state. In fact, such programs make up a tiny percentage of the company’s portfolio.

"The North Carolina General Assembly is a step ahead of Duke Energy. Bills to establish renewable energy and efficiency standards have been introduced in both the Senate and House. One way or the other, utilities will be required to meet more and more energy demand through renewable energy and efficiency, not by burning dirty coal," said Michael Shore, Senior Air Policy Analyst for Environmental Defense. "Scores of legislators are stepping forward in support of clean, renewable energy. The Utilities Commission should too."

Much of the testimony at the hearing concerned the substantial amount of carbon dioxide that the expanded plant would emit. The two units Duke seeks to build would produce 11.5 million tons of carbon dioxide annually, the equivalent of a million cars on the road. No carbon dioxide controls now exist for old-style, pulverized coal units such as those proposed for Cliffside, and none are expected on the market in the near future.

The Commission is expected to rule on the Certificate request by February 28, a date Duke Energy says is needed in order to lock in projected costs of the project. The project would still need to qualify for a state-issued air permit, a process that could not be completed until early summer at the soonest.

As Jim Warren, Executive Director of North Carolina Waste Awareness and Reduction points out, "This project would increase Duke Energy’s profits at the expense of its customers. The Commission should instead choose the path of clean, efficient energy that benefits customers and North Carolina’s environment."

The Southern Environmental Law Center (SELC), Environmental Defense, the Southern Alliance for Clean Energy (SACE), the N.C. Waste Awareness and Reduction Network (NC WARN), and the N.C. Sustainable Energy Association (NCSEA) have joined together to urge the Commission to deny the certificate. SELC is representing Environmental Defense and has also intervened on its own behalf.