Regulators size up costs, need for $1 billion Duke Energy gas plant

Asheville coal-fired power plant

RALEIGH, N.C. (AP) — North Carolina electricity regulators began deliberating Monday whether to allow a $1.1 billion Duke Energy conversion of a coal-fired power plant to burn natural gas.

The North Carolina Utilities Commission heard arguments for and against the Asheville-area project one week before a deadline set by state legislators for a decision on construction approval.

A state law last year pushes Duke Energy to scrap the 52-year-old coal-burning unit near Asheville within four years if the commission agrees it's in the public interest. The conversion also expands the Asheville site's power generating capacity by 50 percent. The commission's job to balance costs to consumers against seeing enough electricity supply built to meet future needs reliably.

The company forecasts peak regional electricity demand will grow by 17 percent in the coming decade. The company also is promising to build a solar farm generating about 3 percent as much electricity as the two gas-fired units planned for the plant.

Environmental groups oppose the project, saying Duke Energy is locking in decades of fossil-fuel generation at a time when renewable energy methods are becoming cheaper. Because Duke Energy would pass along the costs plus a profit margin to its customers, the company is overstating the region's future electricity needs, opponents said.

"Duke has an incentive to overbuild its system and maximize revenue for its shareholders. There's nothing nefarious there. It's just Duke's business model," said Gudrun Thompson, an attorney representing the Sierra Club and other conservation groups.

Monday's hearing was interrupted several times by protesters who complained that next week's tight deadline left too little time for the commission to verify independently how much electricity will be needed in the region in the decades ahead.

Protests last year stopped a 45-mile power line across the mountains from South Carolina. That, the company said, means not enough electricity can be zapped in from other places to meet likely demand, underlining the need for local generating capacity.

Company executives urged the commission to allow the coal-burning unit's replacement. Duke Energy has been converting its coal-fired plants to natural gas for the past decade, a process that is likely to continue for years to come.

The commission also should not order a smaller gas-burning plant, Duke Energy attorney Bo Somers said.

Unlike environmental and other groups, the company "does not have the luxury of a single-issue focus. We have to look at all of our customers' needs — commercial, industrial, residential," Somers said. "We have to consider a broad range of scenarios" including the future direction of fuel prices and potential carbon-emissions limits under pressure of the threat of climate change.

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