The N.C. Utilities Commission will let Duke Energy build two natural gas-fired units at its Asheville power plant, replacing coal, but denied Duke’s contingent request for a third gas unit.
The decision late Monday afternoon echoed the recommendations of the Public Staff, which advocates for utility customers. The independent agency had said Duke could apply for the third unit if needed in later years.
The commission’s decision came on the last day of an unusually fast 45-day approval process mandated by legislation last year. The legislation was meant to shut down Duke’s coal-fired power plant in Asheville and replace it with cleaner-burning natural gas.
Asheville residents applauded the impending end of the coal plant, whose smokestacks had towered over southern Buncombe County since 1964. But thousands of public comments later prompted Duke to scale back the initial size of the gas-fired units and to scrap a 45-mile transmission line into South Carolina.
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Even then, advocates questioned the need for the size of the two 280-megawatt plants approved Monday and Duke’s continued reliance on fossil fuels linked to climate change. Construction on the units will start this year and finish by late 2019.
While pleased with the denial of a third unit, Joan Walker of Asheville-based MountainTrue said the two approved units “were unjustified and oversized and not the best use of ratepayer dollars. Natural gas prices may be low now, but we fear that over-investment in such a large plant will saddle our region’s families and businesses with higher electricity bills in the future.”
The Durham advocacy group NC WARN, which claims the fast-track approval let the project avoid in-depth scrutiny, said it will appeal the decision.
Duke had intended the denied unit to be a backup if local efforts to reduce electricity demand daily and at peak times, such as on cold winter mornings, failed. If they work, Duke said it will delay or cancel plans to seek separate approval of the extra unit.
Spokesman Tim Pettit called the energy-saving efforts a “stretch goal” that would require marked improvement in the Asheville region’s energy efficiency and demand-shaving profile. Much depends, he said, on whether the region’s rapid growth continues.
“We’re committed to working with the community,” Pettit said. Duke says it will also build a 15-megawatt solar farm and 5-megawatt energy storage project in Asheville.
The Public Staff has said new technologies and alternatives might emerge by 2024, when Duke projects a third unit might be needed.
Duke serves 160,000 customers in the Asheville area and 350,000 in the nine-county western region. Peak power demand has tripled in the region since 1970, Duke says, and spiked in the frigid winters of 2014 and 2015. Demand is expected to grow by 17 percent over the next decade.
The commission left unsettled Monday the approval of costs for the Asheville construction, which Duke estimates at $1 billion. Those costs are likely to be eventually added to customer bills.
The six-page decision included conditions that Duke retire the coal plant by the time the gas units go online and that Duke report annually on the energy-saving efforts.
The commission also ordered Duke to study retrofitting the four coal-burning units at its Roxboro power plant, in eastern North Carolina, to improve their efficiency. A Roxboro retrofit had been included in a state response to the Obama administration’s carbon-cutting plan for power plants.
A detailed summary of the commission’s analysis of the project will be filed later.
Of four Duke plants that legislators singled out as high priorities for closing ash ponds, following the 2014 ash spill into the Dan River, Asheville is the only one still operating. The plant’s two ponds have been linked to groundwater contamination, leading to charges by state regulators a year ago February.
Duke has already retired seven of its North Carolina coal plants in the past five years as it moves to cheaper and cleaner-burning natural gas.
Legislation sponsored last year by Sen. Tom Apodaca, a Hendersonville Republican, set the 45-day approval process by the Utilities Commission
Retiring the Asheville plant lets Duke avoid the cost of converting the plant to handle coal ash in dry form by the end of 2019, as state law dictates. Duke can also scrap plans to build two oil-fired units to supply peak demand.