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NC regulators deny hearing request on Duke coal plant conversion

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NC regulators deny hearing request on Duke coal plant conversion

Duke Energy Carolinas LLC does not need to present evidence supporting its plan to modify two coal units at its 1,400-MW James E. Rogers Energy Complex (Cliffside) plant to co-fire on natural gas, state regulators ruled.

The North Carolina Utilities Commission on Jan. 17 issued an order that denies a request for an evidentiary hearing on the project from the North Carolina Waste Awareness and Reduction Network, or NC WARN.

NC WARN told regulators that an evidentiary hearing is necessary to address potential natural gas shortages and price volatility, as well as the costs of using two fuels in combination, which according to the citizens' group are not outweighed by sufficient benefits to ratepayers.

Duke Energy Carolinas, or DEC, has argued that it does not need commission approval for the $56 million project.

"As DEC intends to expend funds to modify but not expand the capacity of the Cliffside units at issue, the Commission determines that based on the facts as set forth in DEC's notification, as a matter of law no Commission authorization is necessary," the order stated.

"In determining not to require a hearing on DEC's notification, the Commission stresses that DEC's decision to expend $56 million without seeking any advanced analysis or approval from the Commission means that the reasonableness and prudence of its decisions will be subject to an ab initio [from the beginning] Commission review when DEC seeks recovery of these costs through rates," regulators added in their ruling.

The Rogers Energy Complex in Cleveland County, N.C., formerly the Cliffside coal plant, consists of the 556-MW subcritical unit 5, which began commercial operation in 1972, and the 844-MW supercritical unit 6, which began commercial operation in 2012. Cliffside units 1-4 were retired in October 2011.

Duke Energy Corp. said in August 2016 that it would begin looking at modifying coal-fired plants to also burn natural gas, starting with the Rogers Energy Complex units.

The conversion project is designed to enable up to 100% natural gas co-firing on unit 6, which can also run on 100% coal or a combination of the fuels, and 10% natural gas co-firing on unit 5, Duke Energy attorney Lawrence Somers wrote in an Oct. 11, 2016, letter to the utilities commission. The upgrades are expected to result in reduced operations and maintenance expenses, as well as additional fuel flexibility, operational flexibility and lower emissions, the attorney wrote.

The upgrades at the former Cliffside plant will be complete by April 2019, according to the company. (NCUC docket E-7, SUB 790)