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NC regulators order $10M commitment for plant permit appeal

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NC regulators order $10M commitment for plant permit appeal

The NorthCarolina Utilities Commission on May 10 ordered a $10 million bond or written undertakingfor groups looking to appeal approval of DukeEnergy Progress LLC's Ashevillecombined-cycle gas plant.

The NCUCon March 28 formally issuedits certificate of public convenience and necessity, or CPCN, for the 560-MW projectin Buncombe County, N.C.

The utility will buildtwo 280-MW combined-cycle, natural gas-fired units with fuel oil backup and transmission facilities aspart of the $1 billion plan to meet the region's energy needs and ramp up the retirementof the 379-MW Ashevillecoal plant. (Docket No. E-2, Sub 1089)

However,in early May, Duke Energy Progress requesteda $50 million bond after the North Carolina Waste Awareness and ReductionNetwork, or NC WARN, and The Climate Times asked for an extension of time to filea notice of appeal and exceptions to the commission's order.

Appealsof a CPCN order are subject to a statutory bond requirement.

NC WARNand The Climate Times argued that this bond should be set at $250 based on theirargument that Duke Energy Progress and its customers would not suffer any damagesif the appeal were unsuccessful, according to regulatory filings.

DukeEnergy Progress called the groups' argument "absurd" based on the pricetag of the generation project and the impact an appeal would have on customers dueto potential construction delays.

The utilityadded that it would need to invest approximately $100 million in additional environmentalcontrols at the Asheville coal plant to meet state compliance requirements if constructionon the gas units is postponed.

Regulatorsordered the $10 million bond or undertaking to be paid on or before May 27 as thoseinvolved in the case "investigate and determine what amount of bond or undertakingis reasonably sufficient to discharge the appealing party's obligation." Inaddition, Duke Energy Progress must inform the commission on or before Sept. 1 whetherit plans to delay construction of the facility because of appeal.

"Theestimate of $50 million for an increase in the cost of the facility due to appellatedelays does not appear extravagant," NCUC wrote in its order. "Rather,the sum might be appropriate or conservative considering the total cost of the project.In any event, due to DEP's uncertainty regarding whether it might delay constructiondue to an appeal and NC WARN's assurance that it will not seek a stay or injunction,the commission has determined that a lesser sum of $10 million is sufficient atthis time to satisfy potential damages that may be incurred by delaying the beginningof construction of such a large capital investment."