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Duke wants NC regulators to set $50M bond on gas plant appeal

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Duke wants NC regulators to set $50M bond on gas plant appeal

wants NorthCarolina regulators to set a $50 million bond for groups looking to appeal approvalof the company's Asheville combined-cyclegas plant in Buncombe County, N.C.

The NorthCarolina Utilities Commission on March 28 formallyissued its certificate of public convenience and necessity, or CPCN,for the 560-MW project.

The utility will buildtwo 280-MW combined-cycle, natural gas-fired units with fuel oil backup and related transmission facilitiesas part of the $1 billion WesternCarolinas Modernization Project.

Regulatorsapproved the project Feb.29 as part of an expedited processdesigned to meet the region's energy needs and ramp up the retirement of the utility's379-MW Asheville coalplant. (Docket No. E-2, Sub 1089)

The NorthCarolina Waste Awareness and Reduction Network, or NC WARN, and The Climate Timeshave asked for an extension of time to file a notice of appeal and exceptions tothe commission's order.

However,appeals of a CPCN order are subject to a statutory bond requirement. The potentialappellants contend that this bond should be set at $250 based on their argumentthat DEP and its customers would not suffer any damages if the appeal were unsuccessful,according to regulatory filings.

"Bymaking the absurd argument that a $250.00 appeal bond would provide adequate protectionfor DEP's customers from potential construction costs delays for a $1 billion generationconstruction project, potential appellants are essentially attempting to argue thatthe law does not, or should not, somehow apply to them," Duke Energy Progresswrote in a May 2 response to the motion.

The DukeEnergy utility, which said its project could face $140 million in construction delaysfrom a two-year appeal process, also pointed out that NC WARN and The Climate Timesonly have to pay damages if the commission's order is affirmed upon appeal.

"Thus,the potential appellants have to assess the merits of their potential appeal,"DEP wrote. "If they believe their appeal will be successful, then they shouldhave no concern that they will be required to pay any damages pursuant to [statelaw]."

In addition,if there are no actual increases in construction costs tied to appeal delays, thenthe potential appellants should not be concerned about paying any damages, DEP added."At this point, the company has not definitely decided if it would delay beginningconstruction of the new combined cycle units in response to the potential appeal,or delay construction at some later point in the appellate process once an appealis actually filed, but the motions filed by the potential appellants have addedconsiderable uncertainty to the process," DEP wrote.

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.