NOTE TO EDITORS
August 5, 2009
Federal Regulators to Hear Appeal over Duke Energy Expansion Plans
Utility seeks to overturn state ruling, build Cliffside plant for outside customers
Statement from NC WARN Executive Director Jim Warren:
DURHAM, NC — Duke Energy has embarked on a complicated and potentially years-long effort to overturn a NC Utilities Commission ruling that effectively stifled the utility’s plans to expand its customer base beyond normal boundaries. The case involves Duke’s continuing attempts to justify construction of the Cliffside power plant by soliciting cities outside its monopoly service area.
In March, the NC Utilities Commission (NCUC) denied a wholesale contract that would have allowed Duke to sell electricity to Orangeburg, SC, because the deal would leave the company’s existing customers with rate hikes needed to build new power plants. The near-unanimous ruling sets an important precedent because during evidentiary hearings, Duke admitted it has been soliciting other cities and large users outside its service area; the total power used by those customers exceeds the net 600 megawatts Duke is constructing at its Cliffside plant.
The Federal Energy Regulatory Commission (FERC) will hear the appeal, which was technically filed by Orangeburg, although Duke is obviously supporting city attorneys. The NCUC is being represented by a private law firm and its own Public Staff. It is not yet clear whether Attorney General Roy Cooper is intervening, as his office does in most utility cases. NC WARN attorney John Runkle has filed what is formally known as a legal protest in the case.
With the appeal to FERC, Duke Energy and Orangeburg are seeking to overturn state authority. The Public Staff of the NCUC has recommended that commissioners penalize Duke for appealing various aspects of its ruling. And even as the FERC appeal moves forward, Duke and Orangeburg have appealed the original NCUC ruling in the NC Court of Appeals.
Meanwhile, Duke Energy continues seeking to add customers needed to justify those expansion plans. Although the NCUC directed Duke to remove Orangeburg from its long-range planning documents, the power company continues projecting an unidentified 500 megawatts in wholesale contracts. Removing that phantom demand will further kill the case for continuing at Cliffside.
Duke recently applied for rate hikes of up to 20 percent for current customers in order to fund Cliffside and other projects; the NCUC already approved 4.5 percent for rising coal prices.
NC WARN and 24 other nonprofits have appealed to the NCUC to overturn permission to build Cliffside based on multiple factors proving the plant is not needed — particularly Duke’s own long-term forecasts showing flat growth in energy demand.
We commend the Utilities Commission for holding the line against the Orangeburg deal. But now commissioners must connect the dots between Duke’s self-serving actions. It is neither fair nor lawful to allow Duke to build power plants on the backs of its customers so it can expand its sales area.
Climate Protection Through Energy Efficiency!