by John Downey
North Carolina’s power companies outlined their long-term planning and resource proposals for the N.C. Utilities Commission this week. But commission Chairman Ed Finley had his own proposal for them — get serious about joint construction of nuclear plants.
Duke Energy Carolinas and Progress Energy Carolinas both plan to build nuclear plants in the next 10 years or so. And each identifies those plants as key to meeting customer demand while also reining in carbon emissions.
But the costs of building those facilities could total $11 billion or more. And that would be more than the market value of either investor-owned utility.
That’s true for just about every utility in the country, which has prompted some industry observers to call nuclear plants a “bet-the-farm” investment for power companies.
Finley appears uncomfortable with that kind of risk.
Tough questions for Progress
During the utilities’ presentations Tuesday in Raleigh, he had some pointed questions for Progress executives. Finley noted Duke’s long-term plan talks at length about the possibility of regional cooperation on nuclear power plants. What, he asked, was Progress’ position?
Progress executives noted they had mentioned that possibility in their plan as well. Still, Finley pointed out that, at current construction prices, even a single 1,100-megawatt nuclear generator of the sort Progress and Duke propose would cost $5.5 billion.
Said Finley: “Duke talks about joint plants, so you wouldn’t have to build them all at one time. You could share the costs. You could space them out. What’s (Progress’) reaction to that?”
Progress executives said it was something they could consider. Finley jumped in. “Well, it sounds like a good idea to me,” he said. “And I hope you and Duke and others will pursue that.”
Impact on Lee plant?
Ellen Ruff, appointed head of nuclear strategy for Duke Energy Corp. last year, says Duke, Progress and others have been looking to cooperate on nuclear-power projects. And she thinks regional agreements could be worked out quickly enough to affect Duke’s plans for its proposed Lee Nuclear Station near Gaffney, S.C.
That plant is expected to start operating in 2021. But Duke clearly wants to have a partner or partners for the project, and those will need to be lined up soon. It would make sense, Ruff says, to include the Lee facility in a regional plan.
“We could see something, if not immediately, then in the next year or so,” she says.
Barriers remain, Ruff acknowledges. The key one would be to change North Carolina law to make it easier for companies to recover the costs of building nuclear plants.
But also, she says, legislation may be needed to allow for nuclear plant ownership by organizations set up for that purpose by utilities. Those discussions are under way, Ruff says.
Opponents target coal operations
Renewable energy, energy efficiency and carbon emissions were the hot topics in presentations made by the utilities Tuesday.
Economist and former Duke University professor John Blackburn testified on behalf of the N.C. Waste Awareness and Reduction Network. He presented a proposal in which he contends Duke and Progress could shut down essentially all of their coal plants by 2029. And he said they would not need to build nuclear plants to replace the coal-burning operations.
Blackburn wants N.C. utilities to significantly step up their efforts on energy efficiency, increasing the amount of energy saved by such programs by 1.5% per year. He also recommended that N.C. regulators encourage greater use of cogeneration of electricity by industrial customers who use large boilers and other major heat sources, and that the state increase its renewable-energy requirements.
Blackburn provided no estimate of what that would cost. And Len Anthony, representing Progress, questioned how the utilities could make sure their customers save significantly more energy or that businesses build cogeneration units.
David Schlissel of Schlissel Technical Consulting Inc. testified for several environmental groups. He said Duke won’t cut its carbon output over the next 20 years, despite closing many old coal plants, because of emissions from its Cliffside Steam Station expansion. That unit is slated to start operating in 2013.
Critics off base, Duke says
Robert McMurray, Duke’s director of integrated resource planning, disputed Schlissel’s analysis. He said Schlissel failed to take into account that several less-efficient coal plants that will remain in service will operate less often once the new Cliffside unit starts generating power.
McMurray didn’t directly say less carbon would be released into the air. But he said the emissions for every megawatt of energy produced will drop 30% once Cliffside and two new natural gas plants begin operating.
He also said the increase Schlissel cited includes about 1,800 megawatts of capacity Duke will supply for new wholesale customers. He said those customers already buy that energy from someone else. And those suppliers emit carbon.
A contract to sell power to five cooperatives in Upstate South Carolina accounts for most of Duke’s anticipated increase in its wholesale business.
At the contract’s peak, Duke will sell 1,100 megawatts of capacity to those cooperatives annually.
But McMurray also said Duke sees a good chance of signing additional wholesale contracts for about 750 megawatts of capacity over the next couple of years.