By John Downey
N.C. WARN wants federal regulators to determine whether Duke Energy’sresistance to purchasing reserve power from other Southeastern utilities is costing customers billions of dollars for unnecessary plant construction.
And it wants the Federal Energy Regulatory Commission to consider ordering Duke and other utilities in the South to form a regional transmission organization to make it easier for them to share reserve power.
The utility watchdog group has filed a complaint with FERC contending that Duke and other utilities in the Southeast manipulate their markets by building unnecessary plants, driving up power costs. It asks for the commission to hold hearings on the issue in North Carolina and to use its authority to enforce its own guidelines, which call for regional power planning to reduce construction of unnecessary reserve capacity.
Excess reserves
Jim Warren, N.C. WARN’s executive director, contends that pliant utility commissions in the Southeast have allowed a balkanized system to evolve in which each utility builds all its own power reserves instead of purchasing reserves that could be available from neighboring utilities. That has led to a situation in which the Southeast as a whole has significantly more power plant capacity than is necessary, he argues.
And the filing makes the point that the North American Electric Reliability Corp. recommends utilities should have reserve capacity close to 15% above their annual peak demand. In eight Southeastern states — including the Carolinas — reserve capacity ranges from 24% to 37%, the complaint says.
“Utilities in the Southeast have dozens of plants standing idle for most the year, but they continue to build new, expensive plants,” Warren said in a conference call Tuesday. “These utilities exercise undue influence over their state regulators and customers are gouged with unwarranted rate increases.”
Duke Response
In a prepared statement, Duke calls N.C. WARN’s allegations “erroneous.”
The statement notes that Warren’s organization has frequently criticized Duke’s reliance on coal, but is now criticizing it for replacing coal with cleaner-burning natural gas plants.
“Unlike N.C. WARN, Duke Energy takes seriously its responsibility to provide reliable, dependable electricity to its customers,” Duke says. “That means supplying power to homes, schools, businesses and industrial plants during even the most severe weather, such as last winter’s record-setting Polar Vortex or previous summers’ record-setting heat.”
It disputes Warren’s contention that the plants are unnecessary and that Duke is exaggerating future demand in order to build plants that increase what it can charge customers.
