State Senator Tom Apodaca (R) and Robert Sipes, General Manager for Duke Energy’s western zone, discussed Duke Energy’s revised Western Carolinas Modernization Plan with a crowd of local business leaders at a meeting of the Council of Independent Business Owners on Nov. 12.
Senator Apodaca quipped that recent events involving Duke Energy have been superlative in two ways: first, in his 14 years in office, “this is the only time I’ve been in North Asheville for a meeting at 7 a.m.”; second, the high-voltage transmission lines Duke originally proposed created the “the hottest political issue I’ve seen in my tenure. At least 95% of the people in Hendersonville were upset, and the other 5% joined in because that seemed to be the thing to do.”
“We are growing,” continued Apodaca, “whether some people want to believe that or not… We are growing and we need stable, consistent power.” He thanked Duke for listening, and for being open during the process of receiving public input.
Sipes described his area of responsibility as being any place in the mountains of Western North Carolina served by Duke Energy. He is also responsible for the Western Carolinas Modernization effort. “The thing I’m most proud about,” Sipes said, referring to the modernization plans, “is that we listened. And we took action. We went back to the drawing board to figure out how can we do this in the way that has the least impact on the communities affected by it, but that also makes sure that we can fulfill our commitment to this area of providing safe, reliable and affordable electric service.”
Duke Energy will retire the coal-fired generation plant at its Lake Julian power station in 2020. To replace that capacity, Sipes explained, the utility now plans to construct two 280 megawatt (MW) units. If one goes down, the other will provide backup power. The utility can bring in 280 MW though its existing transmission infrastructure, eliminating the need for new transmission lines.
The previous plan had included a single 700 MW generator. In the case of that unit going offline, Duke needed the capacity to bring in a larger amount of additional power than its current lines can support.
The generators will burn natural gas, but they can also run on oil if the natural gas supply experiences a temporary interruption.
A PSNC-owned existing natural gas pipeline that runs from Kings Mountain will supply the plant. PSNC has entered into an agreement with Duke to increase the capacity of the pipeline.
To ensure the stability and reliability of the power grid, Sipes said, Duke will continue its ongoing efforts to improve its infrastructure. These efforts include upgrades to transmission lines in existing Duke Energy rights of way, as well as the development of new transmission and distribution substations around Asheville.
Duke’s new plan contains some non-traditional aspects. A utility-scale solar generation facility will be built on the Lake Julian site in the area presently occupied by coal ash ponds. The solar plant can’t be built until all of the coal ash has been removed from the site, meaning that 2020 is the earliest construction can begin. Upon completion, the facility will generate a maximum of 10 MW, depending on the land area that is suitable for that use after coal ash removal.
If the area’s energy needs continue to grow over the next few years, Duke will build an additional 190 MW peaking unit (which will be used only during periods of highest demand). However, “We don’t have to build that plant if we can find other ways to reduce demand between now and then,” explained Sipes.
“It won’t be easy,” Sipes cautioned, “but we are committed to working together with the community toward the goal of reducing demand.”
Duke Energy will file a Certificate of Need in January 2016 with the North Carolina Utilities Commission. Because of a streamlined process championed by Apodaca, approval could come within 45 days, according to Sipes. After that, Duke will move forward with design and construction.
The cost of the revised proposal, Sipes said in response to a question from the audience, will be about $1.1 billion, the same as the expected cost of Duke’s previous plan. That figure includes the peaking plant, so costs could go down if successful demand reduction efforts delay the need for the additional generator.
Because natural gas is 40% less expensive than coal, the net cost of the modernization project is neutral for rate payers. Sipes said that rates will not rise as a result of Duke’s investment in the new facility.
The WNC region, Sipes insisted, is a net importer of power. The region produces an average of 376 MW per day. Duke has the ability to generate up to 500 MW here using oil as a fuel source, but it is not, according to Sipes, the most economical option. Since peak demand reached 1,200 MW on some days last year, the gap between what the region could produce and what it required had to be brought in from elsewhere.
“I’m sure on some days it’s flowing the other way,” Sipes conceded.
Speaking after the meeting, Apodaca said he expects Hendersonville to follow Asheville’s recent lead in establishing a framework for a working relationship with Duke Energy. [For Mountain Xpress’ article on Asheville’s Community Clean Energy Policy Framework, click here.] The senator is also on board with demand reduction efforts: “As far as I’m concerned, the more we conserve, the better.”
Although Duke Energy’s revised plan is not as robust as its predecessor, and does not carry the region as far into the future in terms of meeting potential energy demands, Sipes feels good about the solution he and his team have come up with. “This new plan gives us a lot of flexibility. The way we generate and provide power is going to change dramatically over the next five, ten or 15 years,” he concluded.