DURHAM, NC - 5/5/09


Environmentalists today called on the NC Utilities Commission to stop construction of Duke Energy’s Cliffside coal-fired power plant, saying several factors – individually – eliminate the need for the plant, and that 2007 state legislation requires the Commission to revoke permission to build it. They said lawsuits, rising costs, state clean energy requirements, and dynamic national trends all threaten the viability of the four-year construction project, already delayed by one year, and that any further spending should not be charged to ratepayers.

In his legal motion,* NC WARN attorney John Runkle says that on its own, last month’s Commission ruling against Duke’s efforts to sell electricity outside its service area eliminates the need for the plant. Duke has long insisted it must build the coal-burning unit due to urban growth in its territory, but the utility has continued to solicit large outside customers whose combined power usage far exceeds the net 600 megawatts being added at Cliffside.

Runkle told the Commission that the project, west of Charlotte, must now be deemed “imprudent” under state law, and that if Duke proceeds, corporate stockholders – not ratepayers – must absorb any additional expenditures. He said 2007 state legislation explicitly calls for the Commission to revisit, and to “modify or revoke”, permission to build new plants if a change of circumstances means that “completion of the generating facility is no longer in the public interest.” Therefore, he said, the Commission should revoke Cliffside’s Certificate for Public Convenience and Necessity.

NC WARN and supporting groups say the ruling adds to earlier evidence against justification for the plant, including:

- Duke’s customer demand in recent years has been far lower than projected – and the utility continues to reduce its forecasted growth for the next 15 years.

- Duke’s long-range projections use exaggerated reserve margins; if reduced to the level used by rival Progress Energy, this alone would negate the need for Cliffside.

- Industry data shows that southeastern utilities seek to build the equivalent of 50 large coal or nuclear plants in excess of regional needs so they can increase sales to other parts of the U.S.

- A new study of the utility’s data by Duke University professor emeritus John Blackburn found that the need for Cliffside – plus new nuclear plants – can be eliminated by modest increases in energy efficiency and cogeneration, along with renewable power at levels already required in North Carolina. The former economics department chair says this approach will generate thousands of jobs, plus allow retirement of 2,400 megawatts of Duke’s existing coal-burning plants – boosting efforts to reduce greenhouse emissions.

“The case for building Cliffside is stone-cold dead,” said Jim Warren of NC WARN today.

“Commissioner Robert Owens courageously agreed with us two years ago that it isn’t needed. Now the full Utilities Commission must protect the public from this high-dollar pollution machine by connecting the dots between the holes in Duke’s arguments.”

Plans for 97 coal-fired plants have been shelved since 2006 due to cost increases and the lack of carbon controls. Several rulings may apply to Cliffside, where federal and state appeals of pollution permits are pending based on mercury, particulate and greenhouse gas emissions. Lawsuits and regulatory changes are expected to continue raising the cost of coal-fired electricity, further fueling the transition to energy efficiency and renewable generation. Today NC WARN told the Commission:

- Over the life of the proposed Cliffside unit, the cost of carbon regulation alone will add $3 - 5 billion to the cost of the plant.

- Duke Energy paid 23 percent more per ton of coal in 2008 than in 2007, with coal transportation costs also rising substantially.

- Compounding the risks of the Cliffside unit are the increasing cost and volatility of Appalachian coal supplies.

- Regulatory proposals to eliminate the mining practice known as “mountain top removal” will raise the price of coal even further.

Construction of the 800 megawatt unit at its Cliffside plant began in February, 2008. Duke had planned on opening it in 2011 at a cost of $2.4 billion, but it’s been delayed until mid-2012. In a March report to the Utilities Commission, Duke didn’t disclose Cliffside’s costs to date, nor the extent to which fixed contracts protect against price escalation.

In response to accelerating climate change and rising energy prices, national trends are moving rapidly away from coal and toward clean, efficient energy. The top U.S. energy regulator now dismisses the need for new coal and nuclear plants, the Interior secretary says wind power alone might replace most existing coal-fired plants, and the State Department’s climate envoy is questioning the business judgment of companies building such plants.

Duke and its CEO, Jim Rogers, have become the target of a rising level of protests, including the April 20th arrest at company headquarters of 44 faith leaders, grandparents, activists and residents of Appalachia who say their communities are being blown apart by coal mining operations that feed Duke’s plants. Because the Charlotte-based utility is among the world’s largest carbon polluters, it is becoming a key battleground over global climate change.

"It is now crystal clear that Duke Energy does not need that plant, and it’s better to cancel now than in two years,” said June Blotnick of the Carolinas Clean Air Coalition, based in Charlotte. "The Utilities Commission must stop allowing Duke to waste customers' money while risking an environmental health tragedy. North Carolina wants to be part of the shift to clean energy."

##

* See the legal motion: http://www.ncwarn.org/docs/Motion_for_Cliffside_revocation_w_attachments_5-5-09.pdf