Nov 4 - McClatchy-Tribune Regional News - Bruce Henderson The Charlotte Observer, N.C.


The N.C. Utilities Commission today denied environmentalists' motion to revoke Duke Energy's permit to expand its Cliffside coal-fired power plant west of Charlotte.

The N.C. Waste Awareness and Reduction Network had challenged the commission's approval of the 800-megawatt expansion, which was granted in 2007.

The challenge is potentially important to Duke's 1.8 million N.C. customers because power plant construction costs are typically recovered through electricity rates.

WARN claimed that completing the project was no longer in the public interest. The need for the expansion, it said, is based on Duke's sales of wholesale power, not the electricity demands of its Carolinas retail customers.

Duke argued that there was no legal basis to revoke the permit, called a certificate of public convenience and necessity. Despite slumping demand for electricity, it said, the Cliffside expansion is still needed.

The utility commission's Public Staff, which advocates for customers, sided with Duke.

In denying the WARN motion today, the commission found there is a continued need for baseload power generation -- the workhorse electricity producers such as coal-fired plants. It noted that Duke had already invested $1.1 billion, through 2008, of the $1.8 billion construction budget.

The order also noted that, in building the new unit at Cliffside, Duke had agreed to retire older, dirtier boilers and invest 1 percent of its retail revenues in energy efficiency and demand-curbing programs.

The commission added, however, that today's order does not approve the Cliffside's costs in regard to rate-making. A proposal now before the commission would raise Duke's N.C. rates 8 percent over two years, in part to pay financing costs for the Cliffside project.

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