Leading from the Left

Wednesday, February 28, 2007

NC Warn Speaks up on Utilities Commission Decision

Following is a press release sent out by NC Warn on today's decision from the Utilities Commission regarding Duke Energy's Cliffside power plant proposal. They bring up some interesting points.

Ruling Could Spell End Of Cliffside Project Since Duke Energy Admits it’s Too Costly To Build Single Coal-Fired Unit

Commissions’ decision is flawed and ill-timed, but could end the project anyway


In light of looming economic uncertainty and a top U.S. climate expert’s warning yesterday, against building coal-fired power plants, today’s NC Utilities Commission permission for Duke Energy to build one out of two large coal-fired unit at Cliffside is badly misguided.

Nevertheless, this should be the end of the project since Duke admitted it cannot build economically just one coal-fired unit. If Duke tries to proceed with a single plant, it would fail the state’s “least cost” requirement even more than did the two-units when compared to other generation scenarios – and especially energy efficiency. Also, because 75% of the project’s pricing has not been firmed up, there is a strong likelihood of continuing price hikes – and the public will be demanding to know what they are.

Due to extremely volatile construction and coal markets, it’s uncertain whether Duke could ever complete this project. If Duke Energy can be taken at its word, it should be ready now to scrap the project, stop blocking the way and let North Carolina get on with the vital business of cutting greenhouse gases by ramping up proven energy efficiency programs. If it proceeds at Cliffside, it faces continuing legal and public opposition.

To the extent the Commission’s full order will require Duke to spend millions on efficiency programs is enforceable, this adds to the likelihood the Cliffside project is over. It’s clear that Duke cannot comply, and has no intention of genuinely pursuing efficiency, despite its corporate PR. Energy-saving programs conflict with Duke’s business model of maximizing sales of electricity. Also, Duke has no expertise in efficiency.

Moreover, a full committing toward efficiency could threaten the financial viability of the Cliffside project, especially in the event of economic downturn. For this state to fully pursue efficiency programs requires a third party administrator such as the State Energy Office.

Given that it would take many months for Duke to obtain a pollution permit, it’s unfortunate the Commission allowed its order to be pushed by Duke Energy’s dubious deadline – without requiring Duke to complete the necessary work to evaluate energy efficiency programs and complete pricing for the majority of the project. In its forthcoming full order, the Commission should require new cost estimates based on the single unit, and another evaluation of the “least cost” standard.

As reported by AP yesterday, “One of the world's top climate scientists [James Hansen] called for an end to building new coal-fired power plants in the United States because of their huge role in spewing out greenhouse gases that contribute to global warming.”

We appreciate the courage and clarity that Commissioner Owens showed in opposing business as usual and the power of Duke Energy in these extraordinary times. We look forward to working with the Commission and utilities to restructure the rate system so that Duke and Progress no longer need to block the advancement of renewables and efficiency programs.