Fast-track plant approval leads to regulatory sausage-making as Duke Energy now seeks $240 million bond if case goes to Court of Appeals

In one of the strangest regulatory cases in state history, a 45-day rubber-stamp approval of a $1.1 billion gas-fired power plant in Asheville has been swamped by the subsequent 120-day battle over our right to appeal the pro-utility regulators’ ruling, a fight with no end in sight.  Late yesterday NC WARN and The Climate Times filed an expert’s affidavit rebutting each point of Duke Energy’s recent call to escalate the appeal bond to $240 million.

 

 

Duke upped the bond request during a hastily called June 17 hearing at the NC Utilities Commission, where corporate officials also warned the regulators that Duke will surely delay construction of the large shale-gas fired power plant for up to two years if the groups’ appeal moves into the courthouse.  That hearing was called after the NC Court of Appeals agreed with NC WARN and TCT that neither Duke nor the commission provided support for the regulators’ order for a $10 million appeal bond.

A previously unused 1963 law allows the commissioners – whose very plant approval is being appealed – to require a bond before any party can challenge its decision in court.  NC WARN and TCT argue that no bond is allowed because the groups have not asked the court to delay construction of the plant.  We also maintain that if Duke is so uncertain about its case for the plant, its shareholders should bear the risk of such a project.

The frustrating irony is that we repeatedly pressed the commission to require Duke to openly make its case for the plant during the original proceeding.  But the commission bypassed the normal quasi-judicial process and approved the plant in 45 days without cross examination of Duke officials and while disregarding our three expert witnesses.

As attorney John Runkle insisted on June 17, the commission continues to abuse its authority in this case, including that day’s hastily called hearing, by favoring Duke over its critics.

Among the points countering Duke’s $240 million bond claim, by our witness, engineer Bill Powers: 

>In a twist of fate, Powers repeats his key argument that the commission refused to consider during the fast-track approval: that Duke can and should close its small Asheville coal units without new plants built.  Regional over-supply of generation – and sufficient power lines connecting those plants to Asheville – eliminate Duke’s ludicrous claim that, if the new plant is delayed, it would have to spend $100 million to control air and water pollution from the old coal units.

Duke’s claim that it must have new plants in Asheville – versus our claim there is a regional oversupply – is a straightforward math issue that should have been aired before plant approval.  It remains obvious that Duke could not afford to allow that math to be debated in a fair proceeding.

> Duke provides no support for its claim that it could suffer $50 million in increased project costs due to annual cost escalation.  In fact, as Powers points out, the current trend in plant construction costs is downward.  As he says, “A 20-month delay may in fact save Duke substantial money on the construction cost” of the Asheville project.”   

> Duke’s claims that development costs already spent and the cost of cancelling contracts the utility has already signed should be counted toward the bond amount are invalid.  NC WARN and TCT have followed all of the necessary steps to move an appeal forward since the commission’s ruling on March 1st.  Any costs of Duke’s decision to proceed with the project while an appeal is pending should fall on corporate shareholders, not on customers or critics attempting a valid appeal.

In approving the huge gas-fired power plant, the Utilities Commission ignored – and allowed Duke to ignore – affidavits from technical experts arguing that the plant is not needed, that the future supply and price of gas are highly risky, and that the plant would amplify greenhouse emissions at the worst possible time for the intensifying climate crisis. 

Duke Energy is planning to build up to 15 large gas-fired power plants in the Carolinas, attempting to build a large pipeline into North Carolina from the shale gas fields to the North, and hoping to merge with Piedmont Natural Gas – a collective investment that could exceed $25 billion.

NC WARN and The Climate Times believe Duke will seek similar, fast-track approvals for future gas-plant construction projects.