Duke Energy sees slower demand growth but says it needs more new power plants

Charlotte Business Journal, October 20, 2015

Duke Energy’s latest long-term plans for the Carolinas show the company expects power demand to grow more slowly than previously projected. But plans still call for building more new generation than it did a year ago.

Critics contend Duke (NYSE:DUK) manipulated the calculation of how much reserve power it will need over the next 15 years to justify unnecessary plant construction. Charlotte-based Duke contends the larger reserves are necessary.

The latest projections are included in the Integrated Resource Plan for Duke’s two Carolinas utilities. The IRP is a report submitted annually to regulators in both states to lay out, in a general way, what the utilities see as their needs and expectations for power supply over the coming 15 years.

Utilities are required to have reserve margins in their power supply to ensure power is available in case of unexpected outages. In the Carolinas, utilities determine those margins, but their calculations must be approved by the N.C. Utilities Commission and the S.C. Public Service Commission.

Suspicious timing

For 2015, Duke Energy Carolinas and Duke Energy Progress have proposed reserve margins of 17%. That is up from 14.5% in 2014.

Jim Warren, executive director of the environmental advocacy group NC WARN, says the timing of Duke’s decision that reserve margins should increase is suspicious.

“Demand is down, and we’ve complained for some time that there is a glut of juice available in the Southeast,” he says. “What better way to claim under these circumstances that you still need to build new plants than to inflate the reserves needed and claim you need a boost in standby power.”

Duke spokesman Randy Wheeless says there is no manipulation. The two Duke utilities commissioned a new study of reserve margins that showed the need for additional capacity.

One key consideration, he says, is that the utilities now find themselves in what had once been the unusual situation for Southeast utilities of hitting the highest demand of the year in the winter months rather than in the summer months.

“When you start peaking in the winter, some resources for responding to those peaks are not available as they would be in the summer,” he says.

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Regional Coordination and Markets: Key to a Renewable Energy Future

Switchboard: National Resources Defense Council Staff Blog, July 23, 2015

In the Western U.S. a major change in how the electrical system is operated is underway. It is driven by economics, environmental policy, and system reliability concerns. This change, from a balkanized, inefficiently operated grid to a coordinated, consolidated grid may just be the key to our renewable energy future.

We have heard much recently about California’s ambitious new climate and renewable energy goals. In his 2015 State of the State address, Governor Jerry Brown listed three main goals to be accomplished within the next 15 years: First, increase the amount of electricity the state derives from renewable sources from one-third to 50 percent. Second, reduce petroleum use in cars and trucks by up to 50 percent. Third, double the efficiency of existing buildings and make heating fuels cleaner.

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Report on viability of Underground Lines published by Edneyville Community

Edneyville Community has published a paper reviewing underground options for the transmission line.

Read the report: High Voltage Transmissions Lines in Henderson County: Can They be Put Underground?

From Hendersonville Lightning:

The group decided to independently study the cost and viability of running underground lines, she said. “There’s just so much misinformation out there,” she said.

Although Duke contended it had not run underground lines, she cited an October 2013 article “by two of Duke’s senior engineers” in the trade journal Transmission and Distribution World that describes an underground transmission line installation that Duke completed that year. “This line, the Barnard Creek-Town Creek 230-kV underground line, is the same voltage as the line now proposed to be run overhead through Henderson County,” the report said.

Read more in the Hendersonville Lightning

8/26/2015 UPDATE:

Just this month (8/18/2015) it was announced that Northern Pass officials unveiled a new project route Tuesday that buries an additional 52 miles of the 192 mile transmission line under state roadways. As reported in the Concord Monitor[1] (NH):

The company also announced a multimillion-dollar fund to invest in communities that host the project and a plan to direct a portion of the line’s hydropower to New Hampshire consumers.

But in order to bury more of the 192-mile line that would run from Pittsburg to Deerfield, the company had to scale back the size of the project from 1,200 megawatts to 1,000 – still enough to power 1 million homes.

Even though Northern Pass officials had previously said that burying more of the electric transmission line would send costs skyrocketing, a top Eversource Energy executive said Tuesday the project is still estimated to cost $1.4 billion.

Furthermore, the article stated that “Some had complained the project wouldn’t directly benefit New Hampshire, and instead feed power-hungry states to its south.”

[1] http://www.concordmonitor.com/news/18231021-95/northern-pass-proposes-52-more-miles-of-buried-lines-for-project

Hydro Electric Power may be an option for WNC

While Duke Power continues to insist that their plan for a new natural gas plant near Asheville plus miles and miles of invasive transmission lines is the only solution for western North Carolina’s energy needs, could there be an alternative?  MountainTrue has had some early discussions with Brookfield Renewable, the company that owns several hydropower dams in Graham County and eastern Tennessee.  While this is not necessarily an immediate solution to strengthening North Carolina’s energy infrastructure, why isn’t Duke Power even looking into alternatives like this?

Brookfield Renewable had this to say:

There are 380 MW of hydro power in Western North Carolina and East Tennessee owned by Brookfield Renewable Energy Group that are not currently under contract and are available to Duke Energy for purchase to help meet the energy needs of this region.  This significant renewable energy source should be part of Duke’s analysis as to whether their proposed gas plant and transmission lines are really needed.  Duke should seek the meet the energy needs of this region first with existing renewable energy generated in our own region and then through additional investments in energy efficiency and renewable energy in order to minimize the community and environmental impacts of their proposed “modernization” plan.

Shouldn’t Duke Power at least look into the possibility of using these existing hydro power options?  Are there more options that Duke hasn’t considered that would be less invasive and destructive to western North Carolina?  This is why we need more hearings, more information, and more answers.