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$98M Bond Required from Duke Plant Protesters to Protect Ratepayers

July 13, 2016 By Cheryl Kaften

The North Carolina Utilities Commission has informed (Docket No. E-2, Sub 1089) two nonprofits – NC WARN and The Climate Times – that they must put up a $98 million bond for the right to appeal a power plant construction permit issued to Duke Energy Progress, according to a July 11 report by the local News & Observer.

The two advocacy organizations were set to intervene in the application of Duke Energy Progress for a Certificate of Public Convenience and Necessity to construct a 752-megawattt (MW) natural gas-fueled plant in the vicinity of Asheville, North Carolina.

However, in the Tar Heel State, a bond is required under the terms of a 1965 law intended to protect electric utility customers from any increased costs resulting from construction delays while a permit is under appeal.

To date, the bond provision has never been invoked in anyone’s recollection because power plant permits are not challenged after they are issued; the news outlet was told by James McLawhorn, director of the Electric Division of the Public Staff, the agency that represents the public in utility rate cases before the commission.

“The statute plainly places on the appealing party the financial risk of what potentially could be extensive additional costs,” the Utilities Commission said in its order. “Otherwise, these costs would be added to the cost of the generating facility to be recovered from consumers through higher rates.”

The commission issued the power plant approval in March, and Duke had planned to begin building the $1 billion natural gas power project in October. With the new plant in place, the utility said that it planned to retire and demolish its Asheville coal-fired power plant within four to five years.

The utility said the new plant must be operational before January 31, 2020, under deadlines set by the state legislature in the Coal Ash Management Act (2014) and the Mountain Energy Act (2015).

The two prospective interveners in the case – NC WARN, based in Durham, and Climate Times, based in Boone – had planned to challenge the permit in court.

On July 8, NC WARN Director Jim Warren commented, “By setting a $98 million bond … , the Utilities Commission again has wrongly attempted to block our access to the courthouse – and shield itself and Duke Energy from scrutiny over the approval of a new $1 billion power plant in Asheville that is unneeded, would rely on a shaky supply of shale gas, and would further speed the climate crisis.

“There is no precedent for requiring a bond to appeal a project when the appellant hasn’t asked to stop construction.” Warren added, noting, “Duke Energy and the commission seem desperate to avoid having an open, careful debate with the three prominent experts NC WARN and The Climate Times tried to bring into this case. We’ll be asking the North Carolina Court of Appeals to again reverse the commission’s bond order and allow our full appeal of Duke’s climate-wrecking, fracking gas power plant to go forward.”

Under the state law, NC WARN and Climate Times would have to cover Duke’s increased costs only if they lost their appeal. If Duke won the appeal, the amount of increased costs would be determined by the Utilities Commission, and the total could be less than the value of the bond.

The nonprofits have said that putting up millions of dollars would be financially ruinous for them.

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