Questions & Answers
- Why is Duke Energy Carolinas making this filing?
- What does Duke Energy Carolinas propose to build?
- Describe the company's plans to retire older, coal fired units.
- Why does Duke Energy need to build these plants?
- How do these plants fit with Duke Energy’s portfolio?
- Why build natural gas-fired combined cycle plants?
- How do you address concerns about natural gas price volatility?
- What is a combined cycle natural gas-fired plant?
- What is a simple cycle natural gas-fired plant?
- Will the new plants use fuel oil?
- What is included in the CPCN applications and testimony?
- What are next steps?
- What is the cost of these projects?
- Why is it important to capital cost estimates confidential?
- What type of workforce will be needed at each plant?
- How much electricity does Duke Energy Carolinas currently generate from natural gas turbine plants?
- If approved, when will these new plants be built?
- Describe the company's plans to retire older, coal fired units.
Q: Why is Duke Energy Carolinas making this filing?
A: Because Duke Energy Carolinas is a regulated utility, the company must demonstrate need for the resource and receive a Certificate of Public Convenience and Necessity (CPCN) from the North Carolina Utilities Commission before pursuing any new generation projects.
Q: What does Duke Energy Carolinas propose to build?
A: The company is requesting approval to construct two 620 megawatt combined cycle natural gas-fired plants – one in Rowan County, NC at the existing Buck Steam Station and another in Rockingham County, NC at the existing Dan River Steam Station. The units will provide intermediate level generation.
Q: Describe the company's plans to retire older, coal-fired units.
A: Duke Energy Carolinas is committed to reducing its carbon footprint. We will retire approximately 1,000 mw of older, less efficient coal units as new energy efficiency savings are achieved as part of the company’s commitment in the Cliffside proceeding and as part of our pending energy efficiency proposal in North Carolinas. As part of the buck and Dan River projects, the company will retire two, older coal units at each site. Dan River unit 1&2 and Buck units 3&4, are capable of generating approximately 247 megawatts of electricity.
Q: Why does Duke Energy need to build these plants?
A: Duke Energy Carolinas adds 40,000 to 60,000 new customers each year and electricity demand continues to grow. Our forecast shows a significant need for new power resources. Over the next 20 years we are aggressively pursuing more renewable technology, energy efficiency and demand side management programs in addition to baseload, intermediate and peaking generation.
Q: How do these plants fit with Duke Energy's portfolio?
A: The utility’s request is part of a comprehensive, long-term plan to add new generation, modernize the fleet, maintain a diverse fuel portfolio, and manage customer costs while delivering a high quality, reliable power supply.
Q: Why build natural gas-fired combined cycle plants?
A: The Buck and Dan River projects will enable Duke to meet customers’ needs beginning in 2010-2011 timeframe. When combined with the retirement of older, less efficiency coal-fired units, the projects offer a number of benefits, including:
- Additional capacity needed to meet growing demand
- Additional generation in the northern part of the Duke Energy Carolinas service area, addressing voltage concerns and load growth.
- Reduced net output of environmental emissions, including NOX and SO2
- New, efficient intermediate gas-fired generation added to the Carolinas portfolio
Q: How do you address concerns about natural gas price volatitlity?
A: There are a number of uncertainties as Duke Energy Carolinas plans ahead, including fluctuating fuel prices and potential carbon regulation. In either case, there is upward pressure on energy prices. Modeling shows significant additions of natural gas-fired generation is the least-cost option to meet customer demand for electricity..
Q: What is a combined cycle natural gas-fired plant?
A: A combined cycle generating facility uses a combustion turbine, heat-recovery steam generator, steam turbine and generator. Natural gas is burned in a combustion turbine to produce mechanical power that is converted to electric power by the generator. For increased efficiency, the hot exhaust gases resulting from this process are routed through the heat-recovery steam generator, which produces additional electric power via the steam turbine. The thermal efficiency of combined cycle plants is high and its operational flexibility is key to supporting intermediate load demand.
Q: What is a simple cycle natural gas-fired plant?
A: A simple cycle generating facility uses a combustion turbine and generator to convert natural gas energy to electrical energy. Natural gas is burned in a combustion turbine to produce mechanical power that is converted to electric power by the generator. A simple cycle plant is less efficient and used for peaking power needs and only operates in those peak period times.
Q: Will the new plants use fuel oil?
A: No, the new plants will use natural gas only. We evaluated duel fuel but oil is not economic for intermediate load generation. It works for peaking plants where you only have a few days in the year on oil.
Q: What is included in the CPCN applications and testimony?
A: Information about the sites including the preliminary site analysis, statement of need, technology evaluation, environmental considerations, natural gas and electric transmission interconnections, agency approvals, construction schedules and confidential cost estimates.
Q: What are next steps?
A: Also in December 2007 Duke Energy plans to file for an air quality permit for the Buck project with the North Carolina Division of Air Quality. A similar application will follow in approximately a year for the proposed new unit at Dan River. In the spring of 2008, the Utilities Commission is expected to schedule various hearings on the CPCN applications
Q: What is the cost of these projects?
A: Estimated cost information is being provided to the Commission and other intervenors who sign confidentiality agreements otherwise it is confidential. However, it is important to note that the selection of existing generation sites will keep construction and operating costs lower since some of the required infrastructure is already in place.
Q: Why is it important to capital cost estimates confidential?
A: Duke Energy continues to negotiate with vendors for labor and supplies on the Buck and Dan River projects and continues to evaluate purchased power opportunities for intermediate generation. In this highly competitive environment, our objective is to negotiate the best deal possible for our customers. Releasing cost information (beyond the Commission and intervenors) could compromise that process.
Q: What type of workforce will be needed at each plant?
A: The workforce at the start of construction will be approximately 50 people; it will increase to approximately 500 during the peak of construction. The plant will employ approximately 20 people full time during normal operation.
Q: How much electricity does Duke Energy Carolinas currently generate from natural gas turbine plants?
A: Currently Duke only operates simple cycle combustion turbine plants for peaking generation as below:
- Lincoln Combustion Turbine, Lincoln Co., N.C. – 1,200 MW
- Rockingham Combustion Turbine, Rockingham Co., N.C. – 825 MW
- Mill Creek, Cherokee Co., S.C. – 640 MW
- In addition, Duke Energy has 23 individual combustion turbine units in the Carolinas, totaling 584 MW, in five locations.
| Station | Units | Capacity | Commercial Operation |
|---|---|---|---|
| Buck | 3 | 93 MW | 1970 |
| Buzzard Roost | 10 | 196 MW | 1971 |
| Dan River | 3 | 85 MW | 1968 |
| Lee | 3 | 90 MW | 1968 |
| Riverbend | 4 | 120 MW | 1969 |
Q: If approved, when will these new plants be built?
A: Construction may begin as early as September 2008 for Buck and September 2009 for Dan River. Buck will begin operation in simple cycle mode with two combustion turbines in the summer of 2010, with full combined cycle operation in summer 2011. Dan River will begin operation in simple cycle mode with two combustion turbines in the summer of 2011, with full combined cycle operation in summer 2012 .
