Duke Energy scraps SC nuke plant, seeks higher power rates

Duke Energy asked regulators Friday to let its western North Carolina subsidiary raise household electricity bills by 16.7 percent and make consumers pay billions of dollars for a nuclear plant it won't open and the cleanup of coal ash deposited in unlined pits.

The country's largest electric company asked the North Carolina Utilities Commission to let its Duke Energy Carolinas subsidiary raise rates by $647 million a year, adding $18.72 to the $104 monthly bill of the typical residential customer.

The electricity provider for 2 million North Carolina customers also wants to collect nearly $1.7 billion over five years to close all its pits storing the toxic ash from burning coal.

The Duke Energy Carolinas rate increase, its first in five years, would average 13.6 percent across all types of customers, including factories and retail stores.

Meanwhile, Duke Energy Progress, the operating subsidiary for eastern North Carolina, asked regulators in June to allow it to raise power bills by an average 15 percent for 1.3 million customers, totaling an extra $477 million a year. That would mean $18 more per month for the typical household bill of $105.

"We understand the impact of energy costs on our customers lives, just as we understand the importance of safe, reliable, affordable energy to power their lives," David Fountain, the North Carolina president for Duke Energy Carolinas, said in a telephone interview.

Duke Energy also said it is scrapping plans to build its proposed Lee nuclear plant in Cherokee County, South Carolina, but wants to charge North Carolina consumers nearly $640 million over 12 years for planning, licensing, financing and other costs. About 70 percent of the costs and future electricity allocation of the proposed Lee plant were intended for North Carolina consumers, with the rest bound for South Carolina customers.

"We have to plan our generation portfolio over decades and nuclear generation has been a real benefit to the state of North Carolina for decades," Fountain said.

In a separate filing Friday, Duke Energy admitted it blew past a $120 million cap the North Carolina regulatory commission set in 2011 for the state's ratepayers. Duke Energy Carolinas admitted it has incurred $332 million trying to build the Lee nuclear plant, and said it didn't need to clear with regulators that it was exceeding the cap.

The utility "respectfully asserts that is not required to request that the Commission review the Company's decision to incur project development cost," the company's filing said.

Considering how far along Duke Energy Carolinas was in the process of getting a federal operating license for the nuclear plant, it would have been unreasonable to suspend these efforts once the company hit the cap. Besides, Duke Energy said, it kept the commission informed in semi-annual reports, implying regulators had a chance to object before now.

David Drooz, the top state lawyer representing utility consumers, said his office would study the details of Duke Energy's arguments and take a public position later.

State regulators should carefully examine Duke Energy's bill for the Lee nuclear plant and push the company toward more use of renewable energy, said Peter Ledford, an attorney with North Carolina Sustainable Energy Association, an advocacy group.

"Lee Nuclear has never, and now will never, generate a single watt of electricity, whereas their investments in solar are providing ratepayers with consistent energy generation," he wrote in an email. "This clean and affordable resource does not have the same construction and fuel risks associated with coal, natural gas, or nuclear."

Charlotte-based Duke Energy's decision to scrap the Lee plant follows a related decision last month by two South Carolina utilities to quit trying to expand the V.C. Summer Nuclear Station after jointly spending nearly $10 billion. Like South Carolina Electric & Gas and Santee Cooper, Duke Energy blamed lead contractor Westinghouse for the nuclear project's failure. Westinghouse declared bankruptcy in March, scotching plans for the company to design and build the Lee plant, Duke Energy said.


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Information from: The Charlotte Observer, http://www.charlotteobserver.com