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NC Law to Help Duke Energy Replace Coal-Fired Plant With NatGas

North Carolina Gov. Pat McCrory signed a bill into law designed to help Duke Energy convert one of its coal-fired power plants in the state to natural gas, as the power giant moves forward with plans to excavate coal ash from 24 sites across the Carolinas.

McCrory signed SB 716 into law on Wednesday. The bill directs the North Carolina Utilities Commission (NCUC) to expedite, under certain conditions, any application for a certificate of public convenience and necessity to construct a generation facility that uses natural gas as its primary fuel. Specifically, NCUC must render a decision within 45 days of the application.

SB 716 also cut Duke a break by modifying the Coal Ash Management Act of 2014. The act originally required the company to close coal ash impoundments at its Asheville Steam Electric Generating Plant, plus impoundments at three other unspecified facilities, by Aug. 1, 2019. But the new law extends the deadline by three years -- to Aug. 1, 2022.

Duke plans to spend $1.1 billion on converting the Asheville plant, located in Buncombe County, to natural gas. It will retire a 376 MW coal-fired power plant within four to five years, then invest approximately $750 million to build a 650 MW natural gas-fired power plant, with some solar generation on-site as well. An additional $320 million will be spent on a new transmission substation near Campobello, SC, and 40 miles of transmission line.

Earlier this month, Duke said it had received the necessary permits from North Carolina for a third-party vendor, Charah Inc., and its subsidiary, Green Meadow LLC, to begin excavating coal ash from three sites -- including Asheville -- and transport it to lined landfills in Chatham and Lee counties for storage.

In a separate announcement last Tuesday, Duke said it was increasing the number of coal ash basins it would excavate and close to 24. Most of the sites are in North Carolina, but a few are in neighboring South Carolina.

Duke and state lawmakers have been focused on the issue of coal ash disposal since February 2014, when a stormwater pipe under a coal ash basin at the utility's Dan River Steam Station near Eden, NC, ruptured and caused a spill into the Dan River.

In response to the spill, the North Carolina General Assembly passed SB 729, also known as the Coal Management Act of 2014. Among other things, the law bans construction of new coal ash pits or the expansion of existing ones, and requires Duke to close and remediate certain coal ash pits, including Asheville, by Aug. 1, 2019. It became law without the governor's signature last September.

The Coal Management Act of 2014 also gave Duke until Dec. 31, 2029 to close the rest of its coal ash pits. Several environmental groups filed a lawsuit over the deadline, but on June 11 the North Carolina Supreme Court ruled in favor of the utility.

Duke said that at today's natural gas prices, it projects it will be about 35% less expensive to operate a natural gas-fired plant at Asheville, compared to the existing coal-fired plant. The utility also estimates sulfur dioxide emissions will be reduced 90-95%, nitrogen oxide emissions will decline 35%, and carbon dioxide emissions will be reduced by about 60% per MWh.

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