A change in the timing and location of North Carolina’s powergeneration needs has forced Carolina Power & Light (CP&L)and Southern Natural Gas Co. to put a hold on their PalmettoInterstate Pipeline and consider other pipeline alternatives. Thecompanies said yesterday they have suspended ongoing routeselection and survey activities for Palmetto and are analyzing twocompeting pipeline projects.

“This is a major decision that will affect our service area fordecades,” said Tom Kilgore, CP&L senior vice president forPower Operations. “Since there are now three proposals to fuel ourelectric generation additions, we will thoroughly analyze the plansso that we pursue the most economical option for our long-termgas-supply requirements.”

One competitor is the proposed Sundance lateral off ofTranscontinental Gas Pipeline’s mainline and the other is aproposed extension of Scana’s South Carolina Pipeline into NorthCarolina. The $250 million Palmetto project would extend 175 milesfrom the terminus of Sonat’s system in Aiken, SC, to aninterconnect with recent CP&L merger partner North CarolinaNatural Gas in Robeson County, NC. It is expected to have acapacity to transport about 300 MMcf/d.

“The proposed Palmetto Pipeline is a significant project for theregion,” Kilgore added. “Not only is the pipeline integral toCP&L’s current energy plans, but to the development of energyinfrastructure throughout the Carolinas as well. Delaying theplanned in-service date makes good business sense as our overallresource plan continues to evolve. We want to synchronize asclosely as possible our gas-supply plan with our plans to addelectric generation over the next several years.”

CP&L is rethinking the location and timing of several powerprojects, but its plans to add about 7,000 MW of gas-firedgenerating capacity by 2010 have not changed. That total includesplans to build up to seven combustion turbine generators at sitesin Richmond and Rowan counties to be operational in 2001 and 2002.

“CP&L is the anchor load on that pipeline with most of itsgeneration coming on line in second quarter of 2002, but that maybe no longer the case,” said Sonat spokesman Bruce Connery. “Theydo not have a need in 2002 in the locations Palmetto was expectedto serve.”

Palmetto Pipeline is in the process of contacting landownersalong the current route by mail regarding this decision. A Scanaspokesman said yesterday the delay was good news for its extensionproject, which it feels could serve CP&L’s needs at a lowercost than Palmetto.

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