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Palmetto Put on Hold as CP&L Examines Power Needs

Palmetto Put on Hold as CP&L Examines Power Needs

A change in the timing and location of North Carolina's power generation needs has forced Carolina Power & Light (CP&L) and Southern Natural Gas Co. to put a hold on their Palmetto Interstate Pipeline and consider other pipeline alternatives. The companies said yesterday they have suspended ongoing route selection and survey activities for Palmetto and are analyzing two competing pipeline projects.

"This is a major decision that will affect our service area for decades," said Tom Kilgore, CP&L senior vice president for Power Operations. "Since there are now three proposals to fuel our electric generation additions, we will thoroughly analyze the plans so that we pursue the most economical option for our long-term gas-supply requirements."

One competitor is the proposed Sundance lateral off of Transcontinental Gas Pipeline's mainline and the other is a proposed extension of Scana's South Carolina Pipeline into North Carolina. The $250 million Palmetto project would extend 175 miles from the terminus of Sonat's system in Aiken, SC, to an interconnect with recent CP&L merger partner North Carolina Natural Gas in Robeson County, NC. It is expected to have a capacity to transport about 300 MMcf/d.

"The proposed Palmetto Pipeline is a significant project for the region," Kilgore added. "Not only is the pipeline integral to CP&L's current energy plans, but to the development of energy infrastructure throughout the Carolinas as well. Delaying the planned in-service date makes good business sense as our overall resource plan continues to evolve. We want to synchronize as closely as possible our gas-supply plan with our plans to add electric generation over the next several years."

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

"CP&L is the anchor load on that pipeline with most of its generation coming on line in second quarter of 2002, but that may be no longer the case," said Sonat spokesman Bruce Connery. "They do not have a need in 2002 in the locations Palmetto was expected to serve."

Palmetto Pipeline is in the process of contacting landowners along the current route by mail regarding this decision. A Scana spokesman said yesterday the delay was good news for its extension project, which it feels could serve CP&L's needs at a lower cost than Palmetto.

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