NGI The Weekly Gas Market Report / NGI All News Access

CP&L Replaces Palmetto With New Project

CP&L Replaces Palmetto With New Project

Letting no grass grow under the feet of its newly-created Carolinas empire, Carolina Power and Light (CP&L) got a jump on competitors by shortening both the length and the lead-time of its proposed interstate Palmetto Pipeline project and turning it into an intrastate. The pricetag on the project drops from $175 million to $100 million and it will run 82 miles (instead of 175 miles) along the right-of-way of now-integrated North Carolina Natural Gas to a new power plant being developed by CP&L. It will require no federal or state certification.

The new pipe will run between Iredell and Richmond counties to serve an electric power plant soon to be under construction. If CP&L gets its way, the new pipe will be in service by the spring of 2001.

Tom Kilgore, CP&L's senior vice president for power operations, said the Iredell-Richmond pipeline meets the company's goals of reliability and cost- efficiency. "This plan accomplishes those goals and will provide a long-term, expandable gas supply to fuel much-needed electric generation."

CP&L said it filed a notice earlier this week with the state Utilities Commission.

The proposed pipeline will extend from Williams Energy's Transcontinental interstate pipeline in Iredell County to the Richmond County tract where CP&L currently maintains an electric transmission substation. The 30-inch-diameter pipeline will have an initial capacity of 200 MMcf/d with a total capability of 700 MMcf/d. The project does not need FERC or state commission approvals but will have to meet environmental regulations.

It is scheduled for completion during the spring of 2001 to coincide with the start-up of the Richmond County power plant. The site will be expanded to accommodate construction of additional natural gas-fueled combustion turbine generation after 2001, CP&L said.

CP&L purchased NCNG in the fourth quarter of last year (see NGI, Nov. 16, 1998).

The new pipeline project replaces a plan for the 175-mile Palmetto Pipeline that CP&L and Southern Natural Gas had been assessing. That joint venture, announced in March, would have entailed building a pipeline from Aiken County, SC, to Robeson County, NC. That project met stiff competition from projects pursued by Scana Corp. and Williams Transco (see NGI, April 19), which are still in various levels preliminary work.

Steven Hughes, a CP&L spokesman, said this new project will not compete with the Scana and Transco projects. "We will own 100% of the capacity on this pipe and the gas will serve CP&L power stations. There is no plan at this time to open the pipe to the retail market."

Transco, however disagreed. Its Sundance Pipeline project aims to serve the same power market, said Transco spokeswoman Paula Delaney. "We're still going ahead with Sundance," she said. "And we'd really like to serve those power plants."

CP&L has announced significant expansions into the natural gas industry in recent months, with plans to add 4,000 MW of natural gas-fueled electric generation by the end of 2002 and 7,000 MW by 2010. That represents a 70% expansion in its electric generation system from the current level. In addition to generation sites in Richmond and Rowan counties, CP&L is building natural gas-fueled power plants at two existing CP&L coal-fired power plant sites, in Wayne and Buncombe counties. CP&L will continue to assess sites in the Carolinas for future power plants.

In related news, CP&L is moving ahead with plans to develop a transmission system along with the Albermarle-Pamlico Economic Development Corp. (APEC) for 14 currently unserved counties in Northeast North Carolina. Last month, the energy company and APEC filed for $186 million of a $200 million state bond package the state government had previously offered to entice companies to build a transmission system in the region (see NGI, April 12). Five other companies have also expressed interest in the bond package proposal.

John Norris

©Copyright 1999 Intelligence Press, Inc. All rights reserved. The preceding news report may not be republished or redistributed in whole or in part without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus