Carolina Power and Light (CP&L) scaled back its plans toserve the budding electricity load in North Carolina yesterday byannouncing the replacement of its $175 million interstate PalmettoPipeline proposal with a $100 million 82-mile intrastate pipelineproject. The integrated energy company plans to build the new pipebetween Iredell and Richmond counties to serve an electric powerplant soon to be under construction. If CP&L gets its way, thenew pipe will be in service by the spring of 2001.

Tom Kilgore, CP&L’s senior vice president for poweroperations, said the Iredell-Richmond pipeline meets the company’sgoals of reliability and cost- efficiency. “Our objective, in thisproject, and in all that we do, is to achieve the safest and mostefficient means of providing reliable service to our customers,”Kilgore said. “This plan accomplishes that goal and will provide along-term, expandable gas supply to fuel much-needed electricgeneration.”

CP&L said it filed a notice earlier this week with the stateUtilities Commission, indicating the company’s intent to build thepipeline, which will provide gas for CP&L’s power plant inRichmond County south of the town of Hamlet. Ground will be brokenat the plant site in early 2000.

The proposed pipeline will extend from Williams Energy’sTranscontinental interstate pipeline in Iredell County to theRichmond County tract where CP&L currently maintains anelectric transmission substation. The 30-inch-diameter pipelinewill have an initial capacity of 200 MMcf/d with a total capabilityof 700 MMcf/d. It is scheduled to be completed during the spring of2001 to coincide with the start-up of the Richmond County powerplant. The site will be expanded to accommodate construction ofadditional natural gas-fueled combustion turbine generation after2001, CP&L said.

If it passes the customary environmental approvals, the newpipeline is expected to be located along an existing North CarolinaNatural Gas (NCNG) pipeline corridor in portions of Iredell, Cabarrus,Mecklenburg, Stanly, Anson and Richmond counties. It will deviate fromthe NCNG system for about 11 miles in Richmond County to avoidresidential and commercial areas near Rockingham. CP&L purchasedNCNG in the fourth quarter of last year (see Daily GPI, Nov. 12, 1998). The project does not needFERC or state commission approvals.

The new pipeline project replaces a plan for the 175-mile PalmettoPipeline that CP&L and Southern Natural Gas had beenassessing. That joint venture, announced in March, would have entailedbuilding a pipeline from Aiken County, S.C., to Robeson County,N.C. When initially proposed, the project met stiff competition fromcompeting projects pursued by Scana Corp. and Williams Transco (seeDaily GPI, March 4). While the otherprojects are still in various levels preliminary work, the Palmettoproject was halted in August as the companies assessed other options.

Steven Hughes, a CP&L spokesman, said this new project willnot compete with the Scana and Transco projects. “We will own 100%of the capacity on this pipe and the gas will serve CP&L powerstations. There is no plan at this time to open the pipe to theretail market.”

Transco, however disagreed. Its Sundance Pipeline project aimsto serve the same power market, said Transco spokeswoman PaulaDelaney. “We’re still going ahead with Sundance,” she said. “Andwe’d really like to serve those power plants.”

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

In related news, CP&L is moving ahead with plans to developa transmission system along with the Albermarle-Pamlico EconomicDevelopment Corp. (APEC) for 14 currently unserved counties inNortheast North Carolina. The energy company and APEC filed for$186 million of a $200 million state bond package that thegovernment offered to entice companies to build a transmissionsystem in the region last month. Five other companies have alsoexpressed interest in the bond package proposal.

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