Duke plans to retire Asheville coal plant, replace with natural gas

ASHEVILLE — Duke Energy Progress announced plans Tuesday to shutter and eventually demolish its 51-year-old, coal-fired plant at Lake Julian, opting instead to rely on natural gas to meet a growing demand for electricity.

If granted state approval, the natural gas facility could be online by 2020 and would be built on Duke property near the existing plant. That facility currently is able to produce 376 megawatts of power. The new plant could generate 650 megawatts.

Solar arrays also would be added to the site and would sit over land now home to coal ash ponds once those areas are properly remediated, Duke officials said.

The solar capacity will be determined when officials can calculate how much flat land is available.

The project carries an estimated $1.1 billion cost, with $750 million going toward the new plant and solar arrays and $320 million to a transmission substation and related infrastructure in Spartanburg County, South Carolina.

A new 40-mile transmission line would connect the natural gas plant to that substation, converting high-voltage energy to low-voltage energy.

The company will not be asking for economic incentives or tax breaks, said Lloyd Yates, Duke Energy executive vice president of market solutions and president of the Carolinas region.

"In my more than 30 years in the industry, what I can tell you is this is an exciting and very unique project that combines customer input with a number of special opportunities to create a project that is a win-win for consumers, the environment and the economy," Yates said in a press conference held in offices at Lake Julian.

Plans for the new facility must first be approved by the North Carolina Utilities Commission, and Duke officials expect to submit the proposal for the project sometime near the end of 2015 or a few months into 2016.

If regulatory approval goes smoothly, groundbreaking for the natural gas plant is expected for 2017, beginning 30 months of construction that would add about 800 jobs to the region as the facility is being built.

About 90 people work at the Lake Julian facility. About 50 people would work at the natural gas plant on a permanent basis.

Plans call for the new plant to have a smaller footprint than the coal facility, and cooling towers would minimize temperature impacts on Lake Julian, according to Duke.

Before the decision to convert to natural gas, Duke officials has been considering adding 126 megawatts of power to meet the region's growing energy needs with diesel-powered fast-start peaking units. Those units, in combination with environmental upgrades to handle coal ash, would have carried a price tag of about $100 million.

The switch to natural gas is in part tied to the Canton paper mill in Haywood County, which was ordered by the Environmental Protection Agency to convert its power source from coal to natural gas.

State Sen. Tom Apodaca said he approached Duke about a year ago, asking the company if a conversion could also happen at Lake Julian, since the capacity of natural gas lines feeding the region would be expanded.

"Well, they got back with me about a month or two ago and said they have been working on this with PSNC Energy with the gas line and said it looked like this could come to fruition," he said at the press conference.

He added that he expects on Wednesday to introduce a bill to the General Assembly that would allow Duke to forgo upgrading coal ash management systems at Lake Julian as the company looks to shutter the plant.

Under the state's Coal Ash Management Act, Duke must meet regulatory requirements regarding the disposal of coal ash in 2019, about a year before the plant is expected to be shuttered.

Much of the coal ash at Lake Julian is being moved to Asheville Regional Airport, where it is being used as fill to create flat, usable land.

In a joint statement, several area environmental groups including MountainTrue, Sierra Club and the Southern Environmental Law Center called the switch to natural gas a step in the right direction, but a half-measure.

Those groups have participated in the Asheville Beyond Coal Campaign, a three-year effort that has called for Duke to invest in clean energy in the region.

"Folks want a bright future that supports clean energy, not a giant gas plant polluting Asheville for another 30 years," the statement reads. "North Carolina has the opportunity to be a leader in clean energy generation through aggressive investments in solar power and energy efficiency, and Duke Energy must be a partner in that effort, but moves like this deeply undermine the ability to bring online clean, reliable 21st century energy options that will create good jobs right here at home."