State cuts Duke's expansion plans in half at Cliffside facility

CHARLOTTE, NORTH CAROLINA - Duke Energy Corp. said building one coal-fired power unit west of Charlotte would cost $1.53 billion - more than half the cost for the two units it originally requested.

Add the cost of financing the project at its Cliffside facility, and the price is $1.93 billion, according to a recent ruling from the N.C. Utilities Commission. Duke asked the commission in 2005 for permission to build two 800-megawatt coal-fired units, saying it needs the extra capacity to meet future energy demand by 2011.

The Charlotte-based company is the Carolina's largest utility with about 2.3 million customers and has added 50,000 new customers a year over the past five years. The project was controversial because of air pollution and its increasing price, from an initial $2 billion to $3 billion for two units.

The commission said the company could build just one unit in a recent ruling (including a new cost estimate). Duke doesn't know whether it will move forward with the project and said it was still waiting for a state air quality permit. Environmental groups have been against the project from the start, complaining Duke hasn't explored energy efficiency programs or renewable fuels, such as solar and wind.

Coal-fired power plants are among the chief producers of industrial carbon dioxide, blamed for global warming. The 38-page commission ruling includes a three-page dissent from commissioner Robert Owens Jr., 74, a former Dare County commissioner and Gov. Jim Hunt appointee. He echoes concerns over global warming and invokes John. F. Kennedy in the comments. He was the lone vote against Duke building even one of the units, which the commission approved in a 5-1 vote.

"We are in a unique position to make the hard decisions.... We must prepare ourselves to make sacrifices for our survival on this earth," he wrote. Duke Chief Executive Jim Rogers said he supports regulating carbon dioxide through a national cap and trade system that would force companies to buy increasingly expensive credits to pollute beyond certain levels. Conditions The N.C. Utilities Commission attached conditions to approval of the new coal-fired unit for Duke.

The company must: - Retire four-1940s-era coal-fired units at Cliffside. - Spend $50 million a year on energy efficiency and demand-reduction programs and report on progress every March 1. - Retire older coal-units equal to the amount of energy saved each year from the programs. - Report every February on progress and cost of building the unit, which Duke hopes to have operating by 2011.