Duke Energy is postponing its target date as concerns mount regarding the project’s cost. Also, demand for power appears to be growing more slowly than in recent years.
The updated plans of Duke Energy, also call for delays in building the utility’s proposed Buck Steam Station and Dan River combined-cycle gas plants.
Janice Hager, head of Duke Energy’s resource planning, said it appears that demand for electricity, not adjusted for the weather, has been flat the last four years. Duke Energy’s new projections call for demand growth to return to an average 1.5% annually in the long term. But the company isn’t projecting a spurt in demand once the recession ends.
The biggest change involves Lee, though Hager cautions the new construction schedule isn’t set in stone.
When Duke Energy initially proposed the plant, it aimed to open it in 2016. The company has acknowledged from the outset for that the startup date wasn’t firm. In meanwhile, the targeted opening date slipped to 2018. And Duke Energy’s new plan says 2021 might be the best target date for Lee to begin generating electricity.
But Duke Energy says the Lee plant is still key to its plans.
Hager said the delay will give the company extra time to seek state legislation for recovering its costs for nuclear plant construction. Duke Energy said for several weeks that it couldn’t consider going forward with a new nuclear facility in the Carolinas unless North Carolina adopts a law that, like South Carolina’s, streamlines the process for recovering its costs.
Duke Energy may also be able to use the time to find a construction partner for the Lee plant. Hager said having partner to share the cost would make it possible for Duke Energy to start construction earlier, because that would remove some of the financial risk for the company.
Duke Energy will continue to need additional power plants, even though growth in the demand for electricity has slowed. The company expects to resume its traditional growth rate after the recession ends. Energy-saving initiatives such as its Save-A-Watt program won’t reduce demand enough to avoid plant construction, Duke Energy says.
“Even if the company fully realizes its goals for (energy conservation and efficiency), the resource need grows to approximately 5,500 megawatts by 2029,” its new planning report states.
