North Carolina Department of Environment and Natural Resources Issues Final Cliffside Air Permit

The North Carolina Department of Environment and Natural Resources’ (DENR) Division of Air Quality today issued a final air permit for an 800-megawatt advanced clean-coal unit planned at Cliffside Steam Station, about 50 miles west of Charlotte.

Duke Energy executives will conduct a media call today at 2 p.m. ET to discuss details of the permit. Participants can call 800-894-5910, use the password “7 Cliffside,” and state their name and media outlet. Check-in begins 15 minutes before the call.

“This is the final milestone prior to beginning construction on the new unit, which will serve increasing customer demand and population growth in the Carolinas,” said James L. Turner, president and chief operating officer, Duke Energy U.S. Franchised Electric and Gas. “Modernizing the Cliffside Steam Station is good for North Carolina’s economy and its environment. During the four-year construction period, building the unit will create 1,600 new jobs and an annual $100 million payroll in North Carolina.”

At Duke’s request, Cliffside’s final air permit includes emissions limits for sulfur dioxide and nitrogen oxide that are stricter than federal or state requirements. Mercury limits set by DENR are also more stringent than federal limits.

Adding to these environmental benefits, the final air permit includes a commitment from Duke Energy Carolinas to address the emission of carbon dioxide, which, though not regulated, has become a source of concern because of its link to global warming.

In addition, the company had previously committed to invest approximately $50 million of Carolinas’ revenues each year in energy efficiency, with appropriate regulatory approval.

“Through a carbon mitigation plan, Duke Energy Carolinas and DENR will take decisive steps to lessen the environmental footprint of our operations,” said Ellen T. Ruff, Duke Energy Carolinas president. “Today is a landmark day for our region. We believe this first-of-its-kind carbon mitigation effort is needed to ensure our customers continue receiving a safe, reliable, cost-effective supply of energy while at the same time reducing the impact of greenhouse gas emissions.”

First-of-Its-Kind Carbon Mitigation
Once the new unit comes online in 2012, Duke Energy will retire four older, less efficient generating units capable of generating approximately 200 megawatts at the Cliffside site.

Duke Energy has also agreed to a scheduled retirement of 800 additional megawatts of older, less efficient coal capacity in North Carolina. Previously, the company had committed to retire up to 800 megawatts only if it achieved an equivalent amount of energy efficiency savings.

The carbon mitigation plan, which is part of the permit, removes the energy efficiency contingency and schedules the 800-megawatt retirements as follows:

* 350 megawatts by Dec. 31, 2015
* 200 additional megawatts by Dec. 31, 2016
* 250 additional megawatts by Dec. 31, 2018

In addition, Duke Energy has committed to take further actions to render Cliffside unit 6 carbon neutral by 2018.

These actions may include energy efficiency, carbon-free tariffs, purchase of credits, domestic and international offsets, additional retirements or reduction in fossil fuel usage as carbon-free generation becomes available. These actions, with appropriate cost recovery, will require approval from the North Carolina Utilities Commission and include input from DENR’s Division of Air Quality.

Duke will also build Cliffside unit 6, to the extent practical, to accommodate the installation and operation of future carbon control technologies.

“Cliffside’s final air permit is the result of one of the most comprehensive and extensive public reviews ever conducted by DENR,” Ruff added. “This permit is one of the most protective permits issued in the country.

“In addition, the strong positive business and community support in Cleveland and Rutherford counties and from across both Carolinas has enabled us to move forward with this modernization project and demonstrates an understanding of our state’s energy choices,” she said.

Construction of the new unit is expected to begin immediately.

Duke Energy must build new generation to meet its legal obligation to serve increasing customer needs, which is spurred by the region’s population growth. Each year, approximately 40,000 to 60,000 new customers are added to Duke’s Carolinas system.

Building on a diverse fuel portfolio to ensure reliability, Duke requested approval in December 2007 to build two 620-megawatt combined cycle, natural gas facilities at its existing Buck and Dan River Steam Stations and submitted a new nuclear license application for a proposed two-unit, 2,234-megawatt nuclear station in Cherokee, S.C. The company will also continue aggressively pursuing energy efficiency and renewable technologies to help meet the energy demand.

Duke Energy’s Carolinas’ operations include nuclear, coal-fired, natural gas and hydroelectric generation. That diverse fuel mix provides nearly 21,000 megawatts of safe, reliable and competitively priced electricity to more than 2.3 million electric customers in a 24,000-square-mile service area of North Carolina and South Carolina.