POWER June 2015 - 48

GENERATION TRANSITIONS
The Levy County site is close to Crystal River. Progress figured it
could save costs by sharing facilities with the other nuclear plant. In
2006, the Florida Legislature passed a state law allowing the utility to
recover the costs of the new plant in advance of construction at Levy
County.
The nuclear renaissance proved stillborn as cheap natural gas soon
dominated the economic environment for new generation. Progress
delayed the Levy County plant, Duke bought Progress, and Levy
County entered the long U.S. list of nuclear plants planned but not
delivered. As part of the settlement with the state of Florida over the
Levy County project, Duke was able to avoid public hearings on how
the company allegedly botched the Crystal River repair program, according
to the Tampa Bay Times.
Ivan Penn, the energy reporter for the Tampa Bay Times, wrote,
" Further, the settlement guarantees Duke a minimum profit margin
of 9.5% through 2018. As for Duke's customers, the settlement stems
the financial bleeding from the Levy and Crystal River misadventures
at up to $3.2 billion. "
In 2007, at the height of the nuclear renaissance hyperbole,
Duke asked the U.S. Nuclear Regulatory Commission (NRC) to approve
a combined construction and operating license for a two-unit,
AP1000 nuclear plant, the William States Lee III station, to be built
in South Carolina at an estimated cost of $11 billion. That project
has been treading water as the economics for nuclear have eroded.
The company continues to carry information about it on the corporate
website (and also displays information on the mothballed Levy
County project).
Duke has avoided getting specific about the timeline for the Lee plant,
saying it won't get into details until the license application at the NRC
has been approved. That could come in 2016. Among those following
Filling the Gap with Gas
The retreats by Duke Energy, American Electric Power, FirstEnergy,
and others in the Midwest wholesale markets have created
major opportunities for non-utility generators to replace generation
(often coal-fired) from the retreating incumbents with
natural gas flowing from nearby fields opened up by hydraulic
fracturing.
ElectricityPolicy.com reported recently on a spate of new nonutility
gas-fired capacity announced in Ohio to bid into the PJM
Interconnection in the face of major coal retirements, including:
■ The Swiss company Advanced Power's 750-MW project in Carroll
County, Ohio.
■ The 799-MW Oregon (Ohio) project, a venture of Energy Investors
Funds (EIF) and I Squared Capital.
■ NTE Energy's 525-MW gas-fired power plant in Middletown,
Ohio, in Butler County.
■ Clean Energy Future-Lordstown LLC is proposing to build an
800-MW gas-fired plant in Trumbull County, Ohio.
■ NRG Energy's conversion of the iconic 725-MW coal-fired Avon
Lake power plant on Lake Erie to gas, waiting for state approval
to build a 20-mile gas line from Dominion East Ohio and
Columbia Gas of Ohio lines to the plant. Avon Lake has figured
prominently over the years in discussions about reductions on
coal-fired plant conventional emissions.
nuclear closely, the betting is that the Lee plant won't move forward.
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Simple
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Looking Ahead
Looking to the future, Duke Energy is moving to add significant utility-scale
solar in Florida, with some 500 MW of generation by 2024,
although that's a tiny increment to its existing nonrenewable generation
of 57.5 GW. The company filed its " Ten-Year Site Plan " with the
Florida Public Service Commission in April. The utility said its first
solar site, with up to 50 MW of capacity, would see construction start
this year, and another 35 MW completed by 2018. Duke said it plans
to " retire half of its Florida coal-fired fleet " by 2018 as it brings on
the planned solar generation. The company has also filed a plan with
North Carolina regulators for an 80-MW solar project, which could
be developed by the end of the year.
Duke's shift away from competitive wholesale generating markets is
part of a trend among utilities in a position to abandon wholesale competition
for state regulation. Both American Electric Power (see the February
2015 issue of POWER) and Duke (see the Apr. 8 news story " Ohio
Nixes Duke Energy Proposal to Guarantee Income from Coal Plants " at
powermag.com) earlier this year failed in petitions to the Public Utilities
Commission of Ohio (PUCO) to move shares of their merchant generation
in the Buckeye State into state regulation. A similar case from
Akron-based FirstEnergy is pending at PUCO, with hearings scheduled
this month, according to Midwest Energy News (see sidebar).
Does Duke's retreat to the traditional cost-of-service regulation
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business model represent a path to the future for electricity generation
and distribution, or a shrinking away from a modernized, competitive
business model that now covers more than half of the U.S.? The path
Duke Energy follows in the years ahead, and where it ends up, may
help answer that question. ■
-Kennedy Maize is an energy journalist and frequent contributor
to POWER.
www.powermag.com
POWER | June 2015
http://www.ElectricityPolicy.com http://www.powermag.com http://www.POWERLUBEIND.COM http://www.powermag.com
POWER June 2015

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