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Open letter on Duke rate increase

Editor’s note: Following is an open letter from environmental and civic groups to N.C. Utilities Commission chair Edward Finley on Duke Energy’s proposed rate increase. The commission is holding a public hearing on the matter tonight (Thursday) at Durham City Hall.

Dear Chairman Finley,

We, the undersigned health, business, social justice and environmental organizations – representing thousands of North Carolinians – write to request that the North Carolinas Utilities Commission revoke the certificate of public convenience and necessity (CPCN) for Duke Energy’s proposed Cliffside Coal Plant (Unit # 6) and to ask that the Commission deny Duke Energy’s request for a 13.5 percent residential rate increase which includes covering the costs of building Unit # 6 ($600 million to $1 billion of the request). This rate increase, if granted, would be on top of the 4.5 percent fuel cost increase (largely for coal) that the Commission just granted – for a total of an 18% rate increase for residential consumers.

As you may know, many of our members testified in opposition to the Cliffside CPCN when the Commission first considered Duke Energy’s application to construct and operate Unit #6. Unit #6 is unnecessary and our concerns about its negative effects on the pocketbooks, health and welfare of North Carolina residents have deepened since the Commission first issued the CPCN. Recently 24 organizations have made known to the Commission their support for revoking Cliffside Unit #6’s CPCN.
The Waning Demand for Duke Energy’s Electricity makes Cliffside Unit #6 Clearly Unnecessary. Sales are down in Duke Energy’s service area. This is especially telling when sales to Orangeburg and similar entities outside the service area are removed from Duke Energy’s original forecasts. Moreover, Duke Energy’s 2008 Integrated Resource Plan retains 600 MW of wholesale contracts in 2012 – the exact amount Unit #6 is projected to supply. In addition, the proposed settlement agreement in Duke Energy’s Save-a-Watt docket would decrease the demand for Unit #6 even further.

Forcing Consumers to Pay for Constructing an Unnecessary Power Plant During the Worst Recession Since the Great Depression Will Have Major Negative Effects on Residential Ratepayers. There is no doubt that building new power plants, such as Unit #6, will continue to increase our rates much more than by using energy more efficiently, increasing co-generation, and deploying renewable energy. According to Duke University economist John Blackburn, Duke Energy’s own data shows new plants can be avoided by modest increases in energy efficiency and with renewable sources of energy at levels already required in North Carolina.

At the projected cost of at 2.4 billion dollars, Unit # 6 is too expensive and does not – as evidenced by the timing of Duke Energy’s current request for a rate increase – consider the all-but-certain costs of national carbon regulation and increases in the price of coal. North Carolina has the nation’s eighth worst unemployment rate at 11.1% and, as such, is likely to take much longer to recover from the recession than other states. Forcing consumers to pay for an unneeded power plant is unconscionable.
Unit #6 Will Pollute Our Air, Land and Water for the Next Fifty Years. Unit #6 poses a serious threat to our air, land and water and will adversely impact the health of our members and their families over its fifty-year lifespan. For instance, by emitting fine particulate matter, oxides of nitrogen, sulfur dioxide, mercury and an alphabet soup of other toxic chemicals, Unit #6 will choke the state’s skies and deposit these toxics onto our land and water – adversely affecting crops and fisheries. The economic effects of damaging these resources alone warrant the revocation of the CPNC. More disturbing is the fact that children, the elderly and those with chronic sickness will be the ones bearing the greatest burdens of Unit #6. Externalized costs for Duke Energy are real costs for North Carolina residents. Moreover, in a time when the world and the nation are gravely concerned about the impacts of carbon dioxide and other greenhouse gases, Unit #6 is expected to emit six million tons of carbon into the atmosphere annually – the greenhouse gas equivalent of one million cars per year. Of course, these emissions will materially add to the myriad costs of climate change, including sea level rise, to our state.

Simply Put, Unit #6 – and its Concomitant Serious Negative Effects on the Health, Welfare and Economic Well-being of North Carolina Residents – is Indefensible. Responding to the worsening climate crisis, the rising costs of coal-fired power plants, and the social and environmental devastation of mountaintop removal coal mining, state regulators from across the country have simply said “no” to nearly one hundred proposed coal-fired power plants since 2006. The conclusion of these decision makers that America can meet its future energy demands without building new coal-fired power plants is rapidly spreading. For instance, the chairman of the Federal Energy Regulatory Commission, Jon Wellinghoff recently stated “we may not need any ever,” and Interior Secretary Ken Salazar, has said “the idea that wind energy has the potential to replace most of our coal-burning power today is a very real possibility. It is not technology that is pie-in-the sky; it is here and now.”

Charged by the General Assembly with, among other things, (1) promoting least-cost energy planning, (2) providing just and reasonable rates, (3) promoting conservation of energy, and (4) providing fair regulation of public utilities in the public interest, the Commission has both the authority and the duty to deny Duke Energy’s requested rate increase and to revoke its CPCN for Cliffside Unit #6.

To the extent that Duke Energy argues that revocation would work an undue financial hardship against it, the General Assembly has already spoken to the issue by anticipating that Unit #6 might never be completed due to fiscal and environmental concerns. Accordingly, the General Assembly has provided Duke Energy the opportunity to recover certain costs of constructing Unit #6 in the event it is not completed if those costs are judged prudent. See N.C. Gen. Stat. §§ 62-110.1(f2)–(f3).

For the foregoing reasons, we – on behalf of our members – respectfully request that the Commission: (1) deny Duke Energy’s request for a rate increase, and (2) immediately revoke the CPCN for Unit #6.

Sincerely,
(signed by representatives of Appalachian Voices, Blue Ridge Environmental Defense League, Canary Coalition, Carolinas Clean Air Coalition, Catawba Riverkeeper Foundation, Clean Water for North Carolina, Greenpeace North Carolina, Mountain Voices Alliance, NC Conservation Council, NC Conservation Network, NC Fair Share, NC Justice Center, NC WARN, North Carolina Interfaith Power and Light, Progressive Democrats of North Carolina, NC Student Climate Coalition, and others.)

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