By John Downey
Duke Energy Progress wants state regulators to require opponents to post a $50 million bond if they appeal the order approving construction of its proposed Asheville natural gas plant.
The utility says it is on the verge of finalizing contracts this month for the $1 billion plant construction and infrastructure project. Any delay could cost many millions (and perhaps as much as $140 million) in added construction costs.
State legislators mandated an expedited approval process for the Duke Energy’s Asheville natural gas plants. But opponents want to appeal the case saying regulators did not consider their objections.
If the courts find against the opponents after a delay, Duke argues, the costs of those delays should be laid to the opponents rather than customers. And that would require a hefty bond.
Preventing appeal?
Jim Warren, executive director of N.C. WARN, says the high bond is just an attempt by Duke (NYSE:DUK) to keep his group and other opponents from taking the case to the N.C. Court of Appeals.
“We aren’t asking them to delay anything,” Warren says.
Duke spokesman Tim Pettit says the company cannot risk signing contracts for the project unless it knows costs for unjustified delays, should opponents lose their appeal, are not charged to its customers.
“All of the unique factors that make this an appealing project are unique factors that make it a complex project for any kind of delay,” he says.
Unexpected bond
Consumer advocacy group N.C. WARN and environmental group The Climate Times want to appeal the commission’s February ruling approving the 560-megawatt Asheville combined cycle gas plant. Late last month, they asked the commission to give them an additional 30 days to file the appeal, which the commission granted by extending the deadline to May 27.
The groups had learned that, unlike in most appeals made to the state courts, they will be required to post a bond to challenge a construction approval for a power plant.
They said they would need to know the amount of the bond before deciding to appeal. So they asked for the extension and at the same time asked the commission to set the bond at $250.
“If bonds are set prohibitively high, then it could be impossible for parties to appeal,” they told the commission in an April 25 filing. “Therefore, the bond should be a nominal amount.”
‘Protect the customer’
The groups contend they are not seeking a stay while the case is appealed, so Duke should not have to pay for any delays while the appeal is heard. “The anticipated appeal does not prevent Duke … from moving forward with the construction,” they say.
Duke disagrees.
The utility notes the bond is intended “to protect utility customers from having to pay for any potential construction cost increases caused by unsuccessful appeal-related delays and to place an appropriately high burden upon parties seeking to pursue an appeal.”
They call the bond N.C. WARN and The Climate Times propose “grossly inadequate.”
“By making the absurd argument that a $250.00 appeal bond would provide adequate protection for (Duke’s) customers from potential construction costs delays for a $1 billion generation construction project, (the groups) are essentially attempting to argue that the law does not, or should not, somehow apply to them,” Duke lawyer Bo Somers argues in his response filed Monday.
He says Duke’s schedule for construction of the plant is extremely tight. Duke is in the last stages of completing contracts with suppliers and contractors so that construction can begin in October. Duke says that is essential if the plant is to be built on the expedited schedule required by the Mountain Energy Act, adopted by the N.C. General Assembly last year.
Pettit says that is the complicating factor that leaves Duke unable to delay the project without considerable expense.
