Duke Energy Progress CPCN for a Combined Cycle Unit in North Carolina
Synapse provided expert testimony and analysis to support the Southern Environmental Law Center (on behalf of the Southern Alliance for Clean Energy) in reviewing Duke Energy Progress’s (DEP) application for a Certificate of Public Convenience and Necessity (CPCN) for a second combined cycle gas unit at the Roxboro site in North Carolina. The purpose of Synapse's testimony was to evaluate whether Duke established the need for the unit, assess whether Duke’s analysis adequately compared alternatives and accounted for fossil fuel investment risks, and discuss potential ratepayer protection measures.
Synapse found that moving ahead with the combined cycle unit would lock ratepayers into paying for a long-lived asset that would expose them to future risks from fuel price volatility and environmental regulation. DEP’s modeling shows that the utilization of the unit will decline steeply over its lifetime, and the resource is at risk of becoming a stranded asset under state climate law. As a result, Synapse recommended that the Commission not approve Duke’s request for a CPCN. Instead of moving ahead with the combined cycle unit, Synapse recommended that DEP should work to procure alternative resource options, such as battery or combustion turbine capacity paired with solar and wind. It should also focus on streamlining and removing bottlenecks in its interconnection process.
Synapse also found that DEP’s need for the combined cycle unit is primarily a result of load growth from prospective large load customers, including data centers and manufacturing facilities. Regardless of its decision on the CPCN, Synapse recommended that the Commission protect existing ratepayers from cost increases associated with large load customer additions by directing Duke to develop tariffs that commit large load customers to paying their full incremental cost of service before DEP builds assets to serve them.