A setback for Duke Energy, N.C. regulators in fight over gas plant

Duke Energy's push to get North Carolina regulators to impose an unprecedented multimillion-dollar bond on two climate nonprofits in order for them to continue to challenge the company's plans to build a $1 billion fracked gas plant in Asheville was dealt a blow this week by the N.C. Court of Appeals. (Illustration of the proposed Asheville gas plant via Duke Energy's website.)

Climate activists will now have the chance to continue their appeal of North Carolina regulators' decision allowing Duke Energy to build a $1.1 billion fracked gas power plant thanks to an order handed down this week by the state appeals court.

Last month the N.C. Utilities Commission, which approved construction of the plant in Asheville, ordered two nonprofits challenging that decision, NC WARN and The Climate Times, to pony up $10 million to continue their appeal of the plant's construction. The groups argue that the plant is not needed, that the future supply and price of gas are uncertain, and that the plant would increase greenhouse gas emissions. Duke Energy plans to build up to 15 large gas-fired plants in the Carolinas, which climate advocates say would be a disaster because of the industry's documented problem with leaking methane, a particularly potent greenhouse gas.

Citing a never-before-used provision of a state law allowing the utility to seek a bond from critics challenging a power plant approval, Duke Energy initially asked the commission, over which it holds considerable influence, to impose a $50 million bond to offset any construction delays due to the appeal. The commission instead ordered the environmental nonprofits to show they have assets to post a $10 million bond — what's known as an "undertaking."

Unable to finance such an undertaking, the nonprofits argued that the amount was arbitrary, as Duke Energy did not provide evidence that the appeal would delay construction.

The state's second-highest court agreed. In a June 7 order, the N.C. Court of Appeals instructed the utilities commission to set bond in an amount "based upon competent evidence."

"The court essentially ordered the commission to conduct a proper proceeding over the bond issue," NC WARN Executive Director Jim Warren said in a statement. "If the commission blows the issue again, the court could decide to accept the appeal without a bond — which would be entirely appropriate."

NC WARN and The Climate Times have said the unprecedented bond requirement shows how the utilities commission shields Duke Energy from public scrutiny.

The Asheville plant is part of the company's Western Carolinas Modernization Plan announced last year. As part of that, Duke Energy announced it would shutter the existing coal plant on the site and construct two new 270-megawatt natural gas units, with the possibility of a 190-megawatt peaking unit to come in the early 2020s.

The project was fast-tracked through the state regulatory process under a law sponsored by retiring state Sen. Tom Apodaca, a Henderson Republican and Western North Carolina's most powerful state lawmaker, who conceived of the Asheville plant. Under that law the utilities commission approved the plant in just 45 days, raising questions about how thoroughly it was considered.