Natural gas-fueled units will lower emissions; scheduled to be in service in 2013

The N.C. Utilities Commission (NCUC) has approved Progress Energy Carolinas’ plan to build new natural gas-fueled power generation in Wayne County, to replace a coal-fired plant that the utility will retire in 2013.

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The commission today approved a certificate of public convenience and necessity for Progress Energy Carolinas’ proposed 950-megawatt (MW) combined-cycle power plant near the site of the H.F. Lee coal-fired plant. The company announced its plan to retire the plant’s three coal-fired units Aug. 18, and filed the certificate request the same day. The streamlined review process was authorized by legislation approved by the N.C. General Assembly in July.

The natural gas-fueled plant represents a projected investment of about $900 million. It is expected to create up to 500 construction jobs over the 24-month building process. The plan also will involve the construction of a natural gas pipeline to the site in Wayne County, which will enhance gas supply to the region. Progress Energy expects to announce a contract for the gas supply in the near future.

As planned, the new plant will increase the amount of electricity that can be produced at the site by about 550 MW, while reducing overall emissions, including carbon dioxide, nitrogen oxides, sulfur dioxide and mercury. The additional generating capacity may be used to meet the demands of a growing customer service area, meet evolving environmental requirements and to provide for additional resource flexibility.

“For nearly 60 years, the Lee Plant has been a vital part of the resource mix we use to meet the needs of the households and businesses that depend on us,” said Lloyd Yates, president and CEO of Progress Energy Carolinas. “Replacing the plant with new, advanced-design, cleaner-burning plants will help ensure we have dependable, affordable power for our 1.5 million customers and for future generations.”

The company plans to file for a state air permit in the coming months. The schedule calls for construction to begin in 2011.

There are about 70 employees at the Lee Plant. The company is working to ensure that as many as possible will have jobs at the new facility or opportunities to move to other positions at company facilities. The existing power plant will close once the new plant is online.

The three Lee Plant coal units were built in 1951, 1952 and 1962. They are located on the Neuse River west of Goldsboro. In 2000, the company built four combustion-turbine units (fueled interchangeably by natural gas or oil) at a site adjacent to the Lee Plant, called the Wayne County Energy Complex. Earlier this year, a fifth combustion turbine was added at Wayne County. Those units are used primarily as peaking plants, to meet increased demand for electricity on the hottest and coldest days of the year.

The existing Wayne County Energy Complex is large enough to accommodate the additional gas-fueled generation. Unlike the existing gas-fired units at Wayne County, the new units will be operated in combined cycle. The addition will include three combustion turbines with additional equipment added to recover exhaust heat to generate steam. The steam is used to generate additional electricity with no additional need for fuel. This makes the units highly efficient in meeting customer electricity demand as it changes throughout the day.

Progress Energy (NYSE: PGN), headquartered in Raleigh, N.C., is a Fortune 500 energy company with more than 22,000 megawatts of generation capacity and $9 billion in annual revenues. Progress Energy includes two major electric utilities that serve approximately 3.1 million customers in the Carolinas and Florida. The company has earned the Edison Electric Institute’s Edison Award, the industry’s highest honor, in recognition of its operational excellence, and was the first utility to receive the prestigious J.D. Power and Associates Founder’s Award for customer service. The company is pursuing a balanced strategy for a secure energy future, which includes aggressive energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity system. Progress Energy celebrated a century of service in 2008. Visit the company’s Web site at www.progress-energy.com.

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