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Progress Energy Carolinas Announces Accelerated Coal Plant Closings

Stocks in this article: DUK

RALEIGH, N.C., July 27, 2012 /PRNewswire/ -- Progress Energy Carolinas, a subsidiary of Duke Energy (NYSE: DUK), will accelerate the retirement of one North Carolina coal-fired power plant previously slated for closing in 2013, and will retire the utility's only coal-fired unit in South Carolina.

The company announced today that the 316-megawatt (MW) Cape Fear coal-fired plant, located near Moncure, N.C., and the 177-MW H.B. Robinson Unit 1 coal-fired plant, located near Hartsville, S.C., will be retired Oct. 1, 2012. Both will remain online through the summer season to help meet heightened electricity demand.

"These plants, and especially the men and women who have operated and maintained them, have played a vital role in meeting customer energy needs reliably and affordably for decades," said Jeff Lyash, executive vice president of Energy Supply for Duke Energy. "As we continue modernizing our generation system, we salute those who have been instrumental in fueling our region's economic growth so dependably."

The Cape Fear Plant is the utility's first coal-fired facility and was scheduled to retire June 2013 as part of the company's fleet-modernization plan, announced in 2009. Three oil-fired combustion turbines will continue to operate at the site after the coal plant's retirement.

The Robinson coal plant in South Carolina began operation in 1960 and is located on the same site as the 724-MW Robinson nuclear plant. The decision to take the 52-year-old Robinson coal plant offline was made due to pending changes in environmental regulations and other rising costs for smaller, older technology plants. The cost of adding state-of-the-art emission controls on the small unit would be hundreds of millions of dollars. And the potential for additional emission regulations in the future would increase operating costs even further.

Other factors leading to the decision to retire the Cape Fear Plant and Robinson Unit 1 in October 2012 include the anticipated early 2013 commercial operation of new natural gas-fired generation at the H.F. Lee Plant near Goldsboro, N.C., continued low natural-gas prices and the success of the newly merged company's joint-dispatch process that utilizes generation across both Duke Energy Carolinas and Progress Energy Carolinas to more efficiently meet customer needs.

Currently, Duke Energy Carolinas and Progress Energy Carolinas are moving about 1,000 MWs between them through the joint-dispatch agreement related to the July 2012 merger of Duke Energy and Progress Energy. Each megawatt-hour that flows between these systems represents savings for the company's customers and progress toward meeting the company's $650 million merger-related savings commitment.

The Robinson coal plant retirement does not affect the Robinson nuclear plant, which is licensed for continued operation through 2030. Nor does it affect the company's other major generation in South Carolina, the 790-MW Darlington County Plant, which is located near the Robinson plant and includes 13 combustion-turbine units fueled by natural gas and oil.

Fleet modernization plan

On Oct. 1, 2011, the company retired the coal-fired W.H. Weatherspoon Power Plant near Lumberton, N.C., the first retirement under the fleet-modernization plan. Other plants slated for retirement include the H.F. Lee Plant near Goldsboro, N.C., in September 2012 and the L.V. Sutton Plant near Wilmington, N.C., in late 2013. Including the Robinson and Cape Fear plants, the retirements represent more than 1,600 MW, or approximately one-third of Progress Energy Carolinas' coal-generating fleet.

Progress Energy Carolinas has two projects under way to replace the retiring coal-fueled generating capacity with plants fueled by natural gas. A new 920-MW natural gas-fueled combined-cycle facility is under construction at the H.F. Lee Plant site near Goldsboro. That project, including a gas pipeline extension, is expected to begin commercial operation in January 2013.

At the Sutton Plant site near Wilmington, Progress Energy Carolinas is building a gas-fueled combined-cycle plant with a generating capacity of 625 MW. That addition, with a corresponding natural gas pipeline extension into southeastern North Carolina, is expected to be online at the end of 2013.

In June 2011, the company completed the addition of 600 MW of natural gas-fueled generation at the Sherwood H. Smith Jr. Energy Complex near Hamlet, N.C. (formerly called the Richmond County Energy Complex).

Progress Energy Carolinas has worked to minimize job losses associated with the fleet-modernization plan through employee retirements, the company's voluntary severance plan and by assisting employees with retraining and transfers to other parts of the company.

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