North Carolina may take up securitization idea to speed coal plant closures

first_imgNorth Carolina may take up securitization idea to speed coal plant closures FacebookTwitterLinkedInEmailPrint分享Energy News Network:A controversial ratemaking bill in North Carolina contains a little-discussed section that — if amended — could offer a financing model to help Duke Energy close its coal-fired power plants sooner rather than later.Senate Bill 559 includes language authorizing the utility to recoup storm repair costs with bonds secured by ratepayers, a mechanism called securitization. The Duke-backed bill cleared the state Senate this month, but its pace has slowed in the House, primarily because of another provision that would allow upfront, annual rate hikes over multi-year periods.Clean energy advocates say lawmakers should sideline the bill’s ratemaking section and explore broadening the securitization tool to allow Duke to refinance the debt on its aging coal fleet.Duke Energy spent an estimated $571 million last year responding to hurricanes Florence and Michael, and Winter Storm Diego, according to nonpartisan legislative staff. Securitization would allow the utility to recover those expenses right away, rather than waiting for its next rate case.While clean energy advocates oppose the bill’s ratemaking section, they haven’t protested its securitization language. But, said Cassie Gavin, the lobbyist for the North Carolina Sierra Club, “we don’t see why it should be so limited.” Gavin and other advocates say Duke could use securitized bonds for other uses, including paying off the debt on its fleet of decades-old coal-fired power plants, allowing the utility to shut them down years ahead of schedule.The company has closed or converted half of its coal-fired power plant fleet since 2011 and plans to close five more units in the next five years. But its latest long-range plans show it will keep 15 units running until they have fully depreciated, in many cases past 2033. One 844-megawatt facility west of Charlotte, called Cliffside 6, is slated to operate until 2048. Advocates argue keeping these plants open until their value has fully depreciated is uneconomical, with their ongoing costs increasingly more expensive than building new renewable generation or other sources of power.More: In controversial N.C. ratemaking bill, a tool to help retire Duke coal plantslast_img