Progress Energy: Local project still in the works
By Steve Herring
Published in News on January 11, 2011 1:46 PM
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News-Argus/MICHAEL BETTS
Progress Energy officials announced Monday that the proposed merger with Duke Energy will not affect plans for a new plant here.
Construction is expected to continue on Progress Energy's $900 million natural gas-fired power plant being built in Wayne County despite the company's pending merger with Duke Energy.
"I believe that project will continue," Progress Energy CEO Bill Johnson said during a Monday morning teleconference. "We need the capacity."
The new plant is cleaner than the coal-fired units that it is replacing, he said. Also, both companies are in the process of phasing out the older coal-fired units for newer, cleaner burning and more efficient ones, he said.
"That plant is needed. It was needed when we made the decision (to build)," Johnson said.
The $26 billion merger, expected to take about a year, that would create the nation's largest utility with a value of approximately $65 billion enterprise value and $37 billion in market capitalization.
During the teleconference both Johnson and Duke Energy CEO Jim Rogers said it is to early to determine how the merger would affect customer rates and jobs.
The merger is expected to save $600 million to $800 million over the next five years because of savings generated by combining the two companies.
The merged company, to be called Duke Energy, will be have its headquarters in Charlotte, but will continue to have a strong presence at Progress Energy's existing Raleigh office, they said.
Also, it is expected that most jobs would be eliminated through attrition and retirements, Johnson said.
The company would provide service to approximately 7.1 million electric customers in North Carolina, South Carolina, Florida, Indiana, Kentucky and Ohio.
Groundbreaking for the Wayne County project was held in September. The site is located off Black Jack Church Road near Progress Energy's H.F. Lee Plant. The new plant is scheduled to come on line by early 2013.
Piedmont Natural Gas will construct 38 miles of 20-inch pipeline along with additional compression facilities to provide natural gas delivery service to the plant by July, 2012.
Piedmont's investment in the pipeline and compression facilities is estimated at $85 million and is supported by a long-term service agreement with Progress Energy Carolinas.
The switch coal to the cleaner-burning natural gas will cut carbon emissions nearly in half and almost completely eliminate mercury, nitrous oxide and sulfur oxide emissions, company officials said.
Also, instead of venting hot exhaust gas, the gases will be recaptured to create steam to turn turbines to create more energy out of the same amount of fuel.
Wayne County officials have said the county will gain more than just a modern power plant and its affect on the county's tax base and job market -- the new gas line will add another tool to the county's economic efforts as well.