08/19/09 — $900M gas plant coming to county

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$900M gas plant coming to county

By Steve Herring
Published in News on August 19, 2009 1:46 PM

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Progress Energy's Lee plant is seen in the background west of Goldsboro. Company officials announced plans to replace the coal-fired plant with a gas-fueled facility by 2013. The coal-fired units were built in the 1950s and '60s.

A $900 million investment by Progress Energy will help lessen the sting felt earlier this week when Turkington USA officials announced the company and its 120 jobs were moving to Clayton.

Progress Energy officials Tuesday afternoon announced plans to permanently shut down the three coal-fired power plant units at the H.F. Lee Plant on the Neuse River just west of Cherry Hospital and to seek state regulatory approval to build a new, state-of-the-art natural gas-fueled facility at the site.

As proposed, the new plant would be a roughly $900 million investment and is expected to create up to 500 construction jobs over the two years it will take to build.

It is expected to be in service in 2013.

The announcement was welcome news for local officials, particularly County Manager Lee Smith, who noted that the plant accounts for about one-fifth of the county's tax base.

"Obviously, with all of the changes on the state and federal levels with energy and a movement toward green and cleaning up the environment, I think it is great that Progress Energy is trying to do all it can to meet those requirements. The great news is that they are keeping the investment here," he said.

Along with operating more efficiently and providing more power, the plant will help boost the tax base, he said. Also, use of natural gas will mean an expansion of that utility here as well.

The plant currently employs 70 workers. Smith said the fate of the jobs is a concern, but he added that Progress Energy has a "good track record of transitioning workers and finding jobs for folks."

Company officials said they are working to ensure that as many employees as possible will have jobs at the new facility or opportunities to move to other jobs within the company.

"It is great news for Wayne County," said Joanna Helms, president of the Wayne County Development Alliance. "We are really excited about it. We are thrilled. A $900 million investment, and an estimated creation of 500 jobs for two years, those are incredible numbers. This is huge -- perhaps the most significant announcement for Wayne County in years."

The plant's coal-fired units will remain operational until the new facility is competed and available to ensure reliable energy, said Mike Hughes, director of media relations and PEC Communications for Progress Energy.

Hughes said he is unsure what will happen to the old units once the new plant is completed.

"There are no specific plans for demolition," he said.

Hughes said demolition would add to the cost of the project.

In addition, the ash pond at the site where the ash leftover from the process is stored will remain active during the project. Once coal is no longer used at the facility, no more ash will go into the pond, he said. However, the company will continue to manage and maintain the pond.

Construction is expected to begin within the next several months and some preliminary analysis is under way, Hughes said.

The new plant would increase the production of electricity by about 550 megawatts, while reducing overall emissions, including carbon dioxide.

Progress Energy officials said the additional generating capacity would be used to meet the demands of a growing customer service area and to provide for additional resource flexibility.

The project also will involve construction of a natural gas pipeline to fuel the new units. The officials said the pipeline would provide the additional benefits of extending large-volume gas supply more deeply into eastern North Carolina.

The three Lee Plant coal units were built in 1951, 1952 and 1962. 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 in 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 site is large enough to accommodate the additional gas-fueled generation.

The project will include the need to build and enhance some electric transmission facilities at the site to move the power where it is needed. Unlike the existing gas-fired units, 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. Units operating in combined-cycle mode are used as "intermediate" plants, cycling up and down during the day to meet changes in customer electricity demand.

In addition to an estimated 60 percent reduction in the facility's carbon dioxide emission rate, the new units would decrease the facility's emission rates for mercury by 100 percent, sulfur dioxides by nearly 100 percent and nitrogen oxides by more than 95 percent.

"This is an important milestone for our company and for our state," said Lloyd Yates, president and CEO of Progress Energy Carolinas, in a statement. "The Lee Plant has been producing electricity reliably and cost-effectively for our customers for more than 50 years, but as emission targets continue to change, and as legislation to reduce carbon emissions appears likely, we believe in this case, it's in the best interest of our customers to invest in advanced-design, cleaner-burning generation for the future."