Duke Energy said Tuesday it will shut down its Asheville coal-fired power plant by 2020, replacing it with a larger, $750 million plant fueled by natural gas.
Duke will also spend $320 million to build a transmission substation near Campobello, S.C. , just across the state line, and connect it to the Asheville plant with a new, 40-mile transmission line.
The route of the new line has not been selected. It is expected to run through Buncombe , Henderson and Polk counties and South Carolina's Greenville and Spartanburg counties.
The plan will reduce air emissions from the coal plant that have been the target of environmental advocates. It also boosts electricity generation in a region that now has to import energy during peak periods.
"With the availability and near-record low cost of natural gas, this comprehensive project will transform the energy system in the region to meet the growing needs of our customers and significantly reduce emissions and water use," Lloyd Yates , Duke's Carolinas president, said in a statement.
Duke has retired seven of its 14 North Carolina coal plants in the past five years. Many older, inefficient plants faced expensive air-pollution updates and Duke was transitioning its fleet toward cheaper, cleaner natural gas.
But Asheville's city council voted in October 2013 to urge Duke to move away from coal to reduce carbon emissions.
The gas unit will emit 60 percent less carbon dioxide for each megawatt-hour of electricity it generates. But because it will have nearly twice the generating capacity of the two coal units, it's unclear whether actual carbon emissions will be lower.
Coal ash stored at the Asheville plant has ash been linked to groundwater contamination, leading to charges by state regulators in February. The state Department of Environment and Natural Resources has not yet levied a fine, but penalized Duke $25 million for groundwater contamination at a Wilmington power plant.
Asheville is one of four designated by state legislators as high priorities for closing ash ponds. Ash from the site is now being hauled to the city's airport for disposal.
Spokesman Tom Williams said those pressures didn't influence Duke's decision to do the project. "There's no one driver of this," he said.
Williams cited the expanding availability of gas at low prices and the ability to take advantage of it through an upgraded service line to the plant.
Retiring the two coal units, which date to 1964, also lets Duke avoid the costs of a legislative mandate to convert to dry ash handling at the plant.
The coal units have the capacity to generate 376 megawatts of power. Because of a dearth of electric generation in western North Carolina , Duke has operated the plant even when it wasn't cost-effective.
Electricity demand in the Asheville area has doubled over the past four decades, Duke says. The region has to import about 400 megawatts during peak demand.
The new transmission line from South Carolina will improve the ability to move electricity into the area. Duke expects demand to increase 15 percent over the next decade.
The new gas plant will have a 650-megawatt capacity and take advantage of natural gas prices that have fallen sharply in recent years. Gas also burns more cleanly than coal.
A PSNC natural gas pipeline that serves the plant will be extended, through an existing easement, to the intrastate Transco gas pipeline that runs from the Gulf to New York.
The announcement means Duke will cancel the planned construction of 126 megawatts of oil-fired generation to meet peak demand.
The gas plant will use combined-cycle technology that captures exhaust heat and turns it into additional energy. Low gas prices mean it will be about 35 percent less expensive to operate than the coal plant.
The project will reduce the power plant's emissions of sulfur dioxide, which contribute to haze and acid rain, by up to 95 percent. Water withdrawals will go down 97 percent.
The Sierra Club reported in March that sulfur dioxide concentrations in neighborhoods downwind of the plant were at unsafe levels.
Duke said the power plant and transmission line projects will employ a peak workforce of about 800 in 2017 to 2019. The new plant will increase property tax payments to Buncombe County by 35 percent to 40 percent.