Opinion
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Using state's resources effectively, efficiently
Customers would bear cost if bill is passed
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Published: March 8, 2009
Recently, a bill to ban the use of mountaintop-mined coal in North Carolina was reintroduced in the General Assembly. At Duke Energy, we believe this bill is not in the best interests of North Carolina electric customers or the state's economic growth and development.
In fact, the proposed ban will not stop the practice of mountaintop mining, since the coal from these mines would continue to be used in other states. The only real impact of such a ban would be to cause the rates paid by North Carolina electric customers to go up and to put North Carolina at a competitive disadvantage to states where no such ban exists.
About half of the coal used in the Carolinas comes from mountaintop mines. Every day we manage the challenge of balancing a variety of interests including the availability of coal, environmental concerns and cost to our customers.
Since my job at Duke Energy is to purchase the coal that provides vital electricity for about 50 percent of our 2.3 million customers in the Carolinas, let me describe what would happen if suddenly half of our customers' coal supply was no longer available.
First, it's important to understand that the coal plants serving the Carolinas were designed and built 30 to 50 years ago to use Central Appalachian coal since that fuel source is closest to the plants. This coal is a high-quality, low-sulfur, high-heat content coal.
Putting a different type of coal in these plants would have the same effect as putting diesel fuel in a car with a gasoline engine. The car would sputter, stall and it might even damage the engine.
A quick scan across the coal mines helps put this in perspective. Northern Appalachian coal is a high sulfur, high chlorine-content coal, and our plants can only use small amounts of this coal and still meet clean-air standards.
The coal from Colorado and Utah is compatible for our units, but western utilities already consume all the coal these mines produce, and there is no infrastructure to cost-effectively transport it 2,000 miles to the Carolinas.
Powder River Basin coal from Wyoming is a possible source of fuel, but like Northern Appalachian coal, it would have to be blended with Central Appalachian coal for use in Carolinas plants. And you would have to install equipment for this blending at a cost of hundreds of millions of dollars. Finally, coal from South America is used mostly in Europe, with the closest port available to bring it in located in Charleston. The South American mines do not have the capacity to replace mountaintop-mined coal.
At Duke Energy, we purchase coal only from those mines that follow all state and federal laws governing mining practices. While there is a lot of controversy concerning mountaintop mining, the legality of this mining practice has just been reaffirmed by the Fourth U.S. Circuit Court of Appeals.
Without federal legislation prohibiting mountaintop mining, laws in individual states that ban its use just penalize customers in those states.
Conservative Duke Energy studies put the cost of this increase in power bills for residential customers at 5 percent and industrial customers at 8 percent on an annual basis.
In addition, the company would also have to invest hundreds of millions of dollars for blending equipment to be able to use previously mentioned alternate coals. Fuel costs are paid by customers, so Duke Energy is obligated to purchase the most economic and high-quality option possible.
At Duke Energy, we, too, are very concerned about the environment and are open to a thoughtful discussion with key stakeholders about the issue. But we oppose any bill that will simply disadvantage North Carolina customers without any meaningful benefit to the environment.
■ Vince Stroud is the vice president of regulated fuels for Duke Energy.
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