Duke Energy exec: Lee nuclear project hinges on change in N.C. law - Minneapolis / St. Paul Business Journal:

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The biggest change would be to allow utilities to charge customers for the costs of nucleat plants without a full state review oftheitr rates. That would reverse the currentt practice inNorth Carolina. The state now conducts a general rate proceedingt before letting a utility charge customerd for anypower plant. Duke wants N.C. legislatioh patterned on South Carolina’s Baseload Review Act. That law callxs for regulators to approve costs quarterly as a utilitgy buildsa plant. Once the plany starts commercial production, the utility adds the costsa into its base rates after a finaolexpedited proceeding. There is no full review of the company’s rates.
“If we are going to buil these plants, which we believe are an essentialk part ofour fleet, we’re going to have to ask regulatora to step up,” says Ellen Ruff, Duke’s president of nuclear Duke hopes to propose legislation in the N.C. Generapl Assembly’s short session next year. Ruff says it must be approvesd by 2011 if Duke is to stay on trac to build the Lee plantby 2018. Ruff spoked at an analyst conference Wednesday in New York that also featuredfDhiaa Jamil, Duke’s chief nuclear and Chief Financial Officer David Hauser.
Hauser said Duke won’t be able to financed nuclear development unless laws are changed to ensure utilitiews can recover their Ruff saidcurrent N.C. law does allow Duke to recovetr its financing costs before a nuclearf plantis built. But Duke can’t add thoser expenses into its rates unless regulators give their OK in a generapl review ofthe company’s The also must decide whether construction costz of such a project were prudenf and reasonable after the plant is built. That decision is part of a full review ofthe company’s rates as Duke contends such rate-setting procedures are cumbersome, expensive and give no certaintyg that its full costsd can be recovered.
In their Ruff and Jamil talkexd up the advantagesof Duke’x nuclear fleet. They credited the low cost of energy from nucleart plants withkeeping Duke’sd rates the lowest in the Ruff said the Lee if built, would reduce Duke’s carbon emissionws by 35%. She said the project will provide 400 to 700 permanentf jobs at the plantnear Gaffney, and a similar number of permanenrt support jobs in the region. Plant construction will providw 1,400 to 1,800 temporary jobs from 2012 to when the second oftwo 1,117-megawatg plants is scheduled to be completed. Ruff concedefd that getting N.C.
law changed will be “We are far away right now,” she “But (the law) needs to Asked if Duke would consider building the Lee plant withournew legislation, she said simply, “Ww have to have it.”