North Carolina Economic Development Guide

2017

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22 N O R T H C A R O L I N A E C O N O M I C D E V E L O P M E N T G U I D E Rocky Mount, like more than 30 other municipalities in eastern North Carolina, is a member of the North Carolina Eastern Municipal Power Agency. The group for decades purchased power both wholesale and through ownership stakes in about a half dozen power plants and then distributed it to 270,000 local customers, who sometimes railed about high prices. In 2015, a subsidiary of Duke Energy bought the agency's generating stakes for $1.25 billion and in turn agreed to sell it wholesale power for 30 years. "After the sale, we became a wholesale customer of Duke, and the pipeline will provide an additional stable source of shale gas from West Virginia and western Pennsylvania that's less expensive than gas from the Gulf Coast area for electric generation," Worsinger says. "There were a lot of concerns about our power costs. Now, we'll have rate parity." Pending approval by the Federal Energy Regulatory Commission in early 2017, the pipeline will soon inch from the mountains near Clarksburg, W. Va., a total of nearly 600 miles through central Virginia to North Carolina's Northampton County, and from there, to its terminus in Robeson County. It's an expensive undertaking — the construction impact in North Carolina alone will be about $680 million and create more than 4,400 jobs. Virginia's Dominion Resources Inc., which will build and operate the pipeline, originally planned to own 45%, while Duke Energy, the nation's largest utility holding company, would own 40% and Piedmont would own 10%. (Duke agreed to sell an undisclosed portion of its interest in the project to Dominion following the acquisition of Piedmont.) AGL Resources Inc., the Atlanta-based parent company of Virginia Natural Gas Co., will own 5%. Natural-gas use is expected to increase about 3.5% annually through 2035. "Piedmont saw the growth in demand, and realized it didn't have enough capacity to meet it," says Duke Energy's McGee. "Utilities like Duke and Dominion are moving away from coal and more to natural gas for a lot of reasons. Some are environmental, but also, some plants have just simply aged out and it's not economical to bring them up to emissions standards. We've already retired 11 coal plants in North Carolina and built newer, more effi cient gas plants," including several in eastern North Carolina. After Duke and Piedmont sought a builder and operator for the pipeline, Dominion won the bidding. Its subsidiary, Dominion North Carolina Power, also supplies about 120,000 electricity customers in northeastern North Carolina, including the Outer Banks. Helping set the stage for the pipeline is North Carolina's longstanding reliance on a sole source for the entire state's natural gas. Snaking through the Piedmont countryside west of Charlotte and northward, the Transco pipeline, owned by Tulsa, Okla.-based Williams Cos., began as a single line in the 1950s and has since expanded into four side-by-side lines along the same right of way. Transco, short for Transcontinental, is the largest natural- gas conduit in the country, carrying 11 billion cubic feet of gas per day, about seven times what the Atlantic Coast Pipeline will carry. It supplies North Carolina, mostly through Piedmont Natural Gas, and much of the East Coast, including half of the gas used in New York City. Branching out from the main transmission line is a web of distribution lines in North Carolina, fueling many users such as Nucor, 200 or more miles from the main line. Chaff ee, the NCEast Alliance CEO, explains Transco's limitations. "When you're at the end of the distribution line, pressure drops as you get farther and farther from the source," he says. "If all of a sudden you're in the month of SOME SAY NATURAL GAS AND RENEWABLES AREN'T COMPATIBLE, BUT NATURAL GAS WILL IN FACT FOSTER GROWTH IN THE RENEWABLES INDUSTRY. … IT'LL HELP MAKE THOSE PLANTS VIABLE AND ECONOMICAL." D A V I D T R U S T Y P I E D M O N T N AT U R A L G A S " Facilities such as Duke Energy's 620-megawatt Buck Combined Cycle Station in Rowan County combine gas combustion turbines and steam turbines to convert natural gas to electricity. PROVIDED BY DUKE ENERGY

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