ML19269C470
| ML19269C470 | |
| Person / Time | |
|---|---|
| Site: | Harris  |
| Issue date: | 01/23/1979 |
| From: | Trowbridge G SHAW, PITTMAN, POTTS & TROWBRIDGE |
| To: | |
| References | |
| NUDOCS 7902030014 | |
| Download: ML19269C470 (166) | |
Text
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In the Matter of )
) DOCKET NOS. 50-400, CAROLINA POWER & LIGHT COMPANY ) 50-401, 7
(Shearon Harris Nuclear Power ) 50-402 Plant Units 1, 2, 3, and 4) ) and 50-403 APPLICANT 'S RESPONSE TO CONSERVATION COUNCIL OF NORTH CAROLINA AND WAKE ENVIRONMENT, INC.'S MOTION TO REMAND TO LICENSING BOARD FOR FURTHER HEARINGS __
By motion dated January 8, 1979, Conservaticn Council of North Carolina and Wake Environment, Inc. (intervenors in the above-captioned proceeding)(hereinafter "Intervenors")
moved to the Commission "to remand to the Licensing Board the issue as to whether there is a need for the proposed (Harris]
facility within the time frame set forth in the construction permits and to direr.t the Licensing Board to take further evidence regarding this issue." In. support of its motion, Intervenors point to an order entered on December 28, 1978 by the North Carolina Utilities Commission (hereinafter "NCUC")
which formally adopted a 1978 load forecast and capacity plan for North Carolina. The load forecast and capacity plan is contained in a report entitled, Future Electricity Needs for North Carolina: Load Forecast and Cacacity - 1973, (December, 7 9 0 2 0 3 0 0\'k
1978)(hereinafter "NCUC Report"), previously forwarded by letter from Applicant dated January 3, 1979, to the NRC Office of Nuclear Reactor Regulation with a copy to the Commissioners, among others.1 Intervenors also note that the NCUC has scheduled a hearing to be held in mid-year 1979, whereby Applicant and other utilities serving customers in North Carolina will be required to demonstrate why their construction schedules should not be modified to match the NCUC capacity plan. Intervenors further move that "the Commission direct the Licensing Board to make an independent investigation of the issues to be covered in the NCUC mid-1979 hearings." For the reasons set forth below, Applicant requests that the Commission deny Intervenors' motion.2 1 The NCUC Report is incorporated herein by reference.
2 It is unclear to Applicant what relief Intervenors are seeking in their motion. Contrary to the requirements of 10 C.F.R. S 2.730(b), Intervenors have not stated with particularity the relief sought, much less the grounds for the motion. Intervenors have not asserted that based on the information in the NCUC Report the construction permits for the Harris units should be suspended or in any way amended.
Intervenors have not asserted that there is no longer a need for the Barris Plant or that the new forecast and the projected revisions to the construction plan could conceivably result in more than a slight modification to the construction schedule for the Harris units. As far as Applicant can surmise from Intervenor's motion, Intervenors simply would like the Licensing Board to "take further evidence regarding {the need- fo r -powe r ] issue" and to make an " independent investigation of those issues which are to be covered" by the NCUC in hearings to be held in mid-1979. It is also unclear whether Intervenors would have the Licensing Board provide such a duplicative function prior to, concurrent with, or subsequent to the NCUC's hearings.
remanded issue. The Licensing Board's jurisdiction in this proceeding is limited to the one issue of Applicant's management capability as per the Commission's Order of September 5, 1978. The Appeal Board has retained jurisdiction only with respect to the radon issue.4 Within thirty days after the date of an Appeal Board decision, the Commission may "in cases of exceptional legal or policy importance", review the decision on its own motion. 10 C.F.R. S 2.786(a). The Appeal Board decision was dated August 23, 1978. The only action by the Commission between the Appeal Board decision and thirty days thereafter was to issue the September 5, 1978 Order remanding the proceeding to the Licensing Board for further hearings on Applicant's management capabilities. The remand was prompted by the concerns expressed in the August 30, 1978 letter from the Licensing Board. The Commission did not move to review any other aspect of the Appeal Board decision nor did the Commission state that it was reserving its jurisdiction over any other aspect of the Appeal Board decision. No other party filed a petition for review with the Commission within the fifteen day period required by 10 C.F.R. S 2.786(b)(1).
As contemplated by 10 C.F.R. S 2.770 when the Commission reviews a decision it may " limit the issues to be reviewed". It is at least implicit in the regulations with 4 See note 3 suora.
respect to the Commission's review of Licensing Board and Appeal Board decisions (see 10 C.F.R. S 2.770 and 2.786) that the findings and decisions concerning issues, which the Commission in its discretion choses not to review, represent the final findings and decisions of the Commission. This should be especially true where initiation of the sole remanded issue here was in response to the Licensing Board's administrative communication with the Commission. This interpretation of the Commission's jurisdiction in this proceeding is consistent with the rule of practice, based on sound policy that, when an issue is once decided and reviewed, that should be the end of the matter. The unreserved decision on a question of law or fact made during the course of litigation settles that question for all subsequent stages of the suit.5 INTERVENORS HAVE NOT MET AND CANNOT MEET THE BURDEN OF PROOF REQUIRED OF THE MOVING PARTY BEFORE THE COMMISSION CAN REMAND TO THE LICENSING BOARD, REOPEN THE RECORD AND RECONSIDER AN ISSUE PREVIOUSLY FULLY CONSIDERED AND DECIDED BY THE LICENSING BOARD AND APPEAL BOARD We are reluctant to have the Commission deny Intervenors' motion solely for failure to state with 5 Barrett v. Baylor, 457 F.2d 119, 123 (7th Cir. 1972)
(citations omitted)(distincuished in Public Service Company of Indiana (Marble Hill Nuclear Generating Station, Units 1 and 2), ALAB-493, 8 NRC 253, 259-60 (1978)); Cf. Public Service Company of New Hampshire (Seabrook Station, Units 1 and 2), ALAB-513, 8 NRC (December 21, 1978).
particularity the relief requested and the grounds for such relief, or for want of jurisdiction. A party could properly fashion a petition to reopen the record on the basis of newly discovered evidence and challenge a construction permit. See e.a. 10 C.F.R. S 2.206. Assuming arouendo that the Commission has jurisdiction to entertain this motion 6 and that Intervenors had fashioned an understandable motion to remand to the Licensing Board, to reopen the record and to reconsider the issue of the need for the plant (with some relief requested),
the motion should be denied because Intervenors have failed both to offer a significant new circumstance, new trend or new fact sufficient to justify reopening the record and to demonstrate that a different result would have been reached initially had such new information been considered.
In its initial decision, the Licensing Board found that "the four Shearon Harris Nuclear power units will be needed as now scheduled, or sooner, and that this need is not diminished by increased consumer use of alternative energy sources or energy conservation or increasing electrical rates over the next 15 years." 7 NRC at 139. The Licensing Board 6 In Duke Power Company (Catawba Nuclear Station, Units 1 and 2), ALAB-359, 4 NRC 619, 621 (1976), the Appeal Board similarly dismissed a motion to reopen where the issue of jurisdiction was unclear (but the proper disposition of the petition was clear) by assuming arouendo jurisdiction was with the Appeal Board.
indicated that its conclusions as to need-for-power would remain unchanged "even if forecasts credicted an even lower peak demand in the forecasted period". (emphasis supplied).
The Board also noted that " applicant has in the past demonstrated that it is ready to and capable of deferring its scheduled construction when required by conditions in its industry." For example, the Board noted that CP&L "could certainly delay its nebulous 1150 megawatt nuclear plant labelled ' SRI' which is currently scheduled for operation in 1989." Id.
In ALAB 490, the Appeal Board affirmed the Licensing Board's initial decision while specifically addressing only one issue, i.e. the need for the power to be generated by the facility. The Appeal Board noted that following the close of the evidentiary hearing , the Applicant transmitted to the Licensing Board for its information (1) a revised forecast which embodied somewhat lower growth rates than had the earlier forecast proffered by its witness; and (2) the newest (1978)
NCUC Public Staff forecast of growth rates. The new forecasts predicted a lower growth rate than the forecasts that were in evidence at the hearing. 8 NRC at 238-239. In its decision, the Appeal Board gave great weight to the NCUC forecast. NCUC is under a statutory obligation to keep current analyses of long-range needs for expansion of facilities for the generation of electricity in North Carolina. Where the NCUC forecast was subject to scrutiny and cross-examination and not found to be flawed, the Appeal Board held that the NRC could attach heavy reliance on the judgment of the local Commission which has a legal obligation to ensure that utilities meet customer demands. 8 NRC at 240-241.
The NCUC Report relies primarily on the same 1978 NCUC Public Staf f forecast that Ts before the Licensing Board and Appeal Board. The NCUC has determined that the probable range of annual peak load growth for Applicant through 1992 is 4.4% to 6.5%. Within this range the most probable peak load growth rata for planning was found to be 5. 2%. NCUC Report at
- 9. In reaching this conclusion, the NCUC basically adopted the NCUC Public Stuff's 1978 base case forecast of 6.7% growth and qualitatively adjusted it to account for actual 1978 peaks and to incorporate the NCUC's belief that conservation and load management can reduce the rate of peak load growth. Id. at 19-21. The NCUC recognized, however, that the proposed reductions " depend upon increased levels of conservation and load management" (id. at 21) and stated that "significant efforts should be expended by the utilities to help effect
. . . changes in usage patterns." Id. at 22.
Based upon its expectation of achieving a reduction in the rate of growth to 5.2%, the NCUC concluded that the inservice dates for Applicant's units under construction could be extended at least one year, but in no case greater than two years and still maintain adequate reserves. Id. at 22 and 24.
The NCUC recognized, however, the " paucity of conrete data available . . . concerning actual methods of achieving the expected levels of conservation and load management" (id. at
- 26) and its " responsibility to insure that the continued economic growth of the state is not impaired by lack of adequate utility services" (id. at 27), specifically noting that industry expanded in 1978 at about twice the rate of the previous year (id. at 26). Therefore, the NCUC deferred any decision to require Applicant or other electric utilities to adjust their construction schedules until after completion of hearings planned for mid-1979. Before any decision to require adjustment of construction schedules the NCUC desires to examine more detailed projections of industrial usage and the planning model of the State Budget Office, in addition to the information to be provided by the utilities. Id. at 26-27.
On December 20, 1978, Applicant submitted a revised forecast and construction schedule to its Board of Directors (which along with the NCUC Report was submitted to the Of fice of Nuclear Reactor Regulation with copies to the Commission by letter of January 3, 1979).7 Applicant also forecasts a slightly slower growth (5.35% through 1992) than the Company's 7 Applicant's revised forecast and capacity plan are incorporated herein by reference.
previous forecast (5.7%). Applicant's generating capacity addition schedule eliminates a 1150 MW undesignated nuclear unit (" SRI") formerly projected for 1989 and adds two undesignated 720 megawatt units for 1991 and 1992, respectively. However, no changes in the construction schedule or inservice dates are currently projected by Applicant for units under construction, including the four Harris units.
The burden required of a moving party to reopen the record and the sound policy reasons behind that burden were articulated in denying a motion for reconsideration of the need- fo r-power issue on the basis of new avidence in Duke Power Company (Catawba Nuclear Station, Units 1 and 2), supra at 620-21, and bear repeating here:
After a decision has been rendered, a dissatisfied litigant who seeks to persuade us - or any tribunal for that matter - to reopen a record and reconsider "because some new circumstance has arisen, some new trend has been observed or some new fact discovered," has a difficult burden to bear. The reasons for this were cogently given by Mr. Justice Jackson more than thirty years ago in ICC v. Jersev Citv, 322 U.S. 503, 514 (1944):
One of the grounds of resistance to administrative orders throughout federal experience with the administrative process has been the claims of private litigants to be entitled to rehearings to bring the record up to date and meanwhile to stall the enforcemer* of the administrative order. Administrative consideration of evidence - parcicularly where the evidence is taken by an e.:aminer , his report submitted to the parties, and a hearing held on their exceptions to it - always creates a gap between the time the record is closed and the time the administrative decision is promulgated.
This is especially true if the issues are difficult, the evidence intricate, and the consideration of the case deliberate and careful. If upon the coming down of the order litigants might demand rehearings as a matter of law because some new cir:umstance has arisen, some new trend has been observed, or some new fact discovered, there would be little hope that the administrative process could ever be consummated in an ord be subject to reopening.gr that would not This " difficult burden" includes a showing that "a different result would have been reached initially had [the new information] been considered".9 The Appeal Board has consistently ruled that a minor change in the forecast of the electric demand in an applicant's service area is not significant new evidence that would warrant reopening a proceeding on a construction permit application.
The decisions of the Appeal Board have recognized the
" substantial marcin of uncertainty" inherent in any forecast.
8 Accord, United States v. ICC, 396 U.S. 491, 521 (1970);
Northern Indiana Public Service Company (Bailly Generating Station, Nuclear-1), ALAB-227, 8 AEC 416, 418 fn, 4 (1974);
Cleveland Electric Illuminating Company (Perry Nuclear Power Plant, Units 1 and 2), ALAB-443, 6 NRC 741, 750-51 (1977).
9 Northern Indiana Public Service Company (Bailly Generating Station, Nuclear-1), sacra, at 418, citina Unarco Industries, Inc. v. Evans Products Company, 403 F.2d 638 (7th Cir. 1968); and Knight v. Hersh, 313 F.2d 879 (D.C. Cir.-1961).
Thus in Niacara Mohawk Pcwer Corporation (Nine Mile Point Nuclear Sta. tion, Unit 2), ALAB-264, 1 NRC 347, 365-66 (1975),
the appeal Board found a two year difference between applicant's and intervenors' forecasts within the margin of uncertainty. A two year difference in the forec asted need for the plant was also found to be within the margin of uncertainty in Kansas Gas and Electric Company (Wolf Creek Generating Station, Unit 1), ALAB-477, 7 NRC 766, 770 (1978), and, thereby, the new forecast was insufficient new information to grant a petition for reconsideration. Even if the NCUC adopts its proposed capacity plan based on its new forecast, the inservice dates for Applicant's units under construction could be extended generally only one year, and in no case greater than two years. NCUC Report at 22 and 24.
Here, there really is little new information. The NCUC Report is based on the NCUC Public Staff forecast which was befort the Licensing Board and Appeal Board. While the actual 1978 peaks are now available, the main rationale of the somewhat reduced probable peak load growth rate (5.2%) for planning purposes is a more optimistic view of the effects of O
conservation and load management. Id. at 19-21. This 10 The probable range of annual peak-load growth for Applicant is 4.4% to 6.5%. NCUC Report at 9. Under Applicant's present construction plan for the Harris units, Applicant would not have sufficient reserves if the high-end of that range (6.5%) were achieved. See optimism is admittedly based on a " paucity of concrete data".
Id. at 26. The NCUC recognizes the paramount importance of flexibility in its capacity plan. Id. at 17. The NCUC has the responsibility of ensuring that the continued economic growth of the state is not impaired by a lack of adequate utility service. Id. at 27. Thus, the NCUC plans annual updates of its forecast and capacity plan. Id. at 17. Flexibility will permit delays in construction schedules if conservation and load management programs are even more successful than predicted, or acceleration of construction schedules if industrial growth is faster than predicted or if conservacion and load management programs do not significantly impact the peakload growth rate. Because the NCUC recognized the inherent uncertainties in its own forecast and capacity plan, applicant and other utilities are not required to delay their construction schedules pending further examination of these issues in detail in mid-year 1979. Id. at 27.
It is particularly inappropriate that Intervenors petition the Commission to " direct the Licensing Board to make an independent investigation of the issues to be covered in the f NCUC mid-1979 hearings." As stated by the Appeal Board in (continued) 7 NRC at 138. It is reasonable for a utility company to favor the high side of forecast load demand to ensure it is always prepared for unexpectedly high demands. Niagara Mohawk Power Corporation (Nine Mile Point Nuclear Station, Unit 2), supra at 366.
Rochester Gas and Electric Corcoration (Sterling Power Project Nuclear Unit 1), ALAB-502, 8 NRC , (slip opinion at 5)(October 19, 1978), in response to a petition to reopen the record on need-for-power, "little useful purpose would be served were we now to undertake a duplication of the inquiry being made by the state body (with jurisdiction over the issue]." Further, as established by the Appeal Board decision in this proceeding, the findings of the NCUC, as that state body charged by law with the responsibility of providing up-to-date analyses of, inter alia, the probable future growth of the use of electricity, are entitled to be given great weight. 8 NRC at 240. 'ae National Environmental Policy Act does not require a completely independent investigation of the projected load forecasts of each applicant for a construction permit in the first instance; " heavy reliance" may be placed on the judgment of local regulatory bodies. There is no rational basis for suggesting that a NRC Licensing Board should independently investigate a state utilities commission's annual review of electricity forecasts and capacity plans, especially where the Licenning Board and Appeal Board have already found the benefit of the power from a facility, now under construction, is needed and outweighs any environmental impacts
- a determination based, in part, on the same state utilities commission's earlier credible findings.
"'Need for power' is a shorthand expression for the
' benefit' side of the cost-benefit balance which NEPA mandates for a proceeding considering the licensing of a nuclear power plant." Public Service Co. of Nev Hampshire (Seabrook Station, Units 1 and 2), ALAB-422, 6 NRC 33, 90 (1977). At the outset, inqui.y must be made into whether there exists a genuine need for the electricity to be produced. Thereafter, the focus shifts to the relative costs and benefits of alternatives to the proposed facility. Finally there is an overall balancing of costs and benefits; the costs associated with the selected alternative must be balanced against the benefit achieved by meeting the degree of demand anticipated. Vermont Yankee Nuclear Power Corporation (Vermont Yankee Nuclear Power Station), ALAB-179, 7 AEC 159, 175-76 (1974). In other words, the need-for-power issue is important to ensure environmental costs are not incurred where there is no countervailing benefit. A need-for-power in Applicant's service area was found and the Harris facility was found to be the preferred alternative. The benefit from the power to be generated by the plant was found to outweigh any environmental impacts.
Construction activity has been on-going at the Harris site since the issuance of a constcuction permit over a year ago. As can be seen in the photographs attached to the Affidavit of Mr. M. A. McDuffie (attached hereto as Appendix A) and as attested to by hr. M. A. McDuffie, considerable progress has been made in placing concrete and reinforcing steel at the plant site, particularly in the lower elevations of the Unit 1 power block. In addition, the main reservoir has been cleared and work is proceeding on the dam where Applicant is excavating, cleaning, mapping and grouting the core trench.
The west auxiliary reservoir has been cleared and work is progressing on excavating, cleaning, mapping and grouting the core trench for that dam. In all, Unit 1 is 12% complete while Units 2, 3, and 4 are less than 1% complete. Applicant has thus far spent $570,000,000 on the Harris project and has outstanding contractual commitments for an additional
$269,000,000. Approximately 3,400 personnel are employed working on the Harris construction effort.
Thus, the environmental impacts of the Harris facility have to a large extent been realized. Considerable economic resources have been expended. The actual cost-benefit balance at this moment is heavily tipped to the cost side, awaiting ' e expected benefits. Rehashing the need-for-power issue at this point makes no sense. It is no longer relevant in the NEPA context, particularly where almost all non-operational environmental impacts have already occurred and where even with a change in the inservice date for Harris Unit 1 to coincide with the capacity plan in the NCUC Report, construction work would not be suspended. See Appendix A at 2-3. Whether any unit of the Harris facility should be delayed from its present construction schedule is purely an economic issue, which is very much the concern of the NCUC. The Appeal Board decisions discussed acove, which declined to reopen the record and reconsider the need-for-power question due to new forecasts, have all the more effect here where the issue of the delay of units under construction is a straightforward economic issue, exclusively within the jurisdiction of st 'te regulatory bodies.
Respectfully submitted, SHAW, PITTMAN, POTTS & TROWBRIDGE A% -
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Dated: January 23, 1979 APPENDIX A AFFIDAVIT OF M. A. MCDUFFIE M. A. McDuffie, having been first duly sworn, hereby deposes and says as follows.
- 1. My name is M. A. McDuffie. My business address is Carolina Power & Light Company, 411 Fayetteville Street Mall, Raleigh, North Carolina 27602.
- 2. I an employed by Carolina Power & Light Company as Senior Vice President, Engineering and Construction. As Senior Vice President in charge of the Engineering and Construction Group, I am responsible for supervision of personnel in the Power Plant Engineering Department, the Power Plant Construction Department, the Engineering and Construction Support Services Department, the Technical Services Department, and the Transmission System Engineering and Construction Deparrment who have responsibilities for the engineering, design and construction of the Shearon Harris Nuclear Power Plant.
- 3. Since the construction permit was issued for the Shearon Harris Plant in January,1978, construction has proceeded at an accelerated pace in order to recover time previously lost in the licensing process.
Conettruction is progressing in three main areas. These are (1) the plant site, (2) the Main Reservoir, and (3) the West Auxiliary Reservoir. Relative locations of these facilities are noted on Figure 1, Vicinity Map.
At this stage of construction, our major efforts at the plant site are directed toward placing reinforcing steel and concrete in the lower elevations of the Unit 1 power block. The Unit 1 power block (as shown on Figure 2) is composed of Containment 1, Reactor Auxiliary 1, Reactor Auxiliary Common, Turbine 1, Fuel Handling and Waste Processing. Most foundation mats for these buldings have been placed and walls and columns are beginning to rise. The floor liner plate has been installed and installation of the wall liner plate is active in Containment 1. Other work in progress can be seen on Figure 3, which is an aerial photo of the plant site.
The Main Reservoir has been cleared except for about 250 out of a total of 4,000 acres and work is proceeding on the dam where we are excavating, cleaning, mapping and grouting the core trench. The diversion conduit is also being installed. The West Auxiliary Reservoir has been cleared and work is progressing on excavating, cleaning, mapping, and grouting the core trench for that dam. In all, Unit 1 is 12% complete.
While Units 2, 3, and 4 are each less than 1% complete, becausa of the unique nature of the site, major environmental i= pacts associated with site utilization have occurred for these units as well as for Unit 1.
- 4. As a result of construction activities to date, most of the non-operational environmental i= pacts associated with plant construction have already occurred and major co=mitments of resources in the form of equipment and supplies have been made as a result of the advanced stage of procurement of the nuclear steam supply system. Not only has most of the 4,000-acre Main Reservoir been cleared (see Figure 4) , but so too has 2
the West Auxiliary Reservoir. In addition, excavation has begun for both the Main and Auxiliary Dams (see Figure 5).
- 5. As of December 31,1978, just over $570 million has been spent on the Harris project. At the present time there are approximately 3,400 personnel actively associated with engineering, design or construction activities. In addition to the $570 million already expended on the proj ect , another $269 million in contractual obligacions is currently outstanding.
- 6. Under no presently foreseeable shift in in-service dates, including the in-service schedule proposed in the North Carolina Utilities Commission's December 1978 Load Forecast and Capacity Plan, would it be more economical to halt construction than to adjust the pace of construction. Neither would a halt in construction associated with a change in in-service dates materially reduce or alter the environmental impacts which are associated with utilization of the Harris site.
k & kWM. A. MCDUFFl?
Sworn to and subscribed before me this s I'd day of s. c. Z .. e , 1979.
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UNITED STATES OF AI1 ERICA NUCLEAR REGULATORY CCMMISSION In the Matter of )
)
CAROLINA POWER & LIGHT COMPANY ) Docket Nos. 50-400
) 50-401 (Shearon Harris Nuclear Power ) 50-402 Plant, Units 1, 2, 3 and 4 ) 50-403 CERTIFICATE OF SERVICE I hereby certify that copies of the foregoing
" APPLICANT'S RESPONSE TO CONSERVATION COUNCIL OF NORTH CAROLINA AND WAKE ENVIRONMENT, INC. ' S MOTION TO REMMD TO LICENSING BOARD FOR FURTHER HEARINGS" have been served upon each of the persons listed on the attached service list by mail, postage prepaid, or by hand-delivery, this 23rd day of January, 1979.
\
c s , . John H. O'Neill, J . Dated: January 23, 1979
UNITED GTATES OF AMERICA NUCLEAR REGULATORY COMMISSICN In the Matter of )'
)
CAROLINA POWER & LIGHT COMPANY ) Docket Nos. 50-400
) 50-401 (Shearon Harris Nuclear Power ) 50-402 Plant, Units 1, 2, 3 and 4) ) 50-403 SERVICS LIST The Honorable Joseph M. Hendrie Dr. J. V. Leeds, Jr.
Chairman 10807 Atwell U.S. Nr. clear Regulatory Commission Houston, Texas 77096 Washington, D.C. 20555 Dennis P. Myers, Esquire The Honorable Victor Gilinsky Associate Attorney General Commissioner State of North Carolina U.S. Nuclear Regulatory Commission P. O. Box 629 Washington, D.C. 20555 Raleigh, North Carolina 27602 The Honorable Richard T. Kennedy Charles A. Barth, Esquire Commissioner Office of the Executive Legal U.S. Nuclear Regulatory Commission Director hachington, D.C. 20555 U.S. Nuclear Regulatory Commission Washington, D.C. 20555 The Honorable Peter A. Bradford Commissioner Thomas S. Erwin, Esquire U.S. Nuclear Regulatory Commission P. O. Box 928 Washington, D.C. 20555 115 West Morgan Street Raleigh, North Carolina 27602 The Honorable John F. Ahearne Commissioner Docketing and Service Section U.S. Nuclear Regulatory Commission Office of the Secretary Washington, D.C. 20555 U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Ivan W. Smith, Esquire Chairma.. Atomic Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555 Mr. Glenn O. Bright Atomic' Safety and Licensing Board U.S. Nuclear Regulatory Commission Washington, D.C. 20555
Table 1 CP&L Load Forecast and Capacity Addition Schedule LOAD ADDITION YEAR OM) OM) 1979 S 6056 W 6056 1980 S 6442 720 W 6442 1981 S 6816 W 6816 1982 S 7223 720 W 7223 1983 S 7627 W ,, 7627 1984 S 8079 900 W 8079 1985 S 8536 720 W 8536 1986 S 8980 900 W 8980 1987 S 9449 W 9449 1988 S 9911 900 W 9911 1989 S 10389 W 10189 1990 S 10859 900 W 10859 1991 S 11400 720 W 11400 1992 S 11930 720 W 11930 5.357 1979-1992 Legend: Summer S Winter W
e. ee FUTURE ELECTRICITY NEEDS FOR NORTH CAROLINA: ~~ LOAD FORECAST AND CAPACITY PLAN 1978 NORTH CAROLINA UTILITIES COMMISSION RALEIGH, NORTH CAROLINA DECEMBER 1978 e M e ep M et
TABLE OF CONTI:NTS Page EXECUTIVE
SUMMARY
. . . . . . . . . . . . . . . 1 I. INTRODUCTION . . . . . . . . . . . . . . . . . 3 II. ' HIE 1978 LOAD FORECAST AND CAPACITY PLAN . . . 7 A. Introduction . . . . . . . . . . . . . . . . 7 B. "indings of Fact . . . . . . . . . . . . . . 9 C. Load Forecast and Capacity Plan . . . . . . 16 III. FORECAST OF NATIONAL A!!D STATE ECONOMIC AND DEMOGRAPHIC GROUTH . . . . . . . . . . . . 34 A. Introduction . . . . . . . . . . . . . . . . 34 B. The National Forecast . . . . . . . , , , . 36 C. Historical Comparisons Between the Economies of the United States and 11 orth Carolina . . 39 D. The Long-Term Forecast for North Carolina . 42 E. Conclusion . . . . . . . . . . . . . . . . . 45 IV. LONG-TERM ELECTRIC ENERGY AND PEAK-LOAD FORECAST . . . . . . . . . . . . . . 47 A. Introduction . . . . . . . . . . . . . . . . 47 B. The Use of Econometric Analysia . . . . . . 47 C. Forecast of Electricity Sales to Residential Customers . . . . . . . . . . . 51 D. The Forecast of Ele =tricity Sales to Commercial Customers . . . . . . . . . . . . 56 E. The Forecast of Electricity Sales to Industrial Customers . . . . . . . . . . . . 60 F. The Peak-Load Forecast . . . . . . . . . . . 62 G. Comments by Public Witnesses anc Intervenors 67 V. RESERVE CRITERIA, GENERATION MIX, AND CAPACITY PLANS . . . . . . . . . . . . . . . . 71 A. Reserve Criteria . . . . . . . . . . . . . . 71 B. Generation Mix . . . . .. . . . . . . . . . 73 C. Generating Capacity Plan . . . . . . . . . . 83 VI. OUTLOOK FOR CO' >ERVATION AND LOAD MANAGD1ENT; A SURVEY OF ALTERNATIVE CIERGY SOURCES . . . . 87
~ A. Introduction . . . . . . . . . . . . . . . . 87 D. Legislation . . . . . . . . . . . . . . . . 88 C. Utilities Conmission end Public Staff Activities on Conservation and Load Management . . . . . . . . . . . . . . . . . 91 D. The Electric Utilities' Conservation and Load Management Programs . . . . . . . . . . 95 _. E. Alternative Energy Sources . . . . . . . . . 102 VII. CONCLUSIONS . . . . . . . . . . . . . . . . . . 116
I'.TDEZ OF TABLES Page "E A. Commission Load Forecasts................... 23 "ABLE n. Comm.tssion Plan for Capacity Additions and ReH ements............................. 2n
*M C. Co= mission Load Forecasts, Ca and Ref., cit.nt Reserves.......pacity Plans
............... 25 TABLE 1. Capacity Addition Plans for VEPCO........... 118 TALLE 2. Reserves Which Will Result From Capacity Plans if the VEPCO Forecast Occurs . . . . . . . . . . 119 TABLE 3. Reserves Which Will Result From Capacity Pla m if the Public Staff Forecast Occurs. .. 120 TABLE 4 Levels and Growth Rates of Demographic variables Used in the Public Staff's Energy Forecasts and Load Forecasts......... 121 TABLE 5. Public Staff TREiD Forecast of CPCL Ener Consumption by Custcmer Class...........gy .... 122 TABLE 6. Public Staff TRE11D Forecast of Duke Ener Consumption by Customer Class...........gy
.... 123 TABLE 7. Comparisons of Growth Rates of Electricity Prices and Inflation Measures . . . . . . . . . . . . . . . 124 TABLE CPEL's Energy 8.
Forecast...................... 125 TABLE 9. Duke's Energy Forecast...................... 126 TABLE 10. ^vt.xCD's Energy Forecast..................... 127 TABLE 11. Public Staff's lioneconometric Energy Estimates for the Residential Sector. . . . . . . 128 TABLE 12. Public Staff's Noneconometric Energy Estimates for Commercial Sector............. 129 TABLE 13. CPEL's Load Forecast......................... 130 TABLE 14 Duke's Summ e Peak Load Forecas t. . . . . . . . . . . . 131 TABLE 15. Duke's Winter Peak Load Forecast............ 132 TABLE 16. Public Staff's Capacity Addition Schedule... 133
TABLE 17A. Reserve Margins Based Upon the Public Staff Addition 3chedule........................... 133 TABLE 17B. Loss of Load Probabilities Expected Tron P ublic S ta ff Addi tions . . . . . . . . . . . . . . . . . . . . . . 134 TADLE 18. Public Staf f Projections of Percent of Plant Operated as Base Load, Cycling and Peaking................................. 135 TABLE 19A. CPCL's Capacity Addition Schedule........... 136 TABLE 19D. CP&L's Projected Su=ner Peak Reserves....... 136 TABLE 20. Duke's Summary of Load, Capacity and Reserves.................................... 137 TABLE 21. Duke's Summary of Projected Load Management Goals....................................... 139 w he e m
EIECUTIVE SUMBARY The Gen eral Assembly in 1975 directed the U tilities Commission to develop a nd kee p current an analysis of the long-range need f or electric pt ver in North Carolina. This report is submitted to the Governor and to the Ge neral Asse mbly in compliance with that aandate. In preparing this report, the Co mmission has consider ed evidence presented by the Public Staff - Nori.h Ca rolina Utilities commission, Ca rolina Po we r S Light Company, Duke Power Compan y, Virginia Electric and Power Company, and other parties in Docket Bos. E- 10 0, Sub 32, the load fo r e ca st d oc te t, a nd 5- 100, S ub 78, the conservation and load management do ctet. This report makes the f ollowing findings: 1 The planning pe riod unde r consideration for construction of new genera ting units is 1978-1992.
- 2. The probable range of annual peak-load growth for Carolina Power S Light Company is 4.4% to 6.5%. Eithin this range the most probable peak-load growth rate for planning is 5.2 %, annually.
- 3. The probable range of annual peak-load growth f or Duke Power Company is 4.6 % to 6.7%. Eithin this range the most pro bable pe ak-loa d growth for planning is 5.4%,
annually.
- 4. The gene ra ting re se rves nee ded to ensure system reliability f or Duke, CPGL, and YEPC3 are 20% for both the summer and the win ter pea king seasons.
- 5. The most economical and efficient generation six for Duke, CPSL, and 7EPCO for the years 1978-1992 consists of appror ina tely one-half ba se capacity, one-third cycling capacity, a nd one-sixth peaking capacity.
- 6. The most economical method of electric generation for
~
Duke, CPSL, and YEPCO is a combination of hydroelectric genera tion and coal fired a nd nuclear fueled steam genera tion ; the projected benefits to be derived from the development and opera ti on of renawable energy sources including wind power and solar energy. when added to the combina tion air of hyd ro , coal, and nuclear electric gene ration are in the public interest.
- 7. VEPCO has cancelled n uclear units Surry No. 3 and Surry No. 4 7EPCO's present construction schedule will not meet the required reserve level of 20%.
- 8. Conservation and load management activities by the
2 Commission, the regulated utilities, and the public can significantly i= pact future growth rates in peak-load demand.
- 9. "he capacity addition plans, adopted herein, will enable CP.L and Duke to meet the Cor: mission 's forecast of peak demand for the years 1979-1992 and to have adecuate reserves for contingencies.
- 10. Superior forecasting and load managemant is needed. of the effects of conservation The result of the capacity additica plans, adopted herein, would delay the current construction schedule of CPCL at least one year and would postpone CPCL's proposed units SR1 and SR2 (totaling 2300 MW) beyond this planning period. It would also delay Duke's later plants sir months to one year, but would keep Duke's early plants on schedule for economic reasons.
The Commission will require that the utilities and the Public Staff presant in the mid-1979 hearing a full analysis of the present construction schedules and the reasons, if any, that the u*4 '_ities should not reschedule their construction according to the capacity plans adopted herein. This report anmi nes the studies which underlie the Commission's forecasts and evamines consemration and load management efforts that are underway in North Carolina, as well
- CPCL, as the prospects for alternative energy sources. Duke, and VEPCO will be .6ed to file proposed plans for two voluntary load management programs:
- 1. Utility control of residential water heating, and
- 2. Utility cont:cl of interruptible industrial loads.
The three utilities will also be recuired to offer voluntary, experimental rates which incorporate time-o f-day pricing to customers who either install solar ecuipment, theraal storage equipment, or a combination of the two for the purpose of providing space heating.
3 CHAPTER I INTRO DU CTION In 1975 the North Carolina General Assembly enacted
- 3. 5. 6 2-I l o. l (c) which directed the Utilities Commission to adevelop, publicize, and keep current an analysis of the long-range n eeds for ex pa nsion of f acilities for the generation of electricity in North Carolina, including its es tiante of the probable future growth of the us= of electuicity, the probable needed generating reserven, the extent, size, air and general location of generating plants
,. and arrangements for pooling power . . . .
" The tatute requires the Commission to cond net public hearin gs in the course of making the analysis and developing the plan. The statute further provides that the Commission submit to the Governor and to the appropriate committees of the Ganeral Assembly a report of its analysis and plan.
In January 1977 the Co mmission held its first public hearings pursuant to the statute and, theraafter, issned its first repo rt , entitled Report of Analysis and Plan: Futura Requirements fog Electricity Service to North Car olina - 1977. In that Report the Connission concluded that:
- l. The probable future annual rate of growth in peak load for both Carolina Power & Light Company (C ur.M and Du ke Power Company (Duke) vill be apprcriaately 6.9% during the years 1976-1990.
- 2. The probable needed genera ting reserves will be 15%
to 20% in the sunner and no less than 20% in the vinter.
4
- 3. The economically efficient generating mix for both companies will be one-half base, one-third intermediate, and one-sixth peaking capacity.
- 4. The most economical type of base load capacity f or CPGL and Duke vill be nuclear fuel generation in most cases.
- 5. Euclear power provides acceptable, though not Zero, risk to the public.
- 6. It is the objective of the Commission to encourage the growth of industries which vill improve the systen load f actor through the promotion of interruptible rates.
- 7. Baziana conservation efforts should be encouraged.
On June 3, 1977, the General Assembly amended G.S. Chapter 52 to provide for a Public Staff within the organization of the Utilities commission to represent the usinc a nd consuming public in all matters affecting public utility ratas and service. Eith respect to the long-range forecast of capacity requirements and the capacity expansion plan, G.S. 62-15 was amended to state that-(d) It shall be the duty and responsibility of the public staff to. .. (5) interw ne on behalf of the using and consuming public in all certi.ficate applications filed pursuant to the provisions of G.S. 62-1I0 1, and provide assista nce to the commission in making the analysis and plans required pursuant to the provisions of G.S. 62-110 1 and G.S. 6 2-155; . .. On December 1977, (5, the Public Staff filed with this Commission its J,,9,2,3, Public Staff Report: Analysis p,j Lp_ttg Hanoe Needs f,g,E Electric Generatinc ?acilities in North Carolin a. The Public Staff Report wa s essentially an update of the commission's 1977 Beport of Analysis and Plan, but incorporated new data aad infornation that became availab le after the commission's I S77 Beport was issued. The Public
5 Staff Report also included refinements in the econom etric forecasting models and in the capacity planning techniques. New features included both long-tern economic forecasts for the United States and f or Eorth Carolina and analyses o f the potential beneficial e ffects of conse rva tion, load ma na ge ment, and peak-load pricing. In Februa ry 1978 the Commission held hearin gs in preparation for its 1978 report. The Public Staff and the three major electric utilities (operating in N orth Carolina) presented their forecasts for the grow th in electricity sales and peak load in North Carolina and the generating capacity needed to meet this projected gro wth. Runerous i other parties intervened and participated in the hearings: the Attorney General of North Carolina, the North Carolina Electric seabership Corpoca tion, the Carolina Environmental Stud y Group, the Conservation Council of North Carolina, the Lea gue of V omen Voters, the Joseph Le Conte Chapter of the Sierra Club, and the North Carolina Oil Jobbers Association. In addition, a number of public witnesses provided informatien and consent to the Commission. Thereafter, the Commission held extensive hearinas in July and September 1978 in its Docket No. 5-100, Sub 78. The purpose of this d ocke t a nd the hearings held therein is to investigate the load ma nagement prog rams of the electric utilities and the conservation prograns of the electric and gas utilities opera ting in the state. The publication of
6 the commission's I 978 load forecast report has been delayed in order to assaan the evidence presented in this docke t and to detsemina what effects the load management and conservation programs vill have on the long-range growth of electricity in North Carolina. The Commission's I 978 report, entitled Future Electricity Needs igg, sorth Carolina: Lo.5j Porecast gas cacacity flag - M, is submitted in compliance with the aandate of the General Assembly, as set f acth in G.S. 62-110 1 (c) .
7 CHAPTER II THE 1978 LOAD FOREC AST AND CAP ACITY PL AN A. Introductiq3 General. S ta tu te 62-l j 0.l (c) requires the North Carolina Utilities Commission to prepare and keep current an analysis of the long-ra nge needs for the expansion of electricity generating f acilities in Worth Carolina. To comply wi th this manda te from the General Assembly, the Commission must estima te the probable future growth of the use of electricity, the probable needed generating reserves, and the extent, size, sir, and general location of genera ting capacity to meet the future growth of electricity use. I The Public Staff performed independent analyses of the load growth in CPGL's and Duke's service areas. H owe ve r, the Public S taff adopted and recommended the same growth rates for YEPCO that had been determined by an independent consulting firm f or the Virginia Corporation commission two years previously and reaf firmed by the Virginia C orporation commission Staff in la te 1977. The studies made by the Public Staff, the regulated utilities, and other interest ed parties in the load forecast proceedings presented a wide range of opinion as to the electric generatin g capacity needed in North Carolina over the next 20 years. sost of these studies were based on accepted scientific load forecast me th ods. The se studies incorporate different
8 levels of economic activities, conservation and load mana gement efforts, popula tion novesents, custoser e.cceptance of new appliances, air conditioning and electric heel ing saturation, and other f actors. The Conaission has e valuated these studies in order to estimate the probable future growth of electricity use in sorth Carolina. In making its forecasts and evaluations, the commi== ion takes judicial notice of the conservation and load management evidence which isas presented in its hearings in Docket 5o. 5-100, Sub 78. Duht Power C ompany and Carolina Power & Light Cospany provide 95% of the electricity genecation utilized in North Carolina. Virginia Electric and Power Company (YZPCO) and mantahala Poser and Light Company (Eantahala) supply the remaining 55 of electricity generation. Additional generation required to serve new lo&ds of Mantahala are planned by the Tennessee Talley Authority (TY1) , to whom all of Nantahala's generation is con tracted. YZPCD does not plan to add generating facilities in North Carolina in the foreseechle future. The informa tion presented to the Cocaission concerning the expected groeth on the YEPCO system is inconclusive. The major thrust of the Commission's l978 report is, therefore, directed to the service areas of CPGL and Duke. In making its forecast, the commission has recognized that the public policy of the State of North Carolina enco urages
9 the growth of indnstry in order to provide jobs for and to raise the living standa rds of the ci tizens of the State. Th e Commission has the duty under the Public Utilities Act to ensure that adequate electric service is available a t all times in North Carolina to provide for growth in the State's economy. B. Findinos of Fact
- l. Ike plannine period under consideration for construction 2f Aev cenerating acits is 1978-1992. The current planning period must extend at least la years in order to allow consideration of f uture construction of both nuclear and fossil fueled generating units beca use 14 yea rs must be allowed for designing, licensing, and constructing a nuclear unit.
- 2. The probable I nn ge 21 annua l peak-load crowth for Carolina Power G Licht Co m pa n y is 4,4% to 6.5%. within this canot the most probable peak-load crowth rate for planning (g 1223, annually. The Commission has used a growth rate of 5.2% in derel; ping its load forecast for CPSL as shown in Table 1. The generating capacity addition plan to meet this growth rate is shown in Table B. CP&L's own Jeak-load forecast is 5.72% for the years 1979-1992.
The Commission's use of the 5.2% growth rate is based upon its conclusion tha t CPCL's conservation and load management programs are embryonic and that customer acceptance of these
10 programs will therefore accelerate. Under the Commission's forecast the expected I 985 sanaer peak load is 7,902 59; and the 1990 sunser peak load is 10,182 HW. For the years 1965-1977 the peak-load growth rates for CPGL have ranged from -i.0% (1978) to 24. 8% (1968); within the past five years the range has been from -l.05 (1978) to 9.3% (1977).
- 3. 15;g, probable rance si annual ocak-load crowth is.g P212. Power Company h M 19, M. Within @ ran ce the 3g.g.1 oro bable pea k-loa d growth M plannine h 5. a %,
a nn u allv. The Comeission has used a growth rate of 5.4% in developing its load forecast for Duke as shown in Table A. The generating capacity addition plan to meet this growth rate is shown in Table B. The S.4% growth rate reflects the Commission's conclusion tha t Duke's load man agemen t and conservation programs are pcogressing well and vill continue to gain acceptance among its customers. Duke's own saaner peak-load forecast, which projected a range of growth rates from 5.05% to 6.92% for the years 1979-1990, reflects the effects of its ongoing load management program. Under the Commission's forecast the expected 1985 summer pest load is 13,518 SW; and for the 1990 summer peak load is 17,584 5E. For the years (965-1977 the peal-load growth rates for Duke have ranged from -2 1% (1974) to 18.0% (1968); within the past five years the peak-load growth rate has ranged from -2 1% (1974) to l l .6 % ( 1977) .
11
- 4. The _qe nera t i ne re se rve s needed to enstre system reliability fol Duke, @ , and VEPCO age 201 for both Me sagagg ad De vinter pea kinq seasons. As pointed out by the Public Staff, there is no level of reserve margin that will absolutely guarantee reliability. Although the P ublic staff recommended reserves of 15% to 20% for both seasons, Duke witnesses indicated that 20% reserves are a ainlaus for reliable service to its customers. The commission concludes t ha t , for this planning period, a miniana 20% reserve margin f or bo th summer and winter peaking seasons is reasonable and ne ce ssary. In so deciding, the Commission has considered, am on g other things, the difficulties of the three electric utilities in providing service during 1977 and 1978 and the recommendations of the Federal Energy Regulatory Commission Staff.
- 5. Ihg most economical gasl efficient generation mig Jgg M, E, ansl VEPCO $2I. th_e_ vears I978-I992 consists of ggprorisately one- ha lf b ase ca paci ty , one-third cyclin o capa ci t y, ggd one-sixth Deakinc capacity. The Public Staff pointed out that optimal generation six satisfies the demand for electricity at miniana cost and with acceptable reliability. The studies of the Public Staff concluded that the generation air adopted herein is the proper one for the three major electric utilities serving the State.
- 6. The most economical meth od 2f electric generation f or Duke, CPGt, and 7EPCO is a combination of hydroelectric
12 cenera tion agf co51 fired ni nuclear fueled steau eenera tion; j;h proineted benefits 19 h deri ad from the d evelo cuent and operati on of renewable enerav sources inelad inc M power and solar enerev to add j;oo the sonb ina tion Q of h yd ro, coal, and nuclear electric ceneration a re in the public interest The Public Staff and the utilities presented a number of studies indicating tha t, in the preser.t planning period, nuclear generation is czpected to be more economical than fossil generation f or new base load units. The resnits of the total life studies show that nuclear generation is expected to average ainost six-tenths of a cent per kilowa tt-ho ur less than frssil generation. Generation six vill continue to be reviewed by the commission on an annual basis. vi tnesses at the load forecast bearings in February I978 expressed concern about the safety and reliability of nuclear generation. The issues raised by these witnesses included the problem of storing spent nuclear fuel, the lack of assurance of uranina supply, and the continuing escalation of costs in nuclear plant construction. There vas also evidence that zuclear generation is clean, safe, and available. In addition, evidence in dicated tha t there is increasing opinion among the technical comannity that the hazards to the public from nuclear generation ma y be considerably le ss than the ha=ards from alternative fossil f uel systems, such as coal. Altho ugh it is true tha t increasing costs for nuclear plant construction and
13 operation have narrowed the economic advantages of nuclear power over coal, it is also true tha t nuclear generated electric power still retains a si gnifica n *. economic adv antage over coal and all other alternative neans of base load generation in the southeastern region of the U nited States.
- 7. VEPCO has ca ncelled n uclea r units Sorry Eo. 1 and Surry Io. E. VE PCO's presen t construction schedu le will not meet the recuired reserve level of 2 0%. The Commission has concluded elsewhere in this chapter that, with the cancellatior of Surry N o. 3 a nd S urry No. 4, VEPCO's present construction schedule is insufficient to prevent its systen reserves from falling below the level found necessary by the cornission for adequate and reliable service. The Commission will req uire YEPCO to presen t at the 1979 hearings a full analysis of the company's expected loads and required generation through 1993.
- 8. Conservation 3 pod lond o manaoement activities hI thq commission, Ah3 re c ula t ed Utilities, and the public can siqu ifica ntly ispact futsu crowth ya pea k-loa d in demand. The forecast adopted by the cc<tission in this repo rt is based on the premise that conservation and load management efforts are not a temporary phenomenon but represent permanent changes in the attitude of society toward the use of energy. As a result of increasing nece ssity for funding alternatives to our present energy
I4 sources, significant ene rgy-rela ted legislation has been enacted in the last two years. The North Carolina General Assembly enacted the important Energy Conservation Act of 1977, which encoura ges solar energy and insulation for residential and business use. In addition, the United States Congress has recently enacted the National Energy Conservation Policy Act of l 978. Both of these acts will substantially affect state and local efforts on conservation. The major electric utilities have undertaken conservation and load management programs. Especially noteworthy is the Load sana gement Program of Duke: the company 8s Energy Efficient Structure Program incorporates a conservation rate schedule which offers a acostary incentive by passing along the resultant savings in electric system costs to those residential customers who install insulation in accordance with program standards. Further, the Conaission has entered into cooperative agreements for research and experimentation with the United States Department of Enacgy. Under these agreements, the Commission is undertaking pilot demonstration projects on conservation and load management and is ernaining peak-pricing electricity rates. The Commission has also initia ted Docket No. 5-100, Sub 78, entitied " Investigation of Cost-Based Rat es , Load Banageme nt, and Conservation Oriented En d-U se Activities." Hearings in this docket in
15 July and September 1978 established that numerous and div erse c onse rva tion and load management programs are underway throughout the State.
- 9. Ibe capacitV addition plans, adopted herein, will enable GZE1 a nd Duke 12 seet the Consission's f oreca st 2f g demand 1su; 3he vears 1979- 1992 and tp have adeoua te reserves ing continoencies. This is an interim plan and is subject to revies by the Commission on an annual basis.
Because it is impossible to e xactly p redict the future, the companies must maintain flexibility in their construction schedules in order to economically adjust to changes in pea t-l oad growth as they occur. The utilities will be required in the mid-1979 hearing to show the reasons, if any, why their construction schedules should not be delayed to match the commission's ca pacity plan. New generating f acili ties should be located on sites which are near load centers or ma jor transmission and facilities which have ample water for cooling. Because of the long lead times required, site licensing and preparation have already begun for most f acilities coming into service during the next l0 to 15 years and relocation of those f acilities would not be economical.
- 10. supering f orecast i no of the effects of conservation ggd 193.1 m,gnacement is needed. The commission is directing the utilities and the Public Staff to present detailed analyses concerning these matters in the 1979 hearings. To
16 allow sufficient time those hearings are being moved to mid-year. The forecast of future electrical poser demands, the generation reserve requiremen ts, and the types of new generating capacity will continue to be reviewed by the Consission on an annual basis in order to adequa tely incorporate changing conditions. The Commission, through its S taff and through the Public Staff, vill continue to consider regional interchanges of power and power pooling arrangements by its participation in the Southeastern Re1inbility Council aad the Virginia-Carolin as Interregion planning efforts. C. Id2nd Forwasts 3g51 Capacity 21gg The guestions before the Commission are threefold: 1 What are the most likely load growth rates?
- 2. What levels of reserve capacities are required?
- 3. shat types of plant most economically, safely, and efficiently produce the required capacity?
These questions are interlocking to a great degree. Load growth requires additional load capacity and corresponding reserve capacity. The amount and types of plant affect the reliability of the system and the cost of providing electricity. The cost an d reliability of electricity in turn affact the rate of load growth. As a result of the evidence in its load forecast and load management hearings, the Commission has available to it a
17 vide variety of expected load growths, all dependent upon diff erent levels of economic activity, conservation and load mana ge ment efforts, popula tion novement, customer acceptance of new appliances, air conditioning and electric hea ting saturation, and other factors. This chapter presents the Co mmission's conclusions regarding the projected future electricity requirements in N ort h Ca rolina. The chapters which follow summari=e the evidence of the parties in these hearings. Based upon the best evidence a vailable to the Commission today, the electricity growth plan adopted by the Commission represents a prudent and realistic strategy for meeting our electricity needs. The plan necessa rily dema nds fle xibility in the adopted constr ection schedule. Annual u pda tes of the Commission forecast a nd ca pacity plan will enable the Commission to reflect both improv ements in forecasting techniques and new evidence regardin g the utilization of electricity. Accordingly, the tiaing of later plants must be regarded as tenta tive. The consission has examined in detail the level of reserve capacity which should be required. Reserve ca pacity is necessary to mee t increased capacity requirctente due to severe weather, planned maintenance outages, unerpected equipment o uta ges, unexpected load growth, and other factors. The adeguacy of 'actricity supply directly affects the ability of our citizens to utilize adequa te
18 space conditioning to remain comfortable and healthy. Disrup tion of electricity service at any time has the potential for reducing the econcaic output of the State and, thus, the income of its citizens. In recent periods of severe sea ther, the utilities serving North Carolina have had difficulty, at times, meeting consumer demand, even though high levels of reserves were in place. Seasures are being taken to prevent future occurrence of these antages. Houever, it is important to emphasize tha t reserves must cover probable loads and likely equipment outa ges. Testimony by witnesses from Duke indicates that 20% reserves are the minimum requirement for ce liable opera tion. This is althin the range indicated by the Federal Energy Begulatory Commission (FERC) of IS% to 25% and is consisten t sith the Frac staff reconaandation that the percent reserves should be on the high end of the range in fast growing areas. All witnesses agree that North Carolina is expected to continue to have rates of economic and demographic growth greater than the national average during the extant planning period. Although estimates of growth are less reliable for longer planning periods, the longer plannin g periods also allos more time to effect conse rva tion measures. Because the planning period is tied to the construction time required to build new generating facilities, it is laperative tha t the planned construction schedule be flexible enough in the
19 later years to 'be capable of ad j ustment to meet the requirements of unforeseen changes in load growth. Af ter reviewing recent experience, the commission concludes that a minimum 20% reserve margin is reasonable and necessary. After review of the evidence presented concerning the probabilities of variour occurrences, the most detailed a nd supported of which was that presented by the Public Staff, the commission concludes that the maximum growth rates which should be utilized in planning future capacity are those f or the " base case" presented by the Public Staff. This is essentially a forecast of futsre growth which assumes that the f actors causing the demand for electricity, including conservation and load management practices, will continue unchanged. Plant additions are not now scheduled at a rate fast enough to provide a dequate reserve margins for such loa ds; increased use of conserva tion and load managereat tech niques can be expected to obviate the need for such large neale cons: enetion. Various scenarios of the impact on growth rates of different levels of conservation and load ma nagement techniques we re presented by the Public Staff. Included were the f ollowing: 1 A 15% reduction in electric energy consumption by 1992 (conservation case) :
- 2. A 10% improvement in load factor by 1992 (load manage ent case) ; and
20
- 3. Both of the above.
The effects of either I or 2 are to reduce the average load growth approzinately 15 per year. sany benefits can be gained through increases in conservation and load management. For example, by 1992, CPGL vould have to provide an additional 10,977 HR under the base case but only 5,177 59 under Scesuario 3. For Duke, the required construction would fall from 17,890 59 to 10,770 av. If these savings could be accomplished, the combined construction requirements of CPG 1 and Duke would be reduced by more than $10, billion during this planning period. Significant changes in conservation and load management efforts are occurring and will be of sign 4"ir ant assistance in the 1980's. After examination of the assnaptions underlying each scenario, the Commission cont /.ludes that, based upon the evidence avallable at this time, it is not reason able to expect that both conservation and load management will be practiced substantially enough to produce the effects of the combined load annagement and conservation scenario. However, it does appear that, with effectim effort by utilities, consumer groups and government, combined reductions in 1 cad growth equivalent to the level of either the full load management or full conserva tion scenario can be realized (i.e. , approximately I % reduction in growth from the abase casc a) .
21 Since the time of the hearings, the 1977-1978 winter and 1978 summer peaks have been established at such lower values than had been predic te d. The conaission has taken into account the two additional actual peaks in its adopted load fo reca st. Although some of this reduction was obviously weather rela ted, a substantial c ortion of the remainder must be at tribu ted to concervation and load management measures by cus tomers. The commission expects that customers will continue to add such sea sures in the near term future to aristing installations and to des ign them into f uture expansion and construction. A t some point, however, it can be expected that these seasures will be sufficiently employed so th at normal growth of the economy and population in North Carolina will raise the rates of growth a g ai n. The Commission concludes that the most reasonable expectation for the possible reduction in abase case" growth ra tes over the planning period is 60% of the combined load manage ment a nd conserva tion scenario reduction. The commission concludes t ha t , for planning purposes, CPGL's load can be expected to grow at an average annu al rate of 5.25. Duke's load can be expected to grow at an av er age annual ra te of 5. 4 % . The se growth rat es are approrisately 15% (CPCI) and 13% (Duke) less than the Public Staff base case recommendations. These red uc tions depend upon increased levels of conserva tion and load ma na ge ment. The Commission concludes that significant
22 effort should be expended by the utilities to help effect such changes in usage patterns. The Commission presents in Table a the adopted load growths ured in developing its plan for the capacity additions shown in Table B. Table C shows the percent reserves which will result if these lead forecasts and capacity addition plans a re me t. The result of these capacity addition plans is to delay the cor plete construction schedule of CPGL at least one year and to delay CPGL's proposed units SHI and SR 2 (totaling 2300 5E) completely boycad the planning period. CPGL provided no evidence, either economic or operational, to indicate that its present construction schedule should not be delayed to match the expected load growth. Duke, on the other han d, provided evidence that the ratepayers would benefit from lower not operating costs if its early units are completed as previously scheduled. The Public Staf.f supported this evidence and the Commission concurs.
- 3 TABLE A. Co mJ.ssion Load Forecasts (MW)
Carolina Power & Light Cc=pany Duke Power Co=pany YEAR LOAD (MW) LOAC ( M'.C 1979 5 5830 9860 W 5930 10070 1980 S 6133 10392 W 6238 10614 1981 S 6452 10954 W 6563 11187 1982 5 6788 11545 W 6904 11791 1983 5 7141 12169 W 7263 12428 1984 5 7512 12!26 W 7641 13099 1985 S 7902 13518 W 8038 13806 1956 S 8313 14248 W 8456 14552 1987 5 8746 15010 W 8896 15337 1988 S 9200 W 15829 9358 16166 1989 5 9679 W 16683 9845 17039 1990 S 10182 17584 W 10357 17959 1991 S 10712 18534 W 10895 18929 1992 S 11269 19535 , W 11462 19951 5.2% 5.4% Per Per Year Year Legend: Sc=mer S Winter W
24 TABLE B. CcI:: mission Plan for Capacitf Additions and Retirements Carolina Power & Year I.1ght Cor::pany Duke Power Cc:::pany e l McGuire 1979 Sl 8 we l @ 1180 W 1980 5! l We i I i Roxboro 1981 5! 4 720 MW !' 2 1180 Mw n l1 1145 MW 1982 S!
"l , l e
' MN !
1983 S
.Q , 720 MW l @ 1145 MW (69 MW) 1984 3l l (228 Mw) wi .
I 1985 @ Harris 900 MWjl 1280@ Cherokee 3 wl, MW (251 Mw) 1986 S! W. @ 720 Mw l (93 MW) t g 1987 Sl Wg l(2)1280MW a e 8 1988 S! @ 900 Mw!l Bad wi I l @ Czeek500 .w Perkins 1989 S!w j
@ 900 MWs h 1280 MW 1990 S w ,j ,
l @ 1280 Mw e 8 1991 S' w, @ 900 Mwf i Q 500 MW 8 Inter:sediata l 1992 Sl u, @ 720 MW j
, @ 1280 MW Lagend Retirements ( )
Una: Number Summer S Hinter W
25 TABLE C. Cort: mission Load Forecasts, Capacity Plans _nd Resultant Reserves Carolina Power & Licht C moany Duke Pnwer Ccspany LCID AODITION CAPAC!n RESERVES LOAO AOD 2'l* 2 CN CAPACITi' yan (MW) (MW) RISE. TIES (MW) (t1 (wwi (MW) (MW)
, = i It) l I 1979 Sj 5830* 7433 27.5 8 9860 12317 24.9 We 5930 7773 31.1 10070 1180 13497 34.0 1980 6133 7433 21.2 10392 13497 29.9 Sl 6238 i
7773 24.6 ,10614 e 13497 27.2
~l !
1981 S8 6452 720 8153 26.4 l 109 54 1180 1467- 3?.0 Wl 6563 8493 29.4 s11187 1145 15822 I 41.4 1982 58 6788 8153 20.1 ' 11545 15S22 37.0 WI 6904 8493 23.0 l11791 15622 34.2 I 1983 Sl' 7141 720 8873 24.3 12169 1145-69 16698 38.9 W! 7263 9213 26.8 !' 12428 16898 36.0 l l 1984 Si 7512 R873 18.1 8 12826 -22', 16670 Wl 7641 30.C 9213 20.6 !13099 16670 27.3 l l 1985 Si 7902 900 9773 23.7 -261 Wl 8038 l1351 16409 21.4 10113 25.8 s1380t 1280 17689 28.1 1986 Se 8313 720 10493 26.2 -93 WI B456 10833 l 1420 17596 23.5 28.1 . 252 17596 20.9 1987 S8 8746 10493 20.0 1280 18876 Wl 8896 10833 l15018 25.7 21.8 e15337 18876 23.1 1988 Si 9200 900 11393 23.B Wl 9356 l15829 18876 19.2 41733 25.4 e 16166 500 19376 19.9
; . l 1989 Sj 9679 11393 17 7 l 1668 3 1280 20656 23.8 W 9845 900 12633 28.3 i17039 20656 l
21.2 1990 58 12293 20.7 1280 ' We'10182 10357 l 17584 21936 24.7 12633 22.0 #17959 21936 22.1 I ! 1991 5i10712 900 13193 23.2 18534 500 22436 Wl10895 21.1 13533 24.2 l18929 s 22436 18.5 1992 3:11269 720 13913 23.5 19535 1280 23716 Wlll462 21.4 14253 24.4 !'19951 23716 18.9 5.2% 5.4% Per Per Year Year
~
Legend: Su. sne r S Winter W
26 Duke's plants scheduled for 1985 and beyond are delayed in the plan by six months to one year, but its earlier plants remain on schedule for economic reasons. However, CPGL's complete schsdule is delayed. With regard to CPGL, the commission feels that the company has not provided satisfactory evidence concerning the economics of its construction schedule. The commission will require that the utilities and the Public Staff present to the Commi**4 on in its 1979 hearing a full analysis of the present construction schedules and the reasons, if any, that the utilities should not reschedule their construction accoriing to the capacity addi. tion plans adopted herein. The forecasts of expected loads adopted by the Commission are the result of the Commission's consideration of the evidence concerning rates of growth, including rates of reduction in growth due to conservation and load 9anagement, and the commission's subsequent finding of the most probable rates of growth in electric loads. The Commission is concerned about the paucity of concrete data available in this docket concerning actual methods of achieving the expected levels of conse rva tion and load management. Further quantification of these programs is ezpected in the 1979 hearings. In addition, the State Budget Office is making na jor modifications in its planning model and those results should be available in that hearing. The Commission is aware that industry has expanded this year at about twice the rate of last year. The commission vinhes to see more
27 detailed projections of industrial u sa ge. The Commissi on has the responsibility to ensure that the continued economic growth of the state is not impaired by a lack of adequa te utility se rvices. For these reasons, the Cosaission holds open the time to require t he utilities to dela y their construction schedules pending examination of this matter in detail in the l979 hearing. If the capacity plan is completed as herein shown and the reduction in annual load growth achieved, both CPGL and Duke vill meet the 20% reserve requirement which this commission concludes is necessary for reliable system operation. It is im perative that generating unit construction be so planned as to be economically deferable in the event that'even more significa nt reductions in load growth can be effected. In the early years of the adopted capacity addition plan, both companies are expected to have reserve capacities which are above the levels uhich the Commission fin ds are reasonable and necessary for operational purposes only. A fter examination of Duke's evidence and the Public Staff's supporting c omments concerning the costs of delaying
~
construction of the units which are near comple tion (inc17 ding the increased inflation costs) and the benefits which can be gained from completing the units on schedule (including the reduced overall fuel costs) the Conaission concludes that it will be advan tageous to bring Duke's early units on line as pla'ned. Even though this will result in
28 high reserves un til the mid-l980's, the result will be less total cost to the consumer than if the units are delayed. In other, less inflationary times, this decision vould not be valid. The commission concludes, however, that the later units should be delayed an d rescheduled in accordance with the reserve requirements which the commission finds necessary. Due to the large siz es of units presently planned for the later pars, occasionally there vill be abnormally high reserves for short periods of time. However, the reduced construction costs per kilowatt of installed capacity, reduced operating costs per kilowatt-hour, and reduced environmental impact of the larger units over the long-te rm overshados the short-tera excesses. The commission reiterates that it is absolutely imperative that the construction of the later units be planned so as to be economically deferrable in the event that load management and conservation afforts can significantly reduce the load grow th below present planning levels. The commission will require that the major parties in the 1979 hearings present detailed discussions of the economics of the various construction possibilities for planned units and the steps being taken to ensure mariana flezihility at minimum cost. If it appears that the State's economic forecast is revised upward or that the reduction in peak demands through load a aagement and conservation will not occur as projected, then it is important that this information be
29 provided to the Commission as early as possible and no la ter than the subsequent yearly hearings so that the capacity plans can be revised to meet demand requirements. Governor H un t 's Ad ainistra tion has been e xtremely successful in at tracting high vage industry to North Carolina; whatever capacity plan that is adopted aust be flexible enough to assure adeq uate electric power to potential or expanding industry. This Administration *s emphasis on providing more and better jobs for North Carolinians must not fail for lack of adequate planning for electrical power. Based on the evidence received in this docket and in the load management and conserva tion docket, the commission is of the opinion that the forecasts f or electrical power for CPGL and Duke are as accu ra te as possible under present conditions. The Commission also concludes that its adopted capacity addition plans are reasonable -and will result in adequate and economical electrical power in North Carolina for the future period up through 1992. s . With respect to YEPCO, the Commission concludes that the available evidence is conflicting in many respects. The ~ Public S taff adopted and recommended the same gravth rates for YEPCD that had been determined by an independent cons ultant for the Virginia Corporation Commission. The . rate of peak growth wa s appro ximately 5.8%. VEPCO recommended tha t the prope r rate of growth for planning purposes was approximately S. 45. Neither party presented
30 clear evidence of the underlying factors used to develop these growth rates. The Public Staff presented a capacity addition plan for VEPCO ukich would provide reserves at the time of the sunser paak fron l4.85 to I 8. 55 abo we the Public Staff forecast. This was generally consistent with its stated design objective of l55 to 205 reserves. YZPCO presented a capacity addition plan uhich would provide reserves at the time of the summer peak which escillate between 19 15 and
- 7. l %. This plan does not appear to be consistent with m design objective. The capacity plans of YZPCD and the Public 5taff are shoun in Table ]. The resulting toserve requirements are shown in Tables 2 and 3.
In Docket No .- E-22, Sub 224, YYPCO President Ragone indicated TEPCO's concern that it would not be able to build enou gh plants to satisf y the load. Tables 2 and 3 also show that, if YZPCO builds according to its plan and the load continues to grow at rat es equal to the Public Staff forecast, VEPCD's reseries will f all to the 5.6% level. On the other hand, if the lower TYPCO forecast occurs and the higher Public Staff capacity plan is set, the reserves over summer peak load will not rise above the 22.4% level. The f orner clearly violates reasonable construction planning policy and the latter is a reasonable reserve level. The foregoing consents speak to the probable inadequacy of the capacity of YEPCO's planned construction schedule.
31 Another major question of equal importance concerns the relative efficie ncy and ove rall opera ting cos ts of the planned con s truction. The Public Staff recommends use of nuclear units to provide base load capacity. VEPCO wi tness K eesecker testified in this d ocke t that VEPCO st udies indicated that nuclear generation was less costly than fossil base load gene ra tion. In Docke t No. E-22, Sub 224, VEPCO witness Profitt concurred in this conclusio.. Yet, the Comaission is faced with the decisions by VEPCO to canc el Surry U nit N o. 3 and Surry Unit No. 4 an d replace this necessary nuclear generation with fossil generation. This does not appear to be in the best interest of the ratepa yers of North Carolina. r
! The Commission concludes that YEPco is planning neither adequate nor efficient electrical genera ting facili ties.
The Commission f urther concludes that YEPCO and the Public Staff present in the 1979 bearing a complete analysis of e xpected loa ds and required generation for VEPCO through 1993. The Commission concludes that it is reasonable to expect that the planned reduction in annual growth rates for Duke and CPSL will be set This will require that significa nt changes occur in the levels of usage and the time of that usage. The Consission now has underway extensi ve exp eriaents in ti me-of-da y pricing and load management techin ques. The Commission vill intensify its efforts to
32 promote conservation and load management and encourages the utilities to increase their efforts accordingly. As part of its conservation programs, the commission vill go forward with additional e xamination of the effects of load reduction which it can enesurage through its own actions and those which may be enco uraged by actions of other bodies such as the utilities, the North Carolina Energy Division, the sorth Carolina Building code council, the schools, the Federal Governme nt, and others. It is imperative that policy makers and electricity consumers understand options open to them and the effects of their actions on the costs of delivering electricity. The 1979 hearings will consider studies now underway to further refine the commission's forecasts, to define the impact of changes in weather on electricity demand, to improve plant reliability, and to quantify the effects upon load and load factor of increased use of solar assistance and other alternative energy sources. The commission delayed publication of this year's report in order to examine the evidence obtained in its conservation and load ma nagement hearings is Docket Ec. 5-l00, Sub 78. There is abundant evidence on the possibilities of wind energy, biomass conversion, interruptible rates, radio controlled water heaters, peak-load pricing, and other tools to help lower future electricity demand. However, there is little evidence on predictions of the magnitude of help the
33 Commission can expect and of how soon that help can reach significant proportions. These are matters which must be considered ca refully in the 1979 hearing. Especially needed is better evidence on the need for generating plan ts near the end of the planning period. The 1979 hearings are being delayed to mid-year in order to give the Public Staff and othe r parties time to adequately develop reliable forecasting information on these satters. p k o [ e
34 CHAPTER III FO RECIST OF NATION AL AND ST ATE ECONOMIC AND DZ30 GRAPHIC GROETH A. Introduction Electricity is an essen tial inp ut to the production of g oods and services by factories, institutions, and commercial establishments. It is also used in the home to provide services and ente rtain ment. The demand for electricity is similar to the demand for other resources and depends upon its price and the cost, availability, and efficiency of the equipment ahich utilizes it. The demand also depends upon costs asso ciated with the alterna tives to electricity. Most importan t is the level of demand for the service which electricity can rendec. Further, bo th the level of deman d for the service and the costs a nd availabilities of electricity and its alternatives are influenced by the level of economic activity. The Public Staff Report presented the results of the November 1977 forecast of econcadc conditions in North Carolina, which was completed by economists in the Office of State Budget and Management of the North Carolina Department of Administration. This forecast for the 14-year period I 977-l 990 utilized an econometric model of the State's economy. This model was developed by Budget Office econoeists in conjunction with consultants from Da ta
35 Besources, Inc., a national consulting firm in Lexington, Massachusetts. A f orecast of the national economy to 1990, which had been made by Dat a Resources in the f all of 1977, served as the foundation of the North Carolina economic forecast. The Public Staff Report on the forecast is in three parts. The first sets forth a description of the national forecast to establish the basic assumptions of the State forecast. The second part discuss es the historical rela tionship between economic growth in the United States and economic growth in North Carolina. The third part presents a summary of the lon g-term forecast for sorth Carolina. As will be explained in more detail belo w, a decision was made to constrain t he econome tric model results in the last five years of the forecast to reflect an anticipated dampening of the growth ra tes of income and employment. Thus, strictly speaking, the State economic model was followed only until 1985. The national forecast from Data Resources was accepted as give o throughout the en tire period 1977-( s90. The results of these forecasts are significant because the ~ level of national and state economic activity will grea tly affect t he future growth in the use of electricity in this state. The Commission presents below a shortened version of the Public S taf f Report.
36
- 3. The National Forecast Real growth in the gross national product (GNP) is expected to occur at a faster rate in the period 1977-1935 than in the period 1985-1990. In the 1977-1985 period, the average annual rate of growth in real GNP is expected to be 4%; in the 1985-1990 period, that rate of growth is expected to average abcut 3%. The difference reflects the expectation that underlying conditions will be different in the two periods. The forecast assumes that the current levels of plant capacity and unemployn:ent are not at full utilization. The slack in the economy is assumed to be gradually absorbed so that, by 1956, the economy will operate at full employment of both capital and labor and will continue to operate at that leve1 to the end of the forecast period. As increased production absorbs the excess industrial capacity in the .early period 1977-1985, real growth will be higher than long-term trend levels. In addition, the labor force growth rate and the capital s~ack growth rate will slow down over the forecast period and, consequently, the long-te==t growth rate will decline. The increasing participation of women in the labor force only partly offsets the decline in the labor force growth rate.
The severity of the 1974-1975 recession and the increased uncertainty about business conditions have slowed the growth rate of investment since 1975 and is expected to continue a dampen investment plans. The rate of increase of the
37 productive capital stock is also expected to slow down in the mid-1980's. Worldwide excess capacity in some industries, such as the steel indus try, is expected to continue to dampen new investment in the foreseeable future. In addition, Data Resources predicted that the decline in spending on research and development in the United S tates will take its toll on future investment. Finally, increased r expenditure requirements in the area of pollution abatement are expected to absorb funds that earlier would have gone into investments to expand productive capacity. Prices are forecast to increase at fairly high rates throughout the period, but the forecast shows a pattern of declining rates of increase. From an inflation rate of around 65 as of February 1978, the forecast shows a fairly continuous decline in inflation rates to 1990, at which time the rate of growth of the Consumer Price Index (CPI) is expected to be in the neighborhood of 4%. The persistence of inflation in the forecast is predica ted on several assumptions, as follows: (a) Energy prices will coatinue to increase ahead of the ~ general price level,'sveraging 13.C% through 1980, and then will moderate toward the rate of increase for the general price level, but will never get below a 65 annual rate; (b) Energy prices will contribute at least an additional percentage point to the inflation rate throughout the forecast; and
38 (c) Wage settlements will continue to be in the range of 7 1/2:: to 9 1/2%. Rea.' per capita income growth rates follow the same pattern as real income in the forecast, increasing faster between 1977 and the early 1980's than in the mid-1980's and late-1980's. Through 1982 the expected growth rate in real per capita income ranges from 3.3% to 4.2%, with the exception of the projected slowdown in 1979 when it bottoms at 1.7%. F cm 1983 to 1990 the expected growth rate in real per capita income ranges frcm 2.4% to 2.9%. As e::plained above, this pattern reflects the gradual elimination of the excess capacity in capital and labor. The rate of growth of total national nonagricultural employment is expected to stay above its long-term trend rate through 1982 and then is expected to taper off and settle into a lower long-term growth trend than that which actually occurred in the 1960's and 1970's. Manufaccuring employment should grow at a slower rate than total nonagricultural employment, continuing a trend which dates back to the 1950 's . Growth rates in employment are expected to drop from around a 3% annual rate in the early forecast period through 1981 to a 1.7% rate throughout the rest of the forecast period. Within manufacturing, employment growth in the durable goods industries is projected to continue as in the 1960's and early 1970's to be roughly twice as great as in the nondurable goods industries. Growth in nonmanufacturing employment is forecast to be
39 grester than growth in manufacturing employment, but the
, difference is not expected to be as great as it has been in the last 15 years.
Past trend.s in the composition of industrial expansion are continued in the forecast wi th a few exceptions. In dus trial production is forecast to grow at an annual average rate of 5.3% through 1985. The changing age structure of the popula tion is fo recast to boost the rate of household formation in the 1980's, and this trend is strengthened by the trend towa rd single individuals establishing separate households. The increasing affluence of these middle-aged
~
households is forecast to result in strong demands for housing, travel, recreation, med ical services, home
- furnis hings, and nona u tomotive durables throughout the 1980's. The only significant break with past trends is that th e automobile industry is not forecast to grew as strongly as it has in the recent past.
C. Historical Comparisons Between the Economies of the United States and North Carolina An exa mina tion of the 16 years from 196l to 1976 gives some perspective on the relationship between growth in the ~ national economy and growth in the North Carolina economy. The economy of North Carolina has been growing more rapidly than the national economy. Annual population growth has been marginally higher in North Carolina than in the nation, ha ving averaged 1.l4% in North Carolina as compared with
40
- 1. I i 5 for the nation. !!overer, total annual nonagricultural em ploy ment growth in the (96(-1976 period has averaged a f ull percentage point higher in llorth Carolina than in the na tion: 3.45 compared to 2.45. The movement away from a gricultural employment occurred later in North Carolina than in the United States. This fact, together with the rapid growth in the labor force in North Carolina, especially among women, ac=ounts for the difference between popula tion growth and employment growth in North Carolina and in the nation as a wholm.
The labor force for manufacturing in Barth Carolina has gr own at triple the rate of that in the United States, 2.65 av erag e ananal growth compared to 0.85. In the monaanufacturing categories of e xployment, North Carolina averaged a 1 % higher growth rate than did the United States: 4% compared to 3%. Thus, Barth Carolina has become increasingly more depende at on manufacturing in 'the last 16 years and the United States has become less so. Within the manufacturing sector, growth in nondurable goods employment increased three times faster in North Carolina than in the United Sta tes: 3.05 coupared to I.I5. Annual growth in noedurable goods employment in North Carolina outpaced the United States: 2. 4% compared to 0.55. The rapid growth of manufacturing employment in North Carolina can be attributed to a t least four factors. First, the shift from fara employment, which gained somentua
41 throughout the 1950's, created a large pool of po ten tial manu f a cturing e mployees. This movement was reinforced by the relatively lov employment in the rural areas of the State. Second, the investment in roads in North Carolina in the late 1950's and early 1960's opened up the rural areas for industrial de velop men t, cr eating an abundance of relatively inexpensive open space for new plant locations. Third, the traditional industries in North Carolina, lumber and wood, f urniture, and te xtil es, creat ed a videly dispersed ne twork of viable small towns which have served as nuclei for new industrial development throughout the S ta te. Finally, the central loca tion of Ecrth Carolina between the grea t northeastern markets a nd the surging southern markets has made it an at tractiv e location for manufacturers of consumer goods. Th e rapid growth in employment opportunities in North Ca rolina, the increasing labor force participation ra tes, and the growth of higher wage, consumer goods industries _ have all combined to produce a higher rate of growth in per capita personal i ncome in North Carolina than that in the na ti on. In real terms, per capita income grew at an average annual rate of 4.0% in North Carolina between 1961 and 1976, whereas the same measure averaged a 2.9% rate of gro wth in the United S tates. Comparative data on housing starts, car sa les, bank deposits, a nd re tail sales all confirm that growth in North Carolina has proceeded at a faster pace than in the nation.
42 is rapidly as economic activity in North Carolina has been growing relative to activity in the nation, the state's level of economic welfare remains significantly below the national level. In 1976 per capita income in North Carolina was 85% of the comparable national figure; in l960 it was 7l%. The same kind of relationship between North Carolina and the nation can be observed in other areas from housing starts per person to expenditures per pupil in education. Therefora, even if one takes the conservative position that growth in the North C.arolina economy has proceeded more rapidly than growth in the national economy solely because it is a catchin g up" with national levels of economic welfare, the fact that there is still considerable difference implies that growth rates in economic variables for North Carolina vill continue to be higher than those for the na tion. D. & Lone-Ters Forecast M jlgI,th Carolina The long-term forecast for North Carolina was divided into tvo time periods. The farocamt of the econometric mode 1 vas accepted by the Public Staff as given through 1985. However, in order to reflect the decele ration of the catching up process, lower growth rates than those obte.ined from the model were imposed on economic variables in the period 1985-1990. Q uite clearly, there is an element of catching up in the recent North Cr.rolina development experience. Growth has been especially rapid in the areas
43 of durable ma nuf act ures, e xcluding furniture ; in the mondurable areas of chemicals and rubber; and in the nomaanufacturing areas of finance, insurance, real estate, state and local governments, services, and trade. For some manuf acturing industries, initial levels of em ploy men t in the early 1960's were so very small that modest absolute increases in employment in these categories produced ve ry f high, and probably unsustainable, annual percentage rates of grow th . The model equations in these areas picked up the se high ra tes of g rowth and projected them into the future. However, there vill almost certainly be a slowing in these 1 rates of growth in the future as the proportion of employment in these industries in sorth csrolina reaches a balance with the market opportunities in North Carolina and 4 adjacent areas. A simila r argument applies in the nonaanufacturing areas. It was a matter of inf ormed judgment to determine at wha t point in the forecast to override the model results, and a decision was made to make that point the year 1985. The Pub lic S taff Report of the Budget Office forecast .. indica tes that population in North Carolina is expected to increase at a 1.2% ann ual average rate throughout the f orecast period. This compares with the Data Resources forecast of 0.9% annual growth in population for the na tion. The forecast for employmen t growth to 1985 indica tes that past trends will be accelerating. Total nonagricultural
44 employment is forecast to increase at an annoal average rate o f 4. l % from 1977 to 1995. Continued decline in the unemployment rate, furthec shrinka ge in the agricultural sector, and some increases in labor force participa tion rates enable total nona gricultural labor force growth to outpace population growth. Within the nonagrienitural employment category, maanfacturing employment is forecast to grow at an annual average rate of 3.6%, and nonmanufacturing employment is fo recast to gram at a 4.3% average annua.1 rate. Thus, North Carolina is being forecast to follow the national trend toward boccaing a acre service-oriented economy. Within the manufacturing employment category, durable goods industries are forecast to increase their employment at twice the growth rate of the nond".rable goods indust ries- durable goods employment is forecast to grow at an average annual rate of 5.65 and nondurable goods at an average annual rate of 2.7%. Thus, the "burdent al' groeth is placed on the never industries in North Carolina, e. g. , electric al machinery, stone, clay, glass, fabricated metals, instru ments, and nonelect=ic machinery. These industries are forecast to grow quickly at the national level, and North Carolina should continne to increase its share of e m ploy ment in these industries because of its continuing locatianal a4vantageu. Real per capita income is forecast to groy at an average annual rate of 3.8% from 1977 to l985. The comparable forecast for the United States is .3.3%. From 1985 to 1990
45 the ra te of g ro wth of real per capita income for North Carolina is forecast to be an a verage annual rate of 3 1 %, whereas the national forecast is for an average annual rate of 2.7%. Total real personal income is forecast to grow at an annual rate of 5.0% through 1985 and at an annual rate of 4.3% during the 1985-1990 pe rio d. The same forces operating . at the national level will tend to slow North Carolina's growth in the mid- 198 0 's and la te- 198 0 's. Real retail sales are expected to grow at an annual average rate of 4.7% to 1985 and at an annu al average rate of 4 1% from 1985 to 1990. E. Conclusion In summary, the forecast for North Carolina over the period 1976 to 1990, as set forth in the Public Staff Re po rt , is that the grow th trends established in the period 1960 to 1976 will continue but not at the same le vels. North Carolina vill continue tc grow more rapidly than the nation but the dif ferences in growth rates will diminish. As the levels of economic welfare in North Carolina approach national levels, s ome mode ra ting in the State's growth rate is expected. The national forecast of strong growth in industries which are not raw mate rial orie n ted , such as nonantomotive consumer durables, plastics, and electronics, bodes well f or North Carolina. These industries have located in North Carolina in the past to take advantage of the availability
46 of labor, open land, transportation, and access to growing markets and will continue to locate in N crth Carolina in the future. These ind astries vill raise average wage rates in the state and feed the expansion of the nonmanufacturing industries, such as: services, trade, finance, insurance, real estate, and construction. All of these forces point to a continuation of past trends into the future. Table 4 summarizes those Ea rts of the Budget office's economic forecast which were used in the Public Staff forecast.
47 CHAPTER IV LONG-T ERB ELECTRIC ENERGY AND PEAK-LOAD FORECAST
- 1. Introduction The Public staff of the North Carolina U tilities commission presented the most complete and detailed set of studies on the long-term forecast of electric energy sales and the growth in peak loa d in North Carolina. The Commission 's own forecasts are derived from the forecasts made by the Public Staf f. Bajor emphasis was placed on the
" base case" with significan t downward adjustment to ceflect the Commission's consideration of the effects of the " load ma na ge ment" and "conservationa scenarios. This chapter examin es the studies of the Public Staff, Duke Po wer Compan y, Carolina Power G Light company, Virginia Electric and Power Company, and the va rious in tervenors and .public witnesses whose testimony influenced the Commission's u
decisions. Bajor considerations leading to the Commission's conclu sion that the " base case" forecast would not occur and leading to the C ommission's ul timate reduced load growth
-_ e xpectations are co nt ained in Chapter YI, " Outlook f or Conservation and Load Bana gement; A Survey of Alternative Energy Sources."
B. The Use of Econometric Analysis _ The basis of econometric forecastin g is the formulation of historical models of electricity consumption. Within these
48 econometric models, the demand for electricity is rela ted to a set of relevant demographic and economic factors, such as: popula tion , inco me, employment, industrial activity, electricity prices, prices of alternate fuels, a nd temperature. With the use of historical data, statistical relationships can be developed between electrici ty consnaption and these social and economic factors. Given reasonable projections of the expected growth in population, income,. employment, and the like, the estimated historical relationships can be used to forecast the fu ture level of alectricity consumption. The reliability of the forecast is dependent on the fallowing: 1 The adeguacy of the econenetric model in explaining the historical rate of growth in electricity consumption;
- 2. The accuracy of the projections of economic and demographie growth; and
- 3. The degree of homogeneity between the historical period and the forecast period.
The Public 5 taff presented separate eco nonetric energy (KBH) models for the residential, commercial, and industrial customer classes. Summaries of the long-tern Public Staff TH EN D forecast for CPGL and Duke are provided in Tables 5 and 6. The TREND forecasts revealed an expected rnte of growth in energy sales of approzisately 6 3/4% for both companies. Peah demand projections were developed by
49 applying average customer class load f actors to the forecast ene rgy requirements. As pointed out by the Public S taf f, the TREND forecast must be consi dered an optimistic projection of energy sales in view of the assumptions upon which the forecast was based. These assumptions include the following: 1 Strong economic growth in North Carolina and South Carolina in the 1976-1990 period as evidenced by ra tes of growth for such indicators as:
- n. c. S. C.
Real personal income 4.8% 5.0% Real retail sales 4.5% 4.7% sanufacturing employment 3.2% 3.5%
- 2. Electricity prices rising slightly above the general level of prices Crable 7) ;
- 3. Het substitution of electricity for alternate f uels;
- 4. No dramatic change in energ y-related technology;
- 5. A continua tion of the present form of rate design; and
- 6. No direct conside ra tion for possible ener gy a nd pe ak-loa d reduc tions due to c on se rr- tion programs and policies, system load management, and peak-load pricing.
The Pu blic S taff base case forecast was gene rally consistent with the 28th A nnugl Electrical Industrv Porecast (Elect rical World, September 15, 1977), which is based on
50 similar assumptions. The 1978 Electri_ cal World forecast is lower than the 1977 forecast: the average annual rate of growth in peah inad for the nation is now forecast to be only 5.0% until 1985, then dropping to 4.6% by 1995. In each of the energy sales sectors, the tyc North Carolina companies have historically grown more rapidly than the industry as a whole. This relationship should certainly continue for the 1976-1990 pe riod , given the probable outlook f or economic growth in the Caroli tas. The three najor electric utilities presented their forecasts of growth in electricity sales. CP&L, whose es tima tes of future electrical load were based on estimates of customer energy requirements, forecast an average compound growth rate in energy sales of approximately 5.7% through 1987, dropping to 5.4% through 1997 CPGL's f orecast of energy sales through 1997 is set out in Table 8. Duke's forecast of future peak loads and sales included several na jor assumptions. First, Duke assnaed that its service area vill continue to grow, especially since the governments of North and south Carolina are encouraging industrial growth. However, as Duke witnesses pointed out, the econcay of D uka's service area vill grow at a acre moderate rate compared with the fast pace of the 1960's and early 1970's; customers will contribute to the lower growth by continuing their conse rva tion efforts and by adopting Duke 's suggestious for load napagesent programs. Second,
51 Duke's fo recast assumed that there will not be an extraordinary conversion f rom fossil fuels to electricity. Duke made sales projections for a number of different classes of customers and utilized more than one methon for each group whenever possible. The methods involved projecting the usage per custcaer and the nunber of customers, rela tion ships between sales and economic variables, and historical growth patterns. The projec tions were first made including the ef fect of load management that has already occurred. Ad j ust me nts to the sales forecast were then made for the effects on sales of additional load ma na ge ment. The sum of D uke 's sales pr .*jections by customer classes yields the forecast of company regular sales that are set forth in Table 9. , TEPCO's current energy forecast for the years 1977-1987 is sh own on Table 10. The compound annual kilowatt-hour growth rate for this pe riod is 6.61. Little explanation of the underlying methodologies was given by the company. C. Forecast of Electricity Sales t2 R esidential C ustomers In its bsse case, the Public Staff forecasted residential sales for CPSL and Du ke, as follows:
Carolina Power p I.icht Company - Besidential Sales t976factua1) 1985 I990 g GHH . ales 6 ,4 91 l 0,7 22 14,024 15,6{4 % Rate of grovth 5. 7% 5. 5% 5.5% Duke Power Connan v - Residential Sale _s f 976 (actual) I985 t990 1992 GHH Sales i1,327 18,237 23,776 26,438 % Rate of growth 5.45 5.55 5.5% The analytical ap proach used by the Public Staff to forecast the demand for electricity by residential customers eas. .to estimate econone tric models of residential electricity demand using multiple regression analysis. The residential forecast , was based on the assumption that the residential demand for electricity is. basically a function of se veral economic variables, including the number of residential customers, % real price of electricity , and the amount of real income available to residential customers. The Public S taff use d multiple reg'ession r models which describe the determinants of residential elechricity demand to derire estimates of the isclated effects that changes in particular variables have on the residential demand for ele ctricity. Long-run elasticities of these variables (e.g. , the real average price of electricity,. real. personal income , and seasonally adjusted real retail sales) were used with the forecast growth rates of the variables to obtain
53 g row th rates in residential electricity sales for different tiso periods. The se estimated growth ra tes were applied to historical values of residential electricity sales to obtain forecasts of the expected le vels of sales of electricity to residential customers. In order to check the reasonableness of the econometric fore ca st, the P ublic S taff investigated several noneconometric forecasts. Basically, these forecasts consisted of perforning linear and e xponential trends on historical data, su:h as: the number of customers, actual energy sales, actual peak load, historical average use per customer, and a ppliance sa tura tion. Table ll shows the 4 re sults of the Public Staff residential noneconome tric energy forecasts. These results support the results of the econometric forecasts. Carolina Power E Licht Compa ny To f orecast residential energy usage, CPCL first estimated the total number of customers tha t would be on its system in the future. Since the total nuater of residential customers on CPSL's system correlated closely with the total number of housing and mobile home units in the na tion , CPSL used projections of the future totr i national number of housing and mobile hore units to rotecast the total system number of future residential customers.
54 within the reside ntial sector, CPSL's largest number of customers is in the class which uses electric water hea ters but does not use electric hea t. In order to deternine the relative proportions of each type of residential customer, OPSL correla ted the historical rate of growth of " water heated onlya residential customers to the total number of housing units and mobile homes. Using projections for the total number of housing units and mobile homes for future years, and assuming that the rate of growth of this class customer would follow historical pa2 tarns, CPCL was able to forecast the total number of residential customers with electric water heaters but without electric heat. It was assumed that a large portion of those residential customers presently using natural gas would continue to have it available, even with the curtailment of natural gas. These customers re prese nt a large preportion of minimum use electric custome rs. The ref ore , the total number of customers in this class was assumed to decline only slight ly. (5 absequent even ts ha ve shown that prediction to be a good one. The natural gas utilities ha ve enough gas available now, due to decreased curtallments, to actively pursue new residential customers.) By subtractin g the customers in these two classes from the total expected number of reside ntial c ustomars, CPCL arrived at the forecast for the number of customers with electric heat. As a result of these assumptions, CPGL now expects a saturation of electric heating customers of 385 by 1997. This is an
55 in crea se over the 23% sa t ura tion of electric heating customers in 1976. In order to estimate the average use per cust omer for the residential sec tor, CPCL used histocical data to determine the effects of w ea th er, growth in the residential class, price, abnormal usa ge d uring December (due to the holiday se as on) , and c on se rva tio n. In order to project future usage, CPGL assumed that normal weather would occur and assumed also that a real increase in the price of electricity (over the inflation rate) of l% per year would occur. u P ower Compa ny Euh Duke's residential sales f orecast was based on projections of two parameters: customers and kilowa tt- hours per customer. The customer forecast was based on the historical relationship between Duke's total residential customers and he popula tion of its service area. Duke used the popula tion estimates by the Bureau of Economic Analysis, United States Department of Commerce, to compute the number of customers. This estima te of total residential customers was then disaggregated to the individual residential ra te schedules. Proj ections of kilowat t-h ours per residential customer were developed by using multiple regression techniques to analyze monthly usages by ra te schedule and to estimate 1977
56 temperature-corrected sales. Projections for usage per customer were dev eloped by contining elasticities from econometric models vith grovth ra tes for the- applicable independent variables. Th e resulting projection of usage per customer multiplied by the number of customers yielded es tima tes for future KWH sales. The projections of usage per customer for each residential rate schedule were verified rf independent projections made by Duke's marketing department. D. The Forecast of Electricity Sales M Comme cial Customers The commercial energy sector encompasses a wide variety of customers and uses of electricity. The commercial classification is a he terogeneous six of wholesale and retail trade operations, service activities, a nd govern mental units. sany of the commercial uses of electricity are similar to residential uses, such as indoor ligh ting, refrigeration, cooking, air conditioning, and space heating. There are also specialized commercial uses of electricity, such as outdoor lighting displays and business nachinery. The 1964-1973 period was characterired by a rapid growth in the commercial consumption of electricity. As pointed out in the Public Staff Report, Duke and CPGL experienced an approrisata 12% annual gro wth rata in commercial sales during the 1964-l973 period. The combined effect of economic recession, rising real electricity prices, and
57 voluntary conse rva tion caused a da mpening of the annual g rowth rate in com mercial energy consumption down to approzinately 3% for both companies during 1973-1976. As a degree of stability was brou ght to the national economy and to the energy markets, sales to commercial customers achieved a modest growth rate of 5 l/21 to 6% during 1975-1976. The econometric forecast analysis of the Public Staff results in an estimated ra te of growth in commercial KWH sales for CPSL and Duke of approximately 6.5% for the 1976-1992 period. The forecast of commercial GWB sales for CPSL and Duke for selected years is set forth as follows: Carolina Power & Licht company - Commercial Sales 1976 1985 1990 1992 GBH Sales 4,016 7,018 9,662 l0,979
% Growth rate 6.4% 6.6% 6.6%
Duke Po wer Com pan y - Commercial Sales 1976 1985 1990 g GWH Sales 7,987 13,959 19,2l4 2l,834
% Growth rate 6. 4 % 6.6% 6.6%
As discussed in de tail in the Public Staff Beport, the commercial econ ome tric models used the following as dependent variables: the real average price of electricity, the real retail sales, the real price of #2 fuel oil, and a weather variable. Alter na tive model specifica tions were
58 estima ted using a data set for each company consisting of monthly observations over the period 1965 to 1976. The statis tical method of multiple re gression was used to separa te the effects of each of the variables which determine commer=ial KW deman d. Time lags were included in the models to e stima te the dynamic response of commercial customers to changes in the price of electricity, the level of re tail sales, and the price of fuel oil. An estimated rate of growth in commercial sales was generated by applying long-run elasticities to assumed growth rates in the model variables. The econometric analysis for CPSL and Duke results in an estimated rate of growth in commercial KEH sales of approzinately 6.5% for the period I976-1992. Alt hau gh this growth ::,te is above the expected future rate of growth in consercial sales for the United States, a -6. 5% grow th rate is well below the historical commercial growth ra tes of 9.8% and 10.I % over the period 1964 to 1976 for CPGL and Duke, respectively. As in the case of residential energy sales, the Public staff performed a noneconometric investigation of commercial sales to - check the reasonableness of the econcas tric fo recast. The initial analysis was to forecast energy sales wi th siaple linear and exponential trends of the available historical data. The exponential trend shown in Table 12 appears to increase dramatically after 1982 and was considered to be an upper bound estiaata. The second type of analy sis was to trend, linearly and exponentially, the
59 historical avera ge use per c ustome r and multiply these trends by the linear trend cf commercial customers. As show n in Table 12 this type of analysis resul ted in forecasts which lie between the af orementioned historical sales trends. Table 12 aJso includes an a vera ge of all commercial e ne rgy estima te s e i the average of the most likely estima tes. Carolina Poweg G Licht Co r ea ny In order to estimate commercial customers, CPGL developed a trend which tied the growth in commercial customers to reside ntial customers. This assumed that the two growth ra tes would stay reasonably close in the future. As in the case of its residential cust omers, CPGL estima ted the average use per ccamercial customer by using historical data to determine the eff ects of wea ther, growth in the customer class, price, abnormal usa ge d uring December, a nd c on se rva tion. In order to project future usage, the occurrences of normal weather and a real increase in the price of electricity of 15 per year were assumed. Duke Power company Duke's commercial customers are served under the company's General Service Schedules (G and GA) . For each schedule, t he kilowatt-hours per customer were analyzed separately to allow adjustment for the effects on usage of changes in ambien t temperature and to calculato estimates for 1977.
60 These usage per customer estimates, together with the number of estimated customers, were used to determine the - tenperature-corrected sales for Sched ules G and GA. Duke then applied declining growth rates from the historical trend to the 1977 estimates of General Service sales in order to calculate the long-range projection. E. Ihg Forecast sf Z_lectricity Sales M Industrial custosuGE The Public S taff's industrial sales forecast was the rasalt of the application of two methodologies. The first was based on multiple regression techniques. The second was bas ed on the histcrical rela ticuship between growth in manufacturing employment and growth in industrial KYS sales. The final forecast uns lased on a combinatio n of the two methodologies. The foreca st rates of annual- growth in - industrial KiB sal'es during the 1976-1985 period are 8.53% for CPGL and 7.59% for Duke. The 1985-1992 forecast annual growth rates are 7.89% for CPSL and 6.98% for Duke. The aain determinan t of the expectad growth in the indastrial use of electricity is the strong rate of growth in manufacturing employments in sorth Carolina and in South C arolina. The Public Staff concluded that the rates of growth in industrial sales for CPSL and Duke did not appear unreasonable in view of the current f orecast for groerth in manufacturing employment in the two states. The Public Staff forecast of ind ustrial.GWH sales for CPGL and Duke for selected years is set forth below:
61 Carolina PoweI E Light Company - Ind ustrial Sales 1976 f a ct u al) 1985 1990 1992 GWR Sales 8,759 18,293 26,738 3l,123 1 Growth rate 8.5% 7.9% 7.9% Ruke Pgver Company - Industrial Sales l 9 73 1985 1990 1992 GER Sales 18,417 35,574 49,858 57,067
% Growth rate 7.6% 7.0% 7.0%
Carolina Power E Licht Com pa ny CPGL's industrial energy forecast was basically a consensus of the estimates of its customers, i. e. , the company's industrial sales manager called upon its large industrial customers to learn their f uture plans. Egle Power Company Duke e s textile sales, which a mo unted to 56% of its industrial energy sales in 1976, were forecast using an econometric m odel. This p rcjectio n was su pported b y t wo other models, one involving the textile production indez and the other using textile mill consumption of fiber. The tertile sales forecast wa s be t wee n the two alter nate proj ec tions. Sales to other industrial customers were projected in two parts: man-made fiber plants, which comprise about 22% of these sales in 1976, and the renaining group. The 1978-1979 projec tions f or man-made fibers were es tima ted by Duke 's m arketing department based on expected
62 KV load and hours use of demand for each customer. The long-range projaction was based on the historical ' rela tionship be tween Duke 8s sales and the national production of man-made fibers. The remainder of the industrial class was projected using a declining growth ra te trend. Duke added to this proj ection the energy associated with a 100 5E industrial plant that Duke expected to start serving in 1981 The forecasts of sales to other classes were based on growth factors from historical trends, except for interdepartmental sales. The la tter sales were projected based upon the experience ,of the manager in charge of the water systems. F. *h Peak-Loa d Forecast The Public Staff ande its estimates of abase-case a peak demand by utilizing three independent but closely related forecast methods. First, a peak forecast was developed from the forecast of total systen energy production through use of an average (7 years) s ysten load f actor. Second, a peak-load forecast was calculated by using forecasts of future K7H sales for each major customer class in conjunction with average (6-7 years) class coincidental peak-load factors which had been obtained from his torical cost-of-service studies. The third method used a direct econometric es tima tion. The Public 5taff deterzined that the second method, the customer class energy requirement - load factor method, was the most reliable approach to developing a
63 f orecast of peak demand. The econesetric peak-1 cad m odels were used only as checks on the validity of the results of the load-f a ctor estimates, due to statistical problems inherent in the econome tric models. The strong point of the customer class approach is that it provides a direct linkage between the customer class energy forecast and the systen peak-load forecast. The customer class approach recognizes changes in the air in energy sale s by class of service and directly reflects them in the pea k-load es timates through the coincident peak customer class load factors. The peak demand estimates f or CPSL and Duke resulting from this a nalysis are shown below: Carolina Power j Licht Company - Peak Deman d 1976factuall 1985 1990 1992 Peak Demand (59) 5,121 9,375 12,777 l4,486 , i Rate of Growth 6.9% 6.4% 6.5% Duke Power Company - Peak Demand 1976factuall 1985 1990 1992 Peak Demand (5W) 8,60l 15,385 21,209 24,127
% Rate of Growth 6.7% 6.6% 6.7%
Using the long-tern TRE ND forecast as a bench mark, the Public Staff developed three alternative peak-loa d projec tions which a ttem pt to quantify the possible growth effects of such measures as new conservation progra ms a nd load management. These alternative scenarios reflect
64 reasonable upper limits of the impact of conservation and/or load mana gement on capaci ty e xpansion planning. These - scenarios are: I. Coaservation - a 15% reduction in estimated system energy sales by 1992 with a constant load fuctor;
- 2. Load management -
a los increase in system load factor (not exceeding a load facter of 755) by 1992; and
- 3. combination Load Banagement and conservation - a 155 systen energy sales reduction and a 10%- increase in load factor by 1992..
New construction schedules sere designed for each of these alternatives and new estimates of the price of electricity under each scenario were made. .s a fourth scenario was studied to determine the effect on the price of electricity of the overbuilding of electric generating facilities. It was assumed that generating facilities would be constructed under the " base cassa capa city erpansion sehedule with load actually growing as shoen under the combined Load Hanagement and conservation scenario. The impact of this occurrence would be to simultaneously raise and lower near tera prices because extra plant would be on line, but these more efficient new plants would have lower fuel costs. Prices of electricity in la ter Pears would be reduced because the plant cost included in the ra te base sould include less inflation. It -
65 was found by the Public S taf f that such "overbuilding" of genera ting facilities would not dramatically in crease the price of electricity during the study period. The study shows that the net effect of the additional plant would be a l % to 2.5% increase over the nominal price of electricity. Carolina Power G Licht Compa ny As pointed out by the company, CPGL's estimate of the f uture electrical load which its customers will place on the system is to a large extent based on estimates of customer energy reguirements. CPGL first estimated total energy requirements for the system. Then, in order to develop the , company's load forecast , CPGL determined coinciden t peak-load factors for each energy classification and combined them into a composite annual systen load factor. The tot al projected systen energy input and the projected annual systen load f actors were then used to forecast the CPGL system pea k load for each year. C PGL's current peak-load forecast is set out in Table 13. Duke Power Company Several assumptions underlying Duke's projection of its sy st em future peak loads have been discussed previously, but it is important to reiterate that Duke's projections of peak load take into accuInt the effects of its load management program and the conservation efforts of its customers.
66 In making its forecast of peak loads, Duke projected separately the summer and the winter peak loads. These s peaks have been growing at different rates due to the degrees of saturn tion of air conditioning and electric heating. The sunser and winter peak loads were separated into two components: tem pera ture-responsive loads and base loads by using regression analysis techniques. The company determined growth factors for both ty', es of loads. Duke's long-range forecast of summer p .cs is shown on Table 14. Its forecast of winter peaks is shown on Table 15. D uke 's peak-load forecasts are lower than the " base case" forecast of the Public Staff and are approximately the same as the Public Staff's conservation scenario. Duke's forecast also showed that the company will remain a summer peaking company , through 1990. _. Vireinia Electric and Power Coeceev YEPCD's current peak-load projections mere based on econometric models, weather models, and historical projection techniques. The compan y used the service of outside coasaltants to provide an independent forecast for a review of the reasonableness of YEPCD's een forecast. As pointed out by the compan y, 7ZPCD is a summer-peaking company and, barring unusual growth in winter load, expects to remain a summer-peaking company for the foreseeable future. TEPCo
- s suaner peak-load forecast for the period I 978-f 987 is shown on Table 2. Growth is expected to remain
67 well below the long-tern historical growth rate and will be af fected by implementation of load management techniques beginning in 1980. The compound annual growth ra te predicted by the company f or the 1977-1987 period is 5.3%. G. Comments hv Public Witnesses and Intervenors The Commission encourages participa tion in its hearings by public witnesses who have concerns about the sa tters under discussico or suggestions for commission consideration. A airture of concerns, critic 3sas, and suggestions for improvement of the forecasting methodologies of the Public Staff and the companies vera offered during the February 1978 hearings. Response to ccncerns relating to nuclear power safety will be trea ted in another section of this repo rt. A novel approach to f orecastin g, utilizing only residential meters as a predictor f or total sys ten growt h, was presented to the Commission by the Carolina Environmental Study Group (CESG) . It was asserted that electricity consumers will shortly saturate their usage at 9000 watts. After fitting an integral of the ordinate of t he nor mal curve of error (IONCOE) to recent historical data, CESG asserted that Duke would gradually peak at
!!,000 ME in a few yea rs. At tha t time, the growth rate would be zero.
68 Some, but not all, of the data used by CESG was adjusted for weather va ria nce. The da ta was adjusted by a - discretionary income ratio (DIR) between .99 and 1 02 and by a rate factor. This DIR level was criticized because a DIR of 10 implies that the real discre tionary income of North Carolinians would never increase and that all progra ms for upgrading jobs and wages in the Sta te arc a complete failure. Using a DIR of 1 02 implies a 25 annual growth in discretionary income. If the CESG methodology is used as corrected in the hearing by multiplying the claimed saturation point of 9000 watts per customer by the number of custcasts, by the CESG annual customer growth f actor of ].03, and by a DIR of 1 02 the result is a forecast of an eroonential crowth nie, ' af ter saturation, of S.065 per year. If the average DIR value of CESG's 17 years of data is used; namely, 1 02276, the rate of peak growth would increase to 5.344%. For - dema nd to level off at 11,000 EW as claimed by CESG, the number of customers would ha ve to start to decrease in the near future. Using CESG's methodology with realistic assumptions yields a forecast of future loads which is comparable to the companies' forecasts. The apparent delit.erate attempt by CESG to force saturation by choosing the parameters of the IoscoZ curve cannot be judged to be a credible examination of past history or expectations for the future planning period. To ,
69 assume t ha t the per capi ta elec tricity use of Borth Carolina's citizens is saturated would imply that (1) . all prog ra ms to upgrade the standard of living of citizens in this State are not working or (2) conserva tion and load ma na ge ment are practiced so effectively that they completely o ffset the additional ene rgy used to upgrade the standard of living. For conservation and loa d management to be so practiced is an admirable goal and should be pursued, but that does not appear attainable within the planning period of this report. The CESG testimony did, however, present a good explanation of the nhenomena of peak loads occurring at times of extreme coldness or varaness of ambient ground temperature as a result of the differences in radiant energy available in different son ths. This information mLv be of valu e in future st udies attempting to further define the probability of peak-inducing weather conditions. The " load m an agement " scenario of the Pcblic Staff utilized a nazimum improvement in load factor of 10 %. Several public witnesses e xpressed concern that this improvement was too low an expecta tion. However, it was pointed out that daily load factors are already over 80%. Since most of the load management and conservation aids now under practical consideration involve improving the daily load f actor and do not involve trans ferring loads between seasons, it would be cztremely difficult for these aids to improve the annual load factor beyond approzinately 75 %. Even if such improvement could be accomplished, the effect
70 would not be partienlarly helpful because, once load factor exceeds approxima tely 75%, the systaa has insufficient off- s peak time to perform najor maintenance and the system must add new units tu carry the load during maintenance. The expected limit of I 5% on conservation effect during the planning period, which wa: used in the
- conservation" scenario of the Pu blic Staff, appears at this time to be reasonable. Studies by the Tennessee Talley Authority have indica tad that even less conservation may be the practical 11ai t.
71 CHAPTER Y RESERVE CBIT ERI A, GEN EBATION HII, AND CAP ACITY PLANS A. Peserve Criteria The ma gnitude of a sys tem 's generation reserve requirenents depends upon the nature of the system, the characteristics of the loa d , and the quality of service required by the system's customers. Since these factors chan ge over ti me, a reserve which was adequate in the past may be inadeguate in the future. Consequently, the commission reco gnizes the need for periodic review of the genera ting re.wrve requirement. In developing its future capacity plans, the Public Staff made several important investigations prior to its selection of the set of generating facilities it recommends that the electric utilities should construct. The first study involved the selection of acceptable reserve criteria to provide for the day-to-day variations in operating cor'2tions. These variations include main tena nce on genera ting aquipment, partia1 outages due to physical and ambient conditions, unerpected (forced) outages of generating facilities, changes in load pattern, and errors in projected load estimates. It should be noted that an allowance for delays in the commercial operation of new facilities i.s not generally included in a utility's reserve capacity.
72 There are various methods to deteraine reserve requirements. These methods can be broken down in to two 7 broad groups:~ the nonprobah414 %ic (ROPROB) group and the # probabilistic (PROB) grou p. Non probabilistic reserve capacity requirements are generally based on maintaining some minimum level of additional capacity above that required to meet the expected annual or seasonal peak load. The 'nore common NOPROB methods are (!) the standard percent reserve and (2) the loss of the largest unit. The most sidely used probabilistic meserve requirmaant is Loss of Load Probability (LOLP) . It was the conclusion of the Public Staff, based upon its detailed analysis of the historical peak-load conditions for Duke, CPSL, an d YEPCO,. that a reserve criterion of l55 to ' - 205 for both saamer and winter sould provide adeguata and reliable electric service to the citizens of sorth Carolina. The Public Staff also concluded that a loss of load probability not to exceed 15 days per season (based upon seekday peak hour loads) should also be usad in the planning of North Carolina's future capacity requirements. Duke witnesses testified .that a 205 reserve would be the miniana necessary for North Carolina during the present planning period. This is consistent with Federal Energy Regulatory Commission recommendations of 155 to 25%, with f aster growing areas using the higher reserve margins.
73 Since t he rese rve margins have been substantially in excess of these values in recent years and wea ther conditions have still caused difficulties in maintaining service, the commission concludes that a mi niaan of 20% reserves should be maintained until load growths settle down into a more predictable pa ttern. B. Generation 311 Once the gene ral level of reserve requirement is
~
established, the next step in developing future genera ting capacity is to de termine the propor air of the three basic generating capacity types: base, intermediate (cycling) , and pea king. Base units are designed to run most ef ficiently at continuous full load, and generally operate over 60% of the time. Cycling units are generally designed with greater emphasis on lower investment cost an d with lesser emphasis on obtaining anziana operating efficiency. (With the passage of time, less efficient base units are used for cycling operations.) Cycling units do not operate as man y hours a day as base units and say be stopped a nd st arte d more frequently. They operate usually about 25% to 6 0% of the time. Peaking units, which consist mostly of gas turbine and internal combustion engines, are operated only a few hours a day. Theo retically, peaking unit investment costs should be lower and the operation ecsts higher than those of other types of units. However, hydro units, which are used for peaking, have high investment costs in Oaas and
74 reservoirs and yet have relatively low operation costs. T hese units are gene ra11y limited to peaking mode in this area, due to water availability. Pea ting units, depending on the type and systas, can operat e as much as 30% of the time. T he hours of operation for each type of capacity depend upon the costs (capital and energy) of the capacity and the demand. To provide the most economical energy to their co nsumers, electric utilities should determine which generating facilities to operate based upon the relatim energy production cost of each facility. (The capital cost of each unit is ignored for operational purposes after the unit is in service.) The unit with the lowest energy production cost is assigned the first increment of load. As s each additional increment of load is added to the system, the unit with the next lowest energy productica cost is placed into service. This process continues until the on-line generation equals the coincident demand of the consumers. The units wi th the lowest energy production expense would be considered base load units, is new units are added to a system, some base generation facilities may no longer have a relatively lower ene egy production cost. and may become reclassified as intermediate units. Proper six is considered to be the optimal six of generation ca pacities which will satisfy the demand at einimum cost. The optimal six of generation camacities is determined by the utility
75 load curve, which is a graphical display of demand versus time. In arriving at the proper mix of generating capacities, the Public Staff investigated the typical hours of operation for base and peaking ca pacity of the three North Carolina utilities, the standards of operation using a pea k week hourly loa d curve , and hours of operation compared to an annual load duration curve. The Public Staff also assumed that peaking units would operate no more than 1000 hours and th at base units would operate at least 6000 hours. Based upon the above, the Public Staf f concluded that the proper genera ting air for D uke , CPGL, and YEPCO should be approximately one-half base capacity, one-third cycling capaci ty, an d one-sixth peaking capacity. Other witnesses generally supported this mixture , and the commission concurs. Hajor con t ro versy e xists concernin g the use of nuclear versus fossil ge ne ra tion. The debate centers both on economic and saf ety grounds. Ebether nuclear is more cost e ffective than fossil generation depends upon the to tal costs of construction, life time main tenance, and fuel consumed. In addition to its own studies, the Public S taf f presented the re sults of a number of studies of these matters by the Electric Power Re sear ch Institute, the Federal Energy Admi nis tr ation, the Euclear Begulatory Co nsis sion, the Federal Po wer Commission, the Ener gy
76 Research and Development Administration, and others. These studies utili=ed a range of assumptions about future cost - trends. All of the studies projected costs of both nuclear and fossil generation from the present mid- 1980 ' s pla nning period into the twenty-first century. While some studies only calculated initial costs, others calculated the levelized total cost over the useful lives of the plants. The results indica ted that, in the present planning period, nu clear generation is expected to be more economical than fossil generation.
"he average result of the total life studies showed that nuclear generation is expected to be almost six-tenths of a cent (5.86 mi t t a in 1978 dollars) per kilowatt-hour less expensive than fossil generation. These estimates range from a low of 0.264 per kilowatt-hour to a high of 0.90s per kilo va tt-ho ur. A saving- of six-tenths of a cent per kilowa tt-hour, the wt difference in capital costs, maintenance costs, and fuel costs, would be a cost saving of 36.00 per 1000 KYH gen ecated. For systems which are at least one-third nuelear generation, e. g. , the North Carolina utilities, this means a savings of $2.00 per 1000 KEH. The studinq indicate that a consumer who uses an average of I 000 KEH per month is erpected to save from approzinately $10.40 to $36.00 per year. For an electric heat custcaer who averages 2000 KWH per acuth, the savings would be expected to range from $25.00 to 586.40 per year. In 1985 dollars, these savings would be more than double. '
77 The Public Staff analyzed the sensitivity of its studie= by calculating the ef fect which would be produced by (1) doubling the nuc lea r fuel costs and ( 2) by increasin g the nuclear capital costs by 25%. The results of these' studies, as well as those of t he companies, were that nuclear generation demonstrated an e xpected economic advantage over fossil generation for base load additions d uring this planning period. It is emphasized that these results apply to the present planning period. Stu dies f or the generation capacity which will follow those units presently in the planning stage may demonstrat e that other me thod s of prov iding electric gene ration may become preferable in f uture planning periods. Questions were raised concerning the availa bility of nuclear fuel to be crad in scheduled reactors. The evidence indica tes that sufficient quantities of nuclear fuel will be available to be used during the lifetime of plar.ts now being planned. However, when these plants need to be replaced, there is a definite q ues tion of whether there will be sufficient nuclear f uel to be a ble to replace these plants with nuclear generation u nless a reprocessing system is started. Several witnesses at the Co m mission 's February 1978 hearings expressed their concern about the safety a nd reliability of nuclear fueled generation. The issues raised by these witnesses included:
78 1 The problems of storing spent nuclear ' fuel,
- 2. The lack cf firn assurances of uranium supply toward the end of the century,
- 3. The continuing escalation cf costs associated with nuclear plant construction,
- 4. The use of vast amounts of water for cooling in nuclear generation, and
- 5. Threats from terrorist groups against nuclear plants.
Th ere was also testimony, however, that nuclear poser is clean, safe, and availahle. The saf sty of nuclear poser plants can be illustrated by the observation that thcre has been almost 2000 reactoc-years of commercial plant operation worldw ide without a single fatality as a consequence of nuclear-related plant salfunction. There is continually increasing o pinion in the technical community that the hazards to the ge neral public from nuclear plants are considerably less than the hazards from many alternative systems, such as coni. The agreenhouse" effects on our atmosphere causad by carbon dioxide resulting from the combustion of coal and eil na y be a problem of even nors widespread and potential seriousness than the localized problems of nuclear safety. In addition, nuclear units do not have the sulfur tad other emission problems of fossil units. An increasing segment of the technical community is boginning to express the vie w that nuclear plants are
79 perhaps too conservatively designed, i.e., that the ma ny redundant safety systems a te not justified by experience. With respect to radioactive waste disposal, government efforts are underway to identify two high- le vel vaste re posi tory sites for eventual ultimate disposal of reactor vastes. This program envisions the possible transfer of vaste to these re positories during the aid-t o-l a t e- 19 80 's. Discussions of establishing i .teria storage repositories by have been initiat e d by TVA with the Federal 1983 Administration suggesting tha t TVA be funded to develop an interim storage system for the southeastern utilities a t Oak Ridge, Tennessee. It is true that in the past year increasing costs for capital construction, fuel, and safety systems of nuclear plan ts have na rrowed the economic advantage nuclear power holds over coal-fired plants. However, the southea ste rn region of the U nited s ta tes still shows a significant economic advantage for nuclear power over coal. Admittedly, the continually inc rea sing ca pital costs of nu clear facilities present a financing problem for atilities an d are a deterrent to the construction of new f acilities. The calculation of the changes in future electricity prices used by the Public Staff to develop the impacts of the "overbuildinga scenario were challenged. The basis of the challenge was the expectation of annual increases of 8% in nuclear f ue l costs and 6.55 in coal costs. It w as
80 asserted that the present fuel cost difference would lessen and make future nuclear units le:ss economical and, since - nuclear units are the projected units in question, the new units should not be built. However, since nuclear fuel is presently at 4 mills per K115 and coal at [ 4. 8 mills per K1IH, the relative difference would widen, not lessen, within the lifetime of the plants. The Public Staff's calculations are correct. It was contended that large nuclear units are more expensive to build and operate than small coal units. It vas also contended that there would be less financial impact as well as less environmental impact if genera ting units were smaller and decentralized. The table belos shows that, if units are costed out in the same time frame and with 3 comparable environmental treatment requirements, small units are more expensive to construct per kilowatt of capacity than large units. Since. nuclear fuel is so much less expensive than fossil fuels, nuclear units are economical. In addition, approximately the same number of people are required to run a plant on an around-the-clock basis, regardless of the size; doubling the number of plants would double the aanpower requirement. It would also make higher voltage transmission lines less economical and would increase the use of lan d required for transmission and genera tion facilities. Smaller units are less efficient in water use and would be environmental 1T less desirable.
81 Cost Comparison Illustrating Economies of Scale I. Duk e's coal P la nts, with Scrubbers Added, l976 Dollars Capacity ME___ S/KW Allen i 165 374 Allen 5 275 348 Barshall I 350 344 Clif fside 5 54 5 328 Marshall 3 650 283 Belevs Creek l ((40 275 II. Duke's Nuclear Plants, as Built, 1976 Dollars Oconee 1 86 0 230 S cGuire 1 l180 293 The Public Staff Report was criticized because it did not trea t cogeneration as an alt erna tive to separa te power prod uc tion pla nts. This ma tter will be treated in depth in f uture hearings. A study of this matter has been funded by the N orth Carolina Energy Research Institute and the United States Department of Energy. Besults of that study may be available for the Commission's 1979 hearings. Questions were also raised by intervenors concerning the viability of using tower cooling versus lake cooling, with specific reference to t he possibility of moving D uke's proposed Perkins nuclear plant to Lake Norman. Perkins and its sister units h ave been designed to use cooling towers as a result of an EPA mandate in past years. By designing a nd constructing all the units the same, efficiencies will be e rperien ced during constru ction and operation. It is neit her economica l, nor permissable to move Perkins to La ke Norman. The lake is reserved for future units; the
R2 Environmental Protection Agency will allow no units t) be added until experience has been gained with operation of - scGuire and tests of cater guality have been conducted. ' Tbsre are benefits other than economics associa tad with nuclear generation. Nuclear fuel, unlike coal, avoids the problem of toxic stack gases. It is noted that nuclear plants are required to have lower contine radioactive emissions than are currently allowed at many plants burning low sulphur vestern coal which contains small amounts of uranins. The likelihood of nuclear plant sabotage remains unknown. - but it is well recognized that security controls at nuclear plants have been considerably increased under the new United - 3 States Nuc1mav Regt.latory. Commission Guidelines - / The concerns about nuclear power expre:tsed by some witnesses are Iagitimate and the commission shares these concerns. The evidence, however, is more than sufficient to support a finding that the projacted benefits to be derived from the development and operation of anclear power outwigh any associated risks. There is little question but that there are economic advantages in the use of nuclear power and, based on de evidence in this case. The commission finds no reason to try to avrest away* the primary responsibility and jurisdiction cf the United States Nuclear Regula tory Comaission in determining or setting safety standards for nuelear plants. ; O
63 C. Genera ting Ca pacity E] g In developing its f uture capacity addition requirements, the Public Staf f made certain major planning assumptions: 1 No oil or gas b urnin g bas e gen eration v ould be constructed;
- 2. Only base and peaking capacity would be constructed by the utilities; and
- 3. Retirements of generating facilities reported by the utilities pursuant to Commission Rule R8-43 would be carried out.
In determining an appropriate generating addition schedule, it is necessary to consider the type of facilities each m. utility currently has under construction, the proposed retirement of facilities, and the proposed units on which engineering has been completed and licenses have been requested or granted. It is also necessary to consider the lead time required to construct new generating facilities. If an unplanned additional 1000 ME of capacity were required 10 years hence, a coal unit would have to be constructed beca use it is impossible to design, ecnstruct, and license a nuclear unit within a 10-year period under Current federal regulatory conditions. The f ollowing are various estimates of lead times for ne w units made by the three utilities and the Public Staff.
84 Lead Times for Iow Units (Honths) - Public g E DUKE YEPCO Staff Huclear 13 1 159 iS1 144 Coal Low Sulfur 79 54* 90 86 High Sulfur 79 54* 96 86 Pumped Storage 1l0 130 120 120 combustion Turbine 37 30 24 36
- Construction time only Based upon all of the analyses discussed above and upon the " base case" onergy and peal-load forecast, the Public Staff developed what it considered a prudent construction schedule for additional generating capacity for each of the three major electric utilities operating in North Carolina based upon supplying the native peak load. The schedules are shown in table 16. The expected reserve margins, loss of load probability, and operational breakdown are shown in Tables 1 7 A ,- 173, and 18, respectively. At the time the Public Staff developed these tables, the 1977-1978 wintec peak and the 1978 summec peak were not known their estimates have not been adjusted for this new information and are consequently deemed overstated.
The construction program of CPSL is set forth in Table 19A. As the table indica tes, the company now has seven generating units either under construction or planned for service between now and 1990. CPGI's current constructisan program will result in system reserves as shown in Table
85 19B. Except for one year, these re serves are above t he
, miniana 15% sunner level which the Commission required in its 1977 Beport.
Ta bl e 20 shows D uke 's forecast suaner peak loads, its scheduled unit addition, and the reserves at the times of thes e peaks for the years 1978 through 1990. The current Duke forecast is predicated on the successful future L aplementa tion of its comprehensive load management prog ram for which no precedent has been established to date; consequently, generating capacity additions have been scheduled to provide a degree of fle xibilit y commensurate with the un known eff ectiv eness of the loa d ma na geme nt progra m. Duke's sch eduled reserves through 1983 are higher than design reserve requirement s. Duke considered changing the schedules for the in-service dates of McGuire I and 2 and Catawba i and 2. Howev er , as Duke witnesses Lee and S terre tt pointed out, the in-service dates for these u ni ts reflect the substan tial construction work already completed on th ose units and the economic benefits derived from following the present construction schedule. Consequently, D uke 's schedule is as follows: McGuire I will come into service in time for the vinter peak of 19 79- l 98 0 McG uire 2, by the suaser peak of 198l : Ca ta uba I, for the vinter peak of 198 l- 1982 ; and Catauba 2, for the sunser peak of 1983.
86 For the years 1985 and beyond, Duka plans the construction of a combinatica of base load and peaking ca pacity, - retaining anzisua flexibility in the scheduling of ongoing generating units. These plans include six standardized nuclear units and four duplicate pumped-storage units, these units being the most economical types of base load and peakin g ge neration, raspectively. For example, Cherokee 2 is scheduled to come into service for the summer peak of 1987, but the flexible schedule sonld allow this unit to be brough t into service for the winter of 1986-1987 or delayed to the summer of 1988. TEPCO's planned generation additions to meet its forecast peak loads are set forth in Table 2. TEPCD's peak load is expected by the company to grow at a compound annual growth
-..s cate of 5.3% over this period of tina. The effect of these generating addition plans on YEPCD's reserTe margin during the 1978-1987 period is shown in Tables 2 and 3. TEPCO's reserve margin for planning purposes during this 10-year period ranges from 1700 58 to 2100 HE. YZPCOs s current generation addition plan will not meet the Commission's reserve criteria.
87 CHAPTER VI DUTLOOK FOR CONSERV ATION AND LOAD BAN AGEMENT; A SUR VEY OF ALTER N ATIVE ENEFGY SOU RCES A. Introduction The forecast adopted by the Commission for the f uture growth in electricity usage in North Carolina is based in pa rt upon the premise that conservation and load ma na ge me n t will reduce the ra te of growth in electricity use. As pointed out by Public Staff witness Taylor H. Bingham, an economist with the Besearch Triangle Institute, conservation of energy sources should be a matter of concern for North Carolina. This State imports morE than 955 of its primary fuels. The availability of these f uels depends u pon a
; variety of factors, including price, fede ral and state reg ula tion, international agreements, su pplier con tracts, court rulingc, and the cost and availability of transportation for these f uels.
The evidence that is available to the Commission makes it
= lear that present conservation and load management efforts are not a tempo rary phen omenon but represent permanent changes in the attitude of society toward energy use.
Beca use ma ny of the c onserva tion and load management programs are in the early stages of development, the total impact of th ese programs cannot te assessed in this .eport. The Commissi ca recommends tha t the Public Staff and the
88 electric utilities present additional evidence of the impact of conservation and load management as such evidence becomes - availa ble. This chapter vill exa mine some of the recent eff orts to promote conservation and load management in North Carolina. T he chapter will also survey the status of alternative energy services. B. Lecislation The 1977 General Assembly enacted significant energy-related legislation. The most noteworthy enactment is House Bill 1003, the Energy Conservation Act of 1977. In this Act, the General Assembly stated that the North Caroli na economy and the welfare of its citizens have been jeopardized by shortages of natural gas, petroleum, and electric power. The Act contianes: .
. . . It is therefore declared to be the polic7 of the State of North Carolina to enen)nrage and promote the conservation of energy in 211 forms and to establish requirements and enforcement nonsures for mandatory conservation of energy in North Carolina, in order to prevent or reduce an adverse impact upon the economy of this state and in order to pesvent interruption of employment of the citizens of this state in commerce and industry and in order to prevent injury to their health and welfare due to shortage and high cost of energy in their homes . . .
The clear purpose of this legislation is to make conservation a matter of State polic y by encouragine the residential and business usa of sclar energy and insula tion. The act provides a tax r.rrdit to any person or corporation that constructs or installs a solar hot water heating, space
89 heatin g, or space cooling systes in any residential or commercial building in North Carclina. The tax credit is to be an amount equal to 255 of the installation and equipment cost of the solar hot water, he a tin g, or cooling equipment but not exceeding $l000. Ho use Bill l003 also allows a tax credit during the period January l, l977 - December 31, 1978, to any person or corporaticn t ha t installs new or additional insula tion, stora vindows, or storm doors in any building in the State which was constructed and occ upied p rior to Jan ua ry l, 1977. The tax credit is to be an amount, not exceeding $1000, equal to 25% of the cost of such insulation, storm windows, or doors. House Bill 1003 also provides tha t no single family or multi-unit residential building on which construction is begun on or afte:: January 1, 1978, shall be cccupied and connected for electricity until the b uilding is in compliance with the miniana insulation standards for recidential ecnstruction as prescribed in the North Carolina State Building Code. House Bill 607, which was also enacted by the 1977 General Assembly, provides that buildings equipped wi th a solar ener gy heating or cooling sys tem shall be assessed for taxation purposes as if su ch buildings were equipped with conventional heating or cooling systems. The bill makes it clear that no additional value should be assigned to the building for the difference in cost between a solar energy heating or cocling system and a conventional system.
90 House Bill l 171 a uthori=es the Housing Finance Agency to guarantee loans to los iscone persons for obtaining energy , conservation an terials for their residences; the mariana ' amount to be loaned is $1200. House Bill 654, which recognizes that " solar energy is the w orld' s most abundant and rene wable energy resource," appropriated $125,000 for the years 1977-1979 to North Carolina state University for the development of a solar thereal conversion unit which will prodoce a minimum of 1000 K9H of electricity per month; the unit is to be designed to operate independent of any outside energy source as auch as possible and should be reliable and relatively free of main tenance. The legislation specifically set as a guideline for the project that the size and operation of the ' unit should be practical for use by a home or business. The United states Congress has recently enacted the N ational Energy Conservation Policy Act. This Act strongly encourages the states to undertake a residential energy conservation program under rules and guidelines promulgated by the Secretary of the Department of Energy. Within 180 days of the promulgation of these rules, the Governor of each state or an authorized state agent any submit to the secretary a proposed residential energy conservation pla n. Althou gh the specific rules are not yet available, it is clear that this Act will materially affect state and local efforts on conservation.
91 C. U ti li ti es Commission and Public Etaff Activities sa Conserva tiog and Load M anacemen t The Commission is under a cont inuing manda te from the General Assembly "to p rom o te adeq unte, econ omical and efficient utili ty service to all of the citizens a nd residents of the Sta te. " North Carolina G.S. 62-l55, which was enacted in 1975, declares it to be the policy of the State to conserve energy through the efficie nt uti liza tion of all resources. Under this sta tute the Commission was expressly given the responsibility to study the fea sibili ty of chnrging electrici t y c cs to me rs by a system of nondiscriminatory peak pricing, with incentive ra tes f or the of f- peak use of electricity. Conse g ne n tly, the Commission has entered into cooperative agreements with the U nited States Department of Energy which provide that the Commission undertake demonstration projects directed toward the a ctual implementation of utility conservation a nd load mana gement programs and undertake the study of peak pricing electricity rates. , The Commission has entered into a number of research projects wi th the coope ration of the Public
. Staff, th e Research Trian gle Institute, ICF, Inc., Duke power Company, Carolina Powe r & Light Company, B lue Ridge Electric seabership C orpora tion , and other organizations.
One current program is stu dying the effects of pea k-loa d pricin g on residen tial electricity consunption ; this pro gram is f unded by the United States Depa rtmen t Ene rg y and of involves the cooperation of CPGL and Blue Rid ge EMC.
92 As a part of one cooperative agreement-, the Commission initia ted Docket No. 5-100, S ub 78, e ntitled " Invest igation s of Cost-Based Hat es , Load Banagement, and Conservation -' oriented End-Use Activities. " In its order setting public hearings in the docket, the Commission set forth three specific problems presently confronting the Commission in this area of regulation: 1 The need to conserve scarce resources;
- 2. Equity among rate classes in the structure of electricity (and gas) rates; and
- 3. Economy of operation of the electric (and gas) utilities providing service in sorth Carolina.
The Commission 'seld public hearings on load management and conservation programs in July and September i978. The evidence presented at these 1978 hearings was sufficient to establish that numerous and diverse programs of conservation and load management are underway in North Carolina. The programs are being cond acted not only by- the utility companies regulated by this commission but also by other organizations and individuals. A summary of the electric utilities' conservation and load management activities are set out in Section D beloe. Particular atte n tion is called to the evidence presented by the Public Staff at the July and September hearings in Docket No. 5-100, Sub 78. The Public Staff evidence showed J
93 that the State could benefit greatly from a residential energy conservation program. It was estimated that, if every homeowner installed conservation measures up to a level that gave him the greatest possible net saving, the average annual residential gas consumption could be reduced by as much as 47 dekatherms (Dth) or 47.45; statewide usage could fall by 11,444,000 Dth, which is 17% of total current gas consumption. Further, potential energy savings for an average electrically heated home could be 1,996 KUH per year or 17% of annual heating consumption; statewide savings could reach 663,500,000 KWH. The Public Staff recommended a residential conservation program for all residential customers . The Public S taff also offered evidence that the use of load management techniques by the electric utilities could reduce the demand on the system at selected times, alter the required generating plant construction program, and result in savings to the utilities in generation plant investment. The testimony offered by witness Spann focussed on two programs. First, the utilities could control certain industrial loads by interrupting those loads through the use of radio controlled switches: in exchange, these industrial customers would receive a discount based on the KW of controlled load. The second program involves the utility control of residential water-heating loads: in exchange for a flat monthly discount, the residential customer would allow the utility to use a radio controlled switch to interrupt residential water-heating service. Both programs
94 would be voluntary. The Public Staff recommended that load mana gement programs ba sed on the utility control of residential vaner heating and on interruptible industrial loads should be developed by CPSI, Duke, and YEPCO. The Public Staff witnesses testified that CPGL and Duke residential customers with electric hot water heaters would find a controlled vater hea ting rate attractive. ar. Bingham stated that if the custcaers were offered a cr>>dit of about 31 50 per month, all existing customers with heater sizes of 66 gallons or larger would appear to benefit by accepting the controlled water heating rate. Customers with available space would benefit by replacing their small unter heaters with 66-gallon units. seu home buyers would also find it beneficial to install a 66-gallon or larger unit. . . , Lithough not all residential customers would be expected to choose the controlled water heating rate, the Public Staff concluded that, given monthly credits in the $1 00 to 32.00 range, the demand for the rate cculd be significant. The Public Staff also found that there are about 100 large industrial customers in the Duke an d CP&L service areas which voeld have an immediate interest in interruptible serv ice, if such service could be ertended to noncritical loads. Under the assumptions and -}udgments used by witness Spann, the reduction in peak demand in 1990 resultin g from the interruptible industrial rates would be Sl0 HE for Duke and Ii0 55 for CPGL. The residential water heating ra te
95 would reduce the 1990 peak demand by 175 MW for Duke and 75 MW for CPGL. D. The Electric Utilities' Conservation a nd Load Management Pro grass The electric u tilities a re enga ged in a variety of conservation and load management programs. Each company is making a se rious commitmen t to the concept of conserva tion and load ma na geme nt. The approach of the companies, s however, has been cautious, consisting of experimental and pilot-scale pro jects rather th an vide-ranging i mplem entation. The com panies have concluded that this approach is necessary to ensure that the benefits of such p rog rams outweigh the costs which will be incurred by the companies and their customers. There are programs involving little cost, but many of the load management progra ms require costly switching and acnitoring equipment. Duke P ower C ompany Duke Power c om pany, in the loa d forecast hearings in Docket No. E-100, Sub 32, and in the conservation and load ma na ge ment hearings in Docket No. 5-l 00, Sub 78, presented the most de tailed evidence of any company on its conservation and load management programs. According to Duke wit ness Donald H. Denton, Jr., Vice Pr esident of Marke ting, Duke 's Load Management Program has as its goal the reduction in the growth of the company's
96 kilowatt peak load and kilowatt-hour sales This procran encompasses all sectors of Duke's ' business - residential, I commarcial, industrial, agricultural, and resale. Table 21 reflects Duke's projections of its load management goals during the years 1978-1990. By 1985 the accumulative reduction in peak load will have equaled the output of one large generating unit. By 1990 an additional generating unit will have been saved as a result of these load manngement efforts. These figures were incorporated in the company's overall forecast. The Load Management Program includes the following activities: the Energy Efficient Structure Program (EES) for residential customersr the improvament of insulation levels in RA (all-electric) and in non-RA sL - es; the education of customers in the use of heat pumps and high efficiency central cooling systems; the reduction of KN da and in dairy =4 iled ng operations and in large poultry houses; and the reduction of lighting levels in new bn4174 gs. Particular attention should be directed to Duke's program to reduce the industrial customers' damand at the time of the company's system peak load; Duke estimates the peak demand savings to be 84 2W in the stmmar and 24.6 IW in the winter. In 1976 Duke launched its EES P'rogram for its residential - customers. This program promotes reduction in residential demand through the use of additional insulation which meets -
97 EES standards. The commission has approved a special c onservation rate (Besidential Schedule BC) which off ers a m oneta ry incen tive to tho se resid ential customers who install insulation in compliance with the EES standards. This incentive is e:aal to the savin gs in Duke's construction cost which result from the lower residential , demand of the Schedule RC custome rs. Duke esti ma tes tha t 12,367 EES units will be added to the system from 1975 through the summer of 1980. The air conditioning saturation in these units will approach 90%. EES activity will reduce weather-responsive loads in these structures. The com pa ny has also started its E ne rgy E fficient Appliance (EEA) Prog ra ms, which inform Duke's customers th rough participa ting applia nce dealers of th e benefits of purchasing home appliances that are energy efficient. Duke provides its larger industrial customers wi th electronic informa tion in the form of timed pulses; these customers are therefore able to continually monitor their loads and better control their maximum dem an ds. Du ke presen tly has 140 custo mers with some form of monitoring system or load con trol. Duke is undertaking studie s of customer lead control which include not only residential water heaters but also the interr uptible service to its larger customers. The compa ny is testing radio control equipment in the ho mes of e m ployee volunteers to de termine the ope ra ting characteristics of
98 this type of control. m Du ke is a participant in a solar research project with , Electric Power Research Institut2. The company ir also a subcon tractor in a project to define for the United States Department of Energy the best applications of photovoltaics for commercial and industrial customers. Duke's customers who have installed solar-assisted heating and water syste ms are placed on the company's sclar rate schedules. Duke is studying these customers in order to evaluate the benefits of this form of supplemental energy. Carolina Power & Licht Concany In Docket so. 5-100, Sub 78, CPSL witness Barris Edge testified regarding the ongoing activities of CPSL in the ares of conservation and load management. CPSL provides support to the Edison Electric Institute's program on load na na gement a =d participa tes in the national study of rate design. In addition, auch work on load management is being performed in-house. According to ftr. Edge, the various activities have grown to the point that CPGL is establishing a permanent staff with the technical expertise to make the appropriate analyses and recommendations for load management activities and to follow through with the implementation of such activities. The CPSL load management program current 1T consists of the following: The Common Sense / Wrap Up Program; customer
99 education regarding heat pumps, insulation, a nd e ne rg y e fficient a ppliances; free energy audits; advice to customers in obtaining financing, materials, and contractors for energy conserva tion activities; and several experimental proj ec ts. The Connon Sen se Programs en co urage high levels of c insula tion and the use of energy efficient appliances in new houses, new apartments, and new business structures. CPSL estima tes tha t a n a vera ge 1500 sguare-foo t house conforming to the programs will sa ve 4,300 kilowatt-hours on heating and cooling requirements. The Common Sense House Program is also being extended to manufa ct ur ed homes. These homes represent a substantial proportion of new CPSL connections each year. The Erap-Up Program is the cou nterpart of the Common Sense Program which is applicable to existing buildings. These programs, as well as other means of conserving energy, are being promoted through bill inserts, personal contacts, and media advertisement. The educational efforts concerning proper lighting, efficient a pplia nces (in commercial cooking and processing, as well as in residential use) , use of heat pumps, and proper insulation a re applicable to all custome r cla sse s. For customers who desire to install equipment to automatically regulate their load, CPGL will install (for a monthly facilities charge) equipment to provide the me te r pulses needed for such continuous monitoring.
100 CPGL's load managenest program also includes various experimental activities. CPGL is involved in a time-o f-day 3 rate demonstration project in cooperation with the Commission and the Blue addge Electric 5embership Corporauion. This three-year project, scheduled to be completed in the summer of l 979, should provide substantial evidence on the effectiveness fi.e., customer acceptance and re sponse) of time-of-day rates in redistributing peak loads. Other experimental activities include a two-year project that examines the potential of interrupting service to reside ntial customers via radio control. In addition, CPGL - has surveyed the possibility of interruptible service to large industrial and commercial customers. Joint efforts with industrial companies are also part of CPGL's experimental activities. Cne such project is testing a line carrier communication system which also attempts to determine an optimum carrier frequency. In another project, distribution automation options which can perform multiple load management functions are being tested. These activities are part of the continuing efforts to make many of the technically feasible load management options economically feasible as well. vireinia Electric gd Power connant The load ma nageme nt efforts and energy conservation activities of YEPCC were also presented in Docket No. 5-100, ,
lol Sub 78. Edmond Vickham, Directot of L oad Management Applications for YE PCO , testified th at an active load management program is bein g undertaken purs ua n t to a corporate goal of reducing the projected peak load by 500 MW by 1985. The VEPCO load forecast and resulting construction schedule takes account of this proposed reduction. According to testimony by company witness Roach, VE PCO 's conservation activities include providing energy audits on an inf ormal basis to residential customers a t the customer's request. Vepco ha s plans fo r a pilot program which may be expanded to a more formal program. Ccamercial and industrial customers are curren tly of fered various ma te rials to aid _them in performing their own energy audit. Insulation and lighting reconnenda tions are a vailable to , cust om ers. C onse rva tion is encoura ged through educational materials and advertisements. VIP CO is revising its heat pump program tc en co ura ge heat pump aanufacturers to make availa ble efficient, reliable beat pu mps. Other programs in planning or in developmental stages include the following: Electric Energy Efficient Bone Program (similar to CPGL's Common Sense Program and Duke'; Energy Efficient Structure Progras), a reference manual on load ma na ge me nt , experimental activities on alterna te energy sources, and experimental projects on load management techniques. The experimental load management activities tha t VEPc0 is currently planning in volve both direct and indirect
1 02 techniques. Indirect managemen t pro-j ects involve time-of-usage rat es. For purposes of education and s comparison, a selected group of residential customers will ' receive hypothetical time-o f-usag e bills in addition to actual bills. Another group of residential customers consisting only of volunteers will be actually charged by time-of-usage rates. Planned direct load management activities include several volunteer projects to test the effects of interrupting service to hot water heaters. The experiments will allow YEPCD to evaluate the required hardware and customer acceptance of such programs. E. Alternative Enecqv Sources fuel ~ shortages
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necent and escalating prices of conventional fossil fuel or nuclear fuel energy systems have encouraged a close examination of the practical potential of other energy sources. Economic considerations of other alternatives will ultimately involve both the direct costs associated with each of the new scur=es and their effects on the health of the Stat e's economy. The availability, reliability, and cost of energy, from whatever source, will largely determine the cha racter and levels of industrial growth and resulting employment oppo rtunities in North Carolina. The vulnerability of this State's economy to both national
103 and internationa l actions f urther encourages development of
- a range of energy options. The 1973 oil embargo adversely a ffected both the personal an d the business ope rations of Morth Ca rolinia ns. In addition, the extreme shortages of natural gas severely crippled the state in the wi nte r of 1976. If severe economic and social consequences resulting from such occurrences are to be avoided in the future, a range of options must be available to meet the energy demands of N orth Ca rolina. While the present employaent of alternative energy sources appears to be supplemental in nature, the potential of the se sources must Le ex am ined.
Conservation, whi ch the Commission considers to be an extremely importan t alternative energy source, has been examined in an earlier section. However, in addition to the conservation efforts of t he utilities, cther groups a re ma kin g contribu tions. The North Carolina Energy Pesearch Institute has several projects dealing with ccnservation and alternative energy sources. The Energy Division of the North Carolina Department of Commerce has developed a Comprehensive S ta tewide Energy Conservation Pl a n , which is s. designed to conserve 8.05% of the State's total projected , 1980 energy consumption of 1,736.08 trillion BTU's, a t savings of l39.72 trillion B TU 's. The ma jor program for t he residential sec tor is Proj ect Conserve, which provides the homeowner with an objective analysis of the costs and saving s likely to result from such sensures as adding or increasing insulation, installing stors windows and doors,
104 and set *%g back ther:cstats. s The C 4asion reasserts its belief in the potential , impact of conservation. However, due to its extensive treatment in earlier sections, conservation will be c=itted from further discussions of alternative fuel sources. In Docket No. E-100, Sub 32, the public Staff and other-interested and concerned groups presented testimony regarding alternative energy sources. In additics, the c'=4ssion has taken judicial notice of other available material. The following energy sources have been brought *w the attention of the C- Aasion:
- 1. nuclear fusion
- 2. wind 's
- 3. geothermal 4 biomass and plant energy
- 5. fuel cells G. tar sands /cil shale
- 7. coal gasification/liquifica* den
- 3. solar Electric generation systems which use wave ac* don and tidal energy, both of which were discussed in last year's Report, appear un1_ ikely to be developed further during the present planning period. The technology required to obtain energy from wave action i= very complex and expensive. Therefore,
105 wave generation systems will prctably be delayed until less complex alternative sources of gene ra tion have been perfected and accepted. Due to the nature of the tidal conditions off the mid- A tlan tic shores, it appears that there will be little application for tidal energy generators in this area. However, there has been limited discussion of r placing these units in some of the inlets between the outer Banks to take a d van tage of the concentra ted tidal water flows at those locations. In addition, some examina tion is bein g made of ocean the rmal energy gradient devices, although there is little expectation of any substantial development of this source in the near future. Posion ._ _ Research on the nuclear fusion system has progressed to the point that most plasma physicists accept i ts technological feasibility. The fact tha t the actual fusion device is presently bein g designed is certainly a step towards a powe r- prod ucing system. However, the practical utiliza tion of such a source remains uncertain, due m primarily to the high costs and the problems associa ted with the very high temperatures involved. However, the fact that the supply of f uel for this source of energy is virtually inexhaustible and that there are no major radioactive vaste disposal proble ms make nuclear fusion ve ry attractive. Nevertheless, recent shifts cf research and development f und in g from fusion research to solar resea rch ha ve
l06 significantly delayed the program; it now appears that this country will not see any najar impact of this source during s the twentieth century. 12JL.d Interest in vind power continues to focus on the design of devices to be used as vind generators. However, the probles of la nd needed for giant vindmill installations has yet to be solved. For example, a University of California research study estimated that by the year 2025, 865 of that sta te's energy could come from renesable so urces, but tha t this effort would require 235 of the state 's land area for energy farms (for biomass fuel) and huge windmill installations. Recently, the California Energy Commission ordered 10 experimental vindmills to- further its studies. In North - Carolina, a wind turbine is to be built near Boone for the Blue Ridge Electrical 5embership Corporation. It will be the largest wind turbine ever conste.d and will supply 500 homes with required electricity. Although work is continuing on this source of energy, few expect it to have a significant impact on the supply picture in the next few years. Geothermal Within the last year. interest in geothermal energy sources and optimisa concerning their practical application have grown. However, the optimisa for more extensive
107 application continues to be associa ted with the western United States and vill probably have little impact on the anergy requirements and sources of North Carolina. Biomass The possibility of using biomass as a fuel source is receiving such attention f rom national and local groups. The Institute of Gas Technology (IGT) is involved in several such projects. For example, the design and poten tial of large advanced digestive sys tems which involve a mixture of water hyacinth, Bermuda grass, municipal solid vaste, and sewage sludge are being investigated on a pilot plant scale. Earlier laboratory testing indica ted that the se mix tur es would produce more methane than what many would designa te as pure biomass. In other p ro jec ts , IGT examined additives that may accelerate anaerobic sewage sludge digestion which may allow up to double the loadings. En anaerobic process for converting ocean kelp to s yn the tic natural gas was studied, and testing was conducted on processes to ob tain fuel from the thermochemical conversion of biomass. The North Carolina Ene rgy Division, Duke University, and Duke Power Company are examining alternative sources of ener gy , which include pla nt energy and other biomass so urces. A recent project funded by the Energy Division investigated the use of wood for small-s cal e power ~ gene ra tion in the State. Energy production f rom biomass a nd vastes is also receiving a ttention from private industry,
108 local universities, and technical groups. Champion Pa pers, Inc., proposed to convert annicipal garbage into energy to - be used for the production of paper at its mills in western North Carolina. The project proposes to use vaste-derived fuel and coal to produce 300,000 pounds of steam and 8,000 kilova tts per hour. In the load management hearing, a public witness, Thomas Guntar, tastified that vaste from agricultural processing, seunge sludge, residues from feed lots, and annicipal wastes are all potential biomass sour =es that are abundant in North Carolina. Thus the State's Potential for energy production from this alternative source is enormous; the question is the economic feasibility. T,gg 23.3d3, M Shale. S.agl casification 33g Licuification The use of tar ==nd= and. oil shales for processes that > yisla an oil-like matorial is both costly and environmentally guestionable. The large amounts of water needed for the processes and the solid waste disposal problems are primary concerns. Currently, the technology involved it in a very early stage of development and is not expected to contribute to alternate fuel . sources for many years. . The work on coal gasificatice and liquification is continuing. The E nvironmental Protaction Agency is conducting several projects on the various processes involved; however, the carcinogenic and mutagenic agents that result from these processes continue to be important '
l09 c once rn s. Since no maj or breakthroughs have occ urred recen tly, it is probable that this technology will not be accelerated in the near future. Puel cells Th e development of fuel cells has advanced from the first generation phosphoric-acid cells to the second generation stage of molten carbonate cells. The Department of Energy has funded several projects to improve the performance and endura nce of these second generation cells. Production methods, selection of sta ble anode materials, and the optimization of the fuel cell elec trolyte (mainly through the production of a lithina aluminate electrolyte tile) ha ve been studied in the ongoing efforts to improve the cost effectiveness of this source. Other experimental progra ms have evaluated the feasibility of using heavy fuel oils for producing fuel cell quality fuels through processes of hy drogasification, steam re formin g, hydrod esulf uriza tio n , and hydrocracking. Development has also been initiated for a reversible ele ctrochemical cell, serving both as a f uel cell and an electroly er. The Edison Power Resear ch Institute is involved in a multi-year endeavor to develop fuel cell components that can function even if the f uel gas stream contains as much as 200 ppa sulfur by volume. Sulfur tolerant anode ca ta lys ts and anode polarization must be studied.
ilo In New York City, the Consolidated Edison Power Company recently received approval for a 4. 8 megawatt fuel cell ' demonstration pla n t which vi u involve EPRI, DOE, United Technologies, and several u tilities. The Bev York City Board of Standards and Appeals ruled that fuel cells are not refineries ant thus approved the plan for the installation of the planned equip ment. This approval is quite significant and makes fusi cells the only power-generating equipment that can be installad in the city. In addition, the acceptance of this planned demonstration plant by the nanhattaa residents is allowing the schedule to move ahead, in contrast to other energy related projects. The areas to be investigated during the projeet include verification of e mission, load following characteristics, and aesthetic c?cracteristics of the plant. If the results are favorable, J it is anticipated that comaercial development of the plant will begir Solar The interest in solar energy as an alternative fuel has been onhanced because of the rising costs of oil and gas and becaus e ma ny perscas consider it the most att'. active alternative that is currently available. A witness for the Public Staff testified that the use of solar energy as a su pplement to conventional energy is now economical for some hot water heating applications. With the tax credits now available to users of solar energy and the increasing prices ,
lit of conventional fuel, some builders of new homes are fi nding that solar assisted heating of the structures is beccaing m ore at tractive. Pchlic witnesses presented inf ormation on solar potential in North Carolina. Currently, projects are being conducted by local universities, priva te individ uals, and other interest groups. There seems to be agreement tha t the potential of solar energy as an alternative fuel source deserves serious consideration. An extensive program being conducted by the United States Department cf Energy attempts to identify possible commercial and industrial applications of this technology. This work may result in an increased - market and a decreased price. In a report from a concerned te chnical group which investigated conceptual designs and photovoltaics through computer simula tion, opportunities for both improved performance and reduced cost were identified, but even minor market penetratica for the residential sector was not projected before the 1980's. The use of solar thermal energy (above 4000F) to produce _ energy-intensive chemical products as well as various types of solar coller; tion and s tora ge has recently been investigated. Some researchers now believe tha t conventional sola r sto ra ge may be supplemented with solar photochemical storage. This procedure would increa se _ both the temperature of the storage unit and its efficiency. Stanford University has reported that the efficiency achievable in their thermo photevol taic (TPV) solar cell research has more than do ubled in the last year. This
112 research, sponsored by ZPRI, involves conve rting incandescent light into electrical energy. As improved call s design further increases performance, the 35% level of efficiency that could make TPY systems economical in large plants nos seems a definite possibility. Loca lly, North Carolina Sta te University and the Basearch Triangle Institute are both doing significant work in photovoltaics and appear to be on the frontiers of such research. EPEI is also sponsoring projacts that involve the development of new concepts in solar energy, including the use of highly concentrated sunlight in high-efficiency photovoltaic cells. Proenction of low-cost photovoltaic thin film, which could convert sunlight to energy directly and e ff3cimatly , is also being examined. This new fils, which would not require a sunlight-concentrating systaa, appears promising, both in terns of costs and relative efficiency. Some proponents of solar energy expect large reductions in the costs of solar systems to result from economies of scale, tech.nological laprowmeats, and reduced labor costs as the ease of installation, innovative designs and competition all increase. Others do not expect dramatic reducticas; the cost of these systems is mostly in tJe metal, glass, and plastic parts, the control systems and the 2ans and pumps, the costs of which are not expectsd to come down.
ll3 Th e present technologies for solar heating are such that small water heating loads are at er better than a b rea k-e ve n cost; some water hea ting can the ref ore be accomplished through solar energy. However, it is not now economical, nor is it projected to be economical within the present pla nning period faced by the c o mmission and the power system designees, for heating requirements to be completely served by solar energy ca ptive systems. At pre sen t , it is only economical to use a ctive solar systems which provide approximately 50% of the total beating requirements in most cases. This means that the remainder of the requirements on peak days must he provided b y an alternate source. While the Commission is very supportive of solar energy utilization , it is concerned 2 bout solar heating systems with electrical backup. If the backup to a solar system is electric, it appears that either some design control or some economic ince nti ve shou ld be placed or of fe red , respectively, on solar installa tions in order to ensure (1 ) th at the energy availa ble from the solar captive system is used during peak times rather than off-peak times, and (2) that the peak demand on the electric system is reduced and not effectively increased by these systems. Because the undersizing of collectors and storage systems required by economics and because of the operational technolo gies of most of the sy stems now in place, the a vailable heat in storage vill be used in the late evenings and very early morning hours on
114 peak use days. N auxiliary heating systems will come on during some of the coldest hours of the morning and remain ~ on into the early day, which will be coincident with the ' normal time of the electric system wintar peak. This type of solar system would make the load factor of the electric utilities deteriorate and would thus cause an upward pressure on the cost of electricity. In fact, the increased cost from this effect may be greater than any net energy savings from the contribution of the solar equipment. T he matter of acostrola of these systems, then, is one which must be carefully analysed in the near futur.e. Thermal storage may be one answer if consumers insist on using backup electric heating or cooling systems. In order to encourage ins +=11a tion and proper *4-ing of thermal storage equipment where electric backup. is used, with solar heating - installations, the commizzion concludes that utilities should make voluntary experimental time-of-day rates
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available to such installa tions. suaverv Alternative e nergy sources do exist in varying stages of development. However, the composite impact of these sources including conse rvation is difficult to quantify with the data currently available. It is expected that some of thase so urces will be further developed and will gradually become _ an integral part of the energy supply. While research and develo pment in these potential areas is encouraged, the
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II5 Commission a ust continue to plan for the State's energy needs in the most realistic manner. Thus, the present f orecast cannot be reduced as much as some pa rties would like. However, the C ommission expects that, in future planning periods, some of these areas will be more quanti fiable and, thus, will play a larger role in supplying sor*h Carolin a's ener gy needs.
!!6 CHAPTER VII COECLUSICES j The forecast plan adopted in this 1978 report shows a decline in the rate of growth of the peak loa d of both Carolina Power & Light Company and Duke Power Company. In its 1977 Report the Commission found that the probable annual rate of growth in peak load for both CPSL and Duke would be approximately 6.9% d uring the years I 976-1990. In the 1978 report the Co==4 ==i on has adopted for its capacity plan an annual peak load growth rate of 5.2% for CPSL and
- 5. 4% for Duke.
The Comm4 esion's t 978 forecast is based in large part upon the premise that conservation and load mana gement efforts a vill have a substantial effect on the future growth of electricity usage in North Carolina. . The Commission has considered the commervation and load _ management activities presented in its Docket No. 5-100, Sub
- 78. The Public Staff recommended that CPGL, Duke, and YEPCD -
develop two load managenest programs. First, the utility control of residential sater-heating loads: in exchange for ~ a flat monthly discount, the residential customer sould allow the utilities to use a radio controlled switch to interrupt residential water-heating service. Second, the utility control of certain interruptible industrial leads: in exchange for a discount based on the EN of controlled
117 load, indust ria l cu s tome rs would allow the utilities to interrupt certain ind us trial loads through a ra dio cont rolled switch. The commission will order the three electric utilities to file proposed plans for t he se two programs within 270 days. Furthermore, the three utilities will be required to file voluntary rates incorporating time-of-day pricing to th ose customers who either ins tall solar equipment, thermal storage equipment, or a c ombina tion of the two for the purpose of providing space heating. The rate schedules will be filed on an experimental basis. It is expected that t his experimental rate vill of fer sufficient economic incentives to such customers so that the energy available from such a system vill be used during the pea k times of the electric utilities and that the peak demand vill not be increased by solar systems.
118 TABLE 1. Capacity Addition Plans for Virginia Electric & Power Company ygga vapco Plan .Public Staff Plan UNIT "W C7!IT MW I i 19798lNorthAnna2 907 l North Anna 2 + Update 934 W i i t i 19808 I P- 1=4a7 + Uprata 286 W' l I : I 19813l l North Anna 3 907 wi i i l 19823 ,' Bath County 1, 2, 3, 4 1500 l Uprats + Bath County 1, 2 731 W r Bath County 5, 6 750 I I I 19835 e i North Anna 4 907 WlBorthAnna3 907 I I i 19848I l Uprate + Bath County 3, 4 731 WlNorthAnna4 907 g
, i 19858 I l Surry 3 900 WI l 1
1 19868I a Bath County 5, 6 700 WI l , 8 1 1987SlBaseLoadUnit W (fossil) 910 8 S urry 4 900 i ! I t 1988SI VZPCD did not Base 1100 W l *orecast beyond 1987 I I i
' 1100 19895 W ;8 l Base 1
1 1990S: 3 Base 1100 WI e I i 1991S I I Base 1100 We I 1 8 1952S I 8 1100 Wi 8 lf Base NCTI: There appear to be differences in the values used for Bath County units Dy the two parties.
119 TABLE 2. Reserves Which Will Result From Capacity Plans if the VEPCO Forecast Occurs VEPCO CAPACITY PUBLIC STATT PLAN CAPACITY P*.AN VEPCO TCRICAST OF Installed Installed PEAK LCAD Capacity Reserves Capacity Reserves YEAR (gw) (Mw) (g) (Mw) (g) 1979 Se 8,760' 10,432 l 19.1 10,483 19.7 Wl 6.160 10,736 31.6 10,735 31.6 1980 S ! 9,260 10,468 8 13.0 10,769 16.3 Wj 8,670 10,773 24.3 11,021 27.1 l 1981 S 9,810 10,504 i 7.1 11,676 19.0 We 9,210 10,773 8 17.0 11,544 25.3 I i 1982 Sl10,250 12,004 3 17.1 12,035 17.4 WI 9,760 12,613 , 29.2 12,275 25.8 1 1983 S 12,3'44 16.8 12,947 22.4 Wl10,570 i 10,340 13,006 g 25.8 12,972 25.5 t 1 1984 58 12,757 3 13.9 13,471 20.3 Wl11,200 10,930 14,013 l 28.2 13,703 25.4 I i 1985 Si 11,860 13,795 g 16.3 14,371 21.2 W8 11,540 14,104 e 22.2 14.603 26.5 I i 1986 53 13,886 ! 10.6 15,071 20.1 Wl12,550 12,170 14,205 l 16.7 15,3r3 25.7 8 I 1987 Se 13,270 14,796 11.5 15,971 20.4 W! 12,820 15,045 e 17.4 16,203 26.4 e f
% Growth Rate 5.3 5.8 4.5 5.4
23 s
'ZAB2 3. Reserves Which Will Result From Capacity Plans if the Public Staff Forecast Occurs Punr.:: c;,arr vzPeo cAPAcr27 CAPACT2T PI.AN PLAN PUBL2C STAFF FORECAST CF 2nstalled 2nstalled PEAK LOC Capacity Reserves capacity P.eserves YEAR rMw) freti tt1 (MW) (t) 1979 3 8,849 10,483 18.5 10,432 17.9 W 8,280 10,735 29.6 10,736 29.7 1980 S 9,364 10,769 15.0 13,468 11.8 W 8,762 11,021 25.8 10,773 23.0 1981 3 9,909 11,676 17.8 10,504 6.0 W 9,272 11,544 24.5 10,773 16.2 1982 S 10,485 12,025 14.8 12,004 14.5 W 9,812 12,275 25.1 12,613 28.5 1983 5 11.095 12,942 16.6 12.344 11.3 W 10,383 12,972 24.9 13,006 25.3 1984 S 11,741 13.471 14.7 12,757 8.7 W 10,987 13,703 24.7 14,013 27.5 1985 5 12,425 14,371 15.7 13,795 11.0 '
W 11,627 14,603 25.6 14,104 21.3 1986 5 13.148 15,071 14.6 13,886 5.6 W 12,304 15.303 24.4 14,205 15.5 1987 5 13,913 15,971 14.8 14,796 6.3 W 13,020 16,102 24.4 15,045 15.6 1988 5 14,723 17,071 15.2 7 W 13,777 17,303 25.6 1989 5 15,579 18,171 16.6 ? W 14,579 18,403 26.2 1990 S 16,486 19,271 16.9 7 W 15,423 19,503 26.4 1991 S 17,446 20,371 16.8 7 W 16,326 20,403 26.2 1992 S 18,461 21,471 16.3 7 W 17,276 21,703 25.6
% Growth Rate 5.8 5.8 5.7 4.5 W
121 TABLE 4. Levels and Growth Rates of Demographic Variables Used in the Public Staff's Energy Forecasts and Load Forecasts Growtn Growth N. C. 1476 :*te 1995 Rate 1gon
- i Poculation 5.469 i 6.084 l 6.465 (Milit:ns) 8 (1.2%) : (1.2")
I Real Pe*sonal '7.349 25.962 1 33. 3 *:) Inccme (Billiens) e (5.0;) 1 8 (4.3-) Real Incare 3.172 8 4.432 5.157 Per Capita (OCO) l (3.8-) l (3.1 ) I 1 Manufacturing 757.5 1050.3 i 1183.9 Employment (000) : (0.6-) I (2.6;) i l Real Retai~ 13.657 8 20.654 1 25.25C Sales (Bill: ens) I (4.7-) I (4.1%) I Households 1.788 l 2.193 2.433 (Milliens) . 8 (2.3%) l (2.3%) I I e U. 5. l l 8 1 Industrial Procu: tion 1.295 8 2.056 2.540 Ino*x 8
' (5.3-) l (4.3%)
i s CP! 1.705 l 2.755 l 3.415
- ( 5. 5 *. ) (4.4-) .
I i WP! !.230 ' 3.032 i 3.675 l ( 5. 8';) 8 (3.9%) Price Ceflator 1.644 2.846 8I 3.604 Gasoline Fuel 011 l (6.3%)
, (4.8-)
WP! - Fuels 2.657 l 6.477 S.455
- (10.4%)
I l (5.5%) t
122 s TABLE S. Public Staff Trend Forecast of CP&L Energy Consumption by Customer Class (GWH) Growth Grcntth Grewtn Customer Class 1976 Rata 1985 Rate 1990 Rata jogg 3 I I Residential (Ac:ua 6.491 l) 3 10.722 8 14.024 1 15.614 Qi l(5.7%) I (5.5%) I l (5.5%) Ccommercial 4.016 8 7.018 9.662 10.979
- Of I(6.4%) II (6.6%) I (6.6%)
I i Incustrial 8.759 18.293 1 26.738 ; 31.123 13 : (8.5%) I (7.9%) g (7.9%) II I I Wholesale and Other 6.649 8 10.958 14.109 i 15.611
- 01 1(5.7%) l(5.2%) I (5.2%)
i I Total Sales 25.915 I 46.991 64.533 1 73.327
- CH I(6.8%)
l(6.6%) e I (6.6%) i I I Comoany use 36 l 612: gg2 95 2 I I SEPA 125 l 121 121 121 3 3 Lossas 1.492 1 3.3023 3 4.532 3 5.148 I I I Total Ener9y 27.578 5 50.475 8 69.270 1 78.691
- Of I(6.9%) 8 (6.5%) I' (6.6%)
Peak Demand 5.121 ! l(6.4%)12.777 i: (6.5%) 9.375 14.486
- Of a(6.9%) :
f i e Preliminary 1977 Company estinsees Total sales x .0013 3(Total sales + company use + SEPA) x .070 w
123 TABLE 6. Public Staff TREND Forecast of Duke Energy Consumption by Customer Class (GWH) Growth Growth Growth Custene Class ic76 Rate 1985 Rate 1990 Rate 199?
'Actuai;I
' l l i
e Residential 11.327 I 18.237 i 23.776 26,423
- CH (5.5%) (5.5%)
l(5.4%) Cc ne cial '.937 l 13,959 19,213 8 21.E34 CH 8 (6.45) l (6.6%) l(6.6%) inctus trial 12.417 e 35,574 1 49.858 1 57,067
- CH I (7.6;) 1 1 (7.0%)
knolesale anc Otner
- CH 7.227 l (7.6;) 13,951 Il(7.0%)
g I (7.6%) 20,132 Il(76%) . 23,330 1 g Tctal Sales 44. 59 I R1.721 1 112.980 e 123.669
- CH I e (6.7%) 8 (6. 7*, )
I(6.91) g I Comoany Use 12; ' I 2382 1 33023 377 2 g i SEPA 254 1 277 . 277 1 277 Lesses 3,432l b.261 8.6483l 9,846 3 3f I ictal Ener9y 88.M3 122,436 1 139,297
' CH 48.759l' (6.i4; l(6.7%)
g 1 (6.7%) Peak Demand 8.501 4 15.3S5 21.209 i ~4.127
- CH f(6.~1) l(6.6%) I (6.7%)
i I i 1976 : rany ferecast '
' Total sales x .C029 3(Tetal sales + ce=pany use - ! EPA) x .076
124 s
/
TABLE 7. Comparisons of Growth Rates of Electricity Irices and Inflation Measures 1977. Anna t 1985 Annual 1990 Estimata- Growth F,stimata crowth Estimata Duka 28.0 6.3% 45.7 4.J% 56.5 Electricity Price Mills /IMH Mills /INE Mills /IWH CPtL 29,8 6.7% 50.1 4.2% 61.6 Electricity Prica Mills /INE Mills /INE Mills /INE Consumer Prica Indez 181.7 5.3% 275.5 4.4% 341.6 Wholesala Prica Indez 134.9 5.71 303.2 3.9% 367.5 a
125 TABLE 8. Carolina Power & Light Company's Energy Forecast Year E 1978 28,586,688 1979 30,301.864 1980 32.209,533 1931 34,208,255
*SR2 36,329.294 1963 38,470.979 1946 40,779,364 198! 43,064,739 1986 45,475.140 19S7 47.884,926 1938 50,376,243
~
Icag 52,943,431 19?G 55,751.539 1991 58,594,868 I??2 61.574,611 1911 64.539.317 19'6 67,637,204 1753 7.7.816.153 , 3016 74,256,144 19,7 77,777,593 i i w h
126 s TABLE 9. Duke Power Ccmpany's Energy Forecast Regular Territorial Sales Energy Year GWR GWR 1978 48,988 52,915 1979 51,798 55,918 1980 54,830 59,138 1981 58,750 83,308 1983 81,881 88,825 1983 85, 157 70,089 1984 88,473 73,537 1985 71,983 77,287' 1988 75,599 81,128 1987 79,4 2 85,183 1988 83,430 89,385 1989 87,807 93,793 1990 92,004 98,425 e e
127 TABLE 10. Virginia Electric & Power Company's Energy Forecast Annual Output Increase g (LfWi! x 103) - 1577 38.578* - 1978 41,500 7.5 1979 44.800 6. 0 1990 46.100 7.4 1981 51.400 G.9 1932 54,700 6.4 1953 58.100 6.2 1984 61.650 6.1 iDR3 63.350 6.0 1966 69.200 5.9 1957 73.200 5.8
= Actual O
m
128 TABLE 11. Public Staff's Noneconometric Energy Estimates for the Residential Sector (1000 MWH) Historical Historical Sales Average use Trended Avg. Use txponen- Exponen- cxponen- Satura- Avg. of Avg. of
- al .inear tial Linear tial tion All Most veer Linea Trono { Tr=nd! Trono2 Tr.ne2 TrendJ Tmd T m d E e matn Like1 4 i
B l Carolina 3%eee and '_ien* Coneany 1977 l 6980 7152 l7073 6991 l 6980 7085 7265 l 8594 7549 1982 8 8766 11623 9708 10793 10076 9748 10103l8766 l10770 1987 3 10522 18888 1 12501 14411 1 10522 16254 1 13137 13749 12503 8 8 I i 1992 ' 12333 30696 l15640 20341 1 12338 24256 1 15538 !!735 14505 I I I i 1995 's 13410 41078 8 17696 24907 1 13410 30697 8 16832 22575 15977 I
- g. -
8 Duke Powe comoany 1977l12250 12143 l12548 12271 g 12250 12272 l 13936 12553 12345 1982l15354 10058 16838 17551 1 17408 16373 16533 17550l15354 I 1987 I 18458 26635 1 21615 24768l18458 24768 3 20893 22223 20322 8 I i 1990 8 21562 3S286 I 25977 32990 21562 34582 1 24551 23787 24353 I I 8 8 l 1995 23425 4960a 30475 40132 8 23425 42069 1 26727 33694 26876 Motes: I Trend of historical esicential consuusition fer the period 1955-1976. 2 Trend of historical 10A!/custumer times linear trend of customers. krend of sales divioed by trend of cus*m multiplied by linear trend of custcaers. Mocified linear trend (no value above 100.0) for each apolianca multiplied by linear tnnd of resicential customers alltipliec by estimated annual consunption per custo-mer per top 11ance. totaled for esen year. Average of sales linear trend, average use linear trend and saturation estimeta.
129 TABLE 12. Public Staff's Noneconometric Energy Estimates for Commercial Sector (1000 MWH) Averane Use llistcrical Sales Per Custoner Averace Average of 2 I All MUS* 'Ik'I/ ' Year Linese 1 Exoonential 1 Linaar 2 E xoonanti al Estimates Estimates - l Carolina Power an1 LinNt Cervanv i 1977 4311 4326 1 4333 4361 8 4345 4347 e i 5456 6270 5825 612S I 5920 5641 1902 3 l 8 1 1907 6601 9088 7470 C484 7914 7035 8, l l 1992 3 7746 13172 1 0318 . i39 1 10461 8532 1 i
- s475 1895 8433 16458 l 10525 13947 l 12341 I
i Duka Dowar Comoany l 1 8574 8598 8664 8635 8630 8619 1977 l 1982 1 10808 12430 11251 11562 1 11513 11035 I i 1987 I 13042 17969 14068 14870 15077 13:55 l l I 1992 15276 25977 17118 18663 l 19259 16197 n i , , 1995 1 16616 32407 l 19060 21196 3 22320 178386 l 14ctes: Based on historical data for the period 1969-1976. Historical trend (1969-1976) of averace use per custcmer multi: lied linear trend of cower:141 customers. Averace of historical linear trend and everace use linear trend.
130
"'ABLE 13. Carolina Power & Light Company's Load Forecast Tese g 1s78 sa2s 1979 6203 IMO 6414 1931 7034 1982 1480 15E3 7323 1984 8427 1985 8914 IS86 9424 1987 9933 1984 10463 1981 2D983 1990 11549 1992. 1:122 __
1992 22732 12*3 13337 1994 13?S9 1995 14393 1996 15286 1997 159E1
131 TABLE 14. Duke Power Cor::pany's Summer Peak Load Forecast Load Peak Growth Factors Year MW M_W % % 1978 9,522 396 4.34 63.4 % . 1979 10,036 514 5.40 63.6 1980 10,601 565 5.63 63.6 1981 11.335 734 6.92 63.8 1982 11,907 57 5.05 63.9 19C3 12,521 614 5.16 63.9 1984 13,170 , 649 5.18 63.8 1985 13,857 687 5.22 63.7 1986 14,583 726 5.24 63.5 1987 15,333 770 5.28 63,3 1988 16,175 822 5.35 63.1 1989 17.028 853 5.27 62.9 1990 17,941 913 5.36 62.6 Peak loads through 1980 were recuced slightly from " trend" to match better with the conservative energy forecast.
132 "aBLE 15. Duke Power Company's Winter Peak Load Forecast Year Peak Growth ww Mw % M77-75 9,261 441 3.00 1978-79 9,792 331 3.73 1979-80 10,376 344 3.M IMO-41 11,132 736 7.29 USI-42 11,730 3M 3.37 iss2 12,232 622 3.30
~
1M3-44 12,996 644 3.21 ~ 1M6-43 D ,464 444 3.14 Ut3-46 14.368 706 3.13 1946-47 U ,009 721 3.02
'1M7-44 U ,238 749 4.M 1964-49 14.512 774 4.M 1M9-90 17,4D 801 4.32 Peak. loads through '79-80 winter were rechaced slightly fnun " trend >
to match better with the conservative energy forecast.
133 TABLE 16. Public Staff's Capacity Addition Schedule (MW) YEAD CPR DUKE VESCO I 1 1978 5 I - I - 1 North Anna 1 (898) wl -
, - i -
1979W5 l Ucrate (105) 1 - lNorthAnna+Ucrate(934)
- 1 - -
g g 1980 5 i Roxtore 4 (720) I McGuire 1 (1180) l Peaking + Uprete (286) Wl - 1 I l 8 19S1 5 i Peaking + Ucrates (212) 1 McGuire 2 (1180) : North Anna 3 (907) W , - g g - 1982 5 i Hayo 1 (72C) 1 - 1 Uprate + P.S. (731) Wl - I Catawna 1 (1153) 1 - 19335l Harris 1 (900) I - lNnrthAnna4 (907) Ws - I Catawba 2 (1153) g 1984 5 I Mayo 2 - 1 Uprate + P.S. (7 31) W3 - l720) l Cherokee (1280) 1 - I 1935 5 i Peaking (15C) 1 - (900) W i Peaking (150) 1 Perkins (1230) l Su-ry 3 Harris 2 - I P.S. (700! t 19865l8 W - (97~.)l , Cherokee(1280) 1 - 1987 5 8 undesignated ' (1150) 1 - Surry 4 (900) Wl - I Perkins (1280) 3 e i 1983 5 l - l Peaking (250) l Brse 1100 W3 Harris 3 (9001 l Cnerokee (1280) l - 1989 5 - - I Base 1100 W l Undesignated (1150) lPerkins
- (1230) 3 - e I I '
1990 5 - (250) Base 1100 I I W
- Base '
lPcaktno (1280) , 1991 5 l Harris 4 (900) 1 Peaking (250) g Base 1100 W j Peaking 250 i Base (1280) g - 1992 5 l Basa (115C) l Peaking - Cycling (500) i Base 1100 WI - I Base (1280) 1 - I t ! Obtes () Parentheses tndicates MW addition P.S. Pumoed Stora;t
.ocate - Increase L eatin; cf esistiag units
134 TABLE 17A. Reserve Marg 2.ns Based upon the Public Staff Addition Schedule (%) CMt. (UKE 13g Su:m=P wintee Sussaw VEPt0 winte- g wintee . 1978 22.7 22.4 25.5 22.5 1979 16.7 16.3 14.2 25.3 1980 18.5 14.7 18.5 20.0 19.1 21.6 29.6 1981 15.5 17.3 15.0 25.3 14.5 23.9 20.0 1982 17.6 16.2 17.8 24.5 1983 16.0 21.2 14.8 21.2 19.4 16.7 25.1 1984 21.8 21 .4 16.6 24.9 - 19.7 15.8 20.8 1985 15.8 15.3 14.7 24.7 1986 15.1 19.6 15.7 19.3 16.9 15.2 25.6 1987 23.0 19.1 14.6 24.4 20.2 15.3 18.8 1988 15.6 20.6 14.8 24.4 1989 16.3 19.4 15.9 16.1 22.4 15.5 25.6 1990 18.1 18.2 16.6 25J 15.0 15.5 17.8 1991 17.6 16.1 16.9 25.4 1992 15.1 17.0 16.8 20.2 16.7 15.3 26.2 16.9 16.3 25.6
=.Ju1LE 173. Los.3 of Load Probabilities Expected Fre:: 1 Public Staff Additions (days per season) mt curr 'nPc0 Yeae Suw winter Sumer winter Summer wintee '
1978 3.3 5.5 2.6 3.7 9.5 4.5 1979 6.0 9.8 6.1 8.2 *' 1980 4.6 6.8 .. 7.9 4.5 6.2 9.5 1981 7.2 12.1 4.6 3.6 5.0 7.5 5.9 1982 6.0 10.7 8.1 4.4 1983 4.3 9.8 4.9 7.9 7.6 4.3 8.3 5.1 1984 4.1 7.7 8.4 1985 4.7 9.1 4.6 7.1 11.9 9.0 5.3 1986 5.1 8.3 A.1
- 9. 9 !.8 5.4 8.7 1987 3.5 4.2 7.2 8.7 5.6 9.1 4.1 1988 7.1 6.7 7.8 5.1 8.2 3.6 1989 6.6 5.4 8.4 5.3 1990 5.3 7.7 3.3 11.0 8.3 5.8 7.5 3.1 1991 5.4 9.9' Ing 9.1 6.2 7.6 3.2 4.1 9.1 8.7 f.1 8.0 3.3
135 TABLE 18. Public Staff Projections of Percent of Plant Operated as Bace T/.ad, Cycling and Peaking Year Bas? Cyc1,13 g Peaking Ce o'ina Power and Licht Cemeany 1976 48.6 27.4 24.0 1979 48.9 27.5 23.6 1980 E3.4 25.1 21.5 1991 52.8 24.4 22.8 1982 49. 30.0 20.9 1983 5?.7 27.2 19.1 1984 50.1 32.1 17.8 1985 15.4 31.7 18.9 1985 52.6 23.9 18.5 19S7 01.3 31.9 16.8 1983 51.3 31.9 16.8 1989 54.4 29.8 15.8 1990 53.1 32.3 14.6 1991 55.7 30.5 13.8 1992 54.0 31.9 14.1 Duve Power Commanv 1978 49.7 32.2 18.1 1979 49.7 31.2 18.1 19B0 89.4 34.1 16.5 1981 49.2 35.6 15.2 1982 49.2 35.6 15.2 1983 C3.1 28.9 18.0 1988 50.3 34.i 15.5 , 1985 54.6 32.1 13.3 1986 51.9 36.1 12.0 1987 55.0 33.9 11.1 1988 55.9 31.5 11.6 1989 55.3 33.5 10.9 1990 57.4 31.4 11.2 1991 55.6 32.8 11.5 1992 53.5 33.8 12.7 Virginia Electric and Power Comsary 1978 49.5 38.7 11.8 1979 54.0 35.3 10.7 1980 52.9 34.3 12.8 1981 50.9 37.3 11.8 1932 49.7 35.3 15.0 1923 53.2 32.9 13.9 1934 51.3 30.1 18.6 1935 48.8 33.3 17.4 1986 46.5 32.2 21.3 1987 49.5 30.4 20.0 1988 48.0 33.2 18.8 19?9 51.1 31.2 17.7 1990 49.9 33.5 16.6 1991 52.6 31.7 15.7 1992 55.0 30.0 15.0
136 TABLE 19A. Caroli:s Power & Light Company's capacity Addition Schedule 5d" 1 a thJe capaciev (?G) Ooera tiets saxame 04 no uso sayn it. 7:D 1982 uare oz no uns sar:sa et 900 . uss Harria #2 900 1986 Isrria #3 900 1990 Earris #4 900 USA n e srs czst u.n:: mer s 53-1 1150 1989 sa-2 1150 1991
/
"J' u3LE 19B. Carolina Power & Light E'mpey's
. Projected Summer Peak Reserves Year taserve 197a 20.4 1979 22.3 iMO u.s isst u.s .
US: 20.4 1943 U.6 1984 U.6 1985 19.2 1966 22.3 1987 16.1 1988 13.3 1929 23.6 1990 25.4 1991 28.9 D*2 22.7
137
.0. Duke Power Company's Summary of Load, Cacacity and Reserves (MW)
Forecast Tcheduled Total scheduled Scheduled Summer Peek carecitv Addittems Capselty p e se rve s Re s e rve s ** 9 522 None 12 446 2 924 30.7 A 10 036 None 12 446 2 410 24.0 30 10 601 r.ccuire 1 (1180) 13 626 3 025 28.5 781 11 335 McCuire 2 (1180) 14 785
~
3 450 30.4 SCI &C Ccetract Term (-21) 1982 11 907 cetawba 1 (1143) 15 930 4 023 33.8 1983 12 521 Catawba 2 (1145) 17 006 4 485 35.8 setirewnts (-69) 1984 13 170 metirements (-228) 16 778 3 608 27.4 1985 13 857 cherokee 1 (1280) 17 797 3 940 28.4 Retteenents ( 261) 1986 14 583 Retiresents (-93) 17 704 3 121 21.4 1987 15 353 Cheroh*e 2 (1280) 18 984 3 631 23.7 1988 16 175 Perkins 1 (1280) 20 264 4 089 25.3 1989 17 028 Diernkee 3 (1280) 21 544 4 516 26.5 1990 17 941 None 21 544 3 603 20.0
138 s TABLE 21. Duke Power Company's Summa.mf of Projscted Load Management Gcals stmea:a w!mst atInst REDUC 710Bf REDUCTION REDUCTIC38 TEAR (MM? , (MW) (MKwit) 1977 las 196 469 1978 281 313 838 1979 392 416 1130 1980 511 532 1458 1381 635 666 1809 1982 759 808 2130 1983 884 960 2572 1984 1008 1128 3377 1985 1143 1295 3422 1986 1270 1486 3893 1987 1385 1644 4334 s 1988 1501 1896 4789 1989 1615 2124 5259 1990 1721 2364 5474 NOTE:
- 1. Summer and wtater megawatt reductions are 4 & 21atave
- 2. Energy reductions are annual values
.}}