Duke Energy 2010 Annual Report Download - page 9

result, we expect to retire and replace our entire fleet, excluding hydro units, by 2050.
Modernization isn’t a “nice to have” strategy; it’s a “must have.”
In 2010, we made significant progress in constructing four advanced, highly productive,
cleaner energy generation plants, the centerpiece of our modernization strategy:
■EDWARDSPORT POWER PLANT IN INDIANA. When operational in 2012, this 618-megawatt,
state-of-the-art Integrated Gasification Combined Cycle (IGCC) facility will replace the
site’s existing coal units, in service since 1944 and 1951. It will be the largest power
plant in the world to use advanced technology to gasify coal, strip out pollutants, and
then use this gas to produce power. Indiana coal will
help power homes, businesses, schools and factories
and reduce emissions to the environment. Duke Energy
has received approval for local, state and federal
tax incentives totaling more than $460 million for
the project, which will help mitigate customer rate
increases over time. Construction remained on schedule
in 2010, but the scale and complexity of the project
have pushed costs higher than the previous estimate
of $2.35 billion. We have a pending request before
the Indiana Utility Regulatory Commission to approve
the estimated cost increase from $2.35 billion to
$2.88 billion. A decision is expected in 2011.
■CLIFFSIDE POWER PLANT IN NORTH CAROLINA. This advanced
coal-fired 825-megawatt facility is expected to go on
line in 2012 at an estimated cost of $2.4 billion. Once
it is operational, we will start to retire 1,000 megawatts
of generation at older, less efficient plants — some built
in the 1920s. At year-end, the project was on schedule
and on budget and had been awarded $125 million in
federal clean-coal tax credits.
■BUCK POWER PLANT IN NORTH CAROLINA. Construction of our
620-megawatt combined cycle gas-fired Buck plant
is estimated to cost $700 million, with an expected
in-service date in late 2011. It ended the year on
schedule and on budget. By 2015, we plan to retire
the construction site’s four existing coal units, all built
between 1941 and 1953.
■DAN RIVER POWER PLANT IN NORTH CAROLINA. In October
2010, we broke ground on our second 620-megawatt
combined cycle natural gas-fired plant — the Dan
River facility. The $710 million plant is expected to go
on line in late 2012, and we plan to retire the site’s
three existing coal units that were built between 1949
and 1955.
Additionally, we are investing up to $1 billion in the long-term build-out of a digital
two-way communications network along the power grid. Once complete, customers will be
able to better manage their energy usage and save money. All these modernization projects
are creating jobs in our communities.
USFE&G MAJOR CONSTRUCTION PROJECTS OVERVIEW 1
(dollars in millions)
Spent as of 12/31/2010 Estimated expenditures to complete project
3,000
2,500
2,000
1,500
1,000
500
0
605
2,275 750
1,650
275
425
460
250
Edwardsport
IGCC Plant
Indiana
■618 MW IGCC facility
■Expected in service in 2012
■Project is 80% complete 2
Cliffside Advanced
Clean Coal Plant
North Carolina
■825 MW advanced clean-coal unit
■Expected in service in 2012
■Project is 80% complete 2
Buck Combined
Cycle Plant
North Carolina
■620 MW combined-cycle
gas-fired plant
■Expected in service in 2011
■Project is 75% complete 2
Dan River Combined
Cycle Plant
North Carolina
■620 MW combined-cycle
gas-fired plant
■Expected in service in 2012
■Project is in early stages of
construction 2
1 Project costs include direct capital and Allowance for Funds Used During
Construction (AFUDC)
2 Approximate as of December 31, 2010
Edwardsport Cliffside Buck Dan River
LETTER TO STAKEHOLDERS (CONTINUED)
DUKE ENERGY CORPORATION / 2010 ANNUAL REPORT
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