While the Pigeon River Trust Fund isn’t threatened in the short term, the lucrative water quality funding stream isn’t a sure bet forever.
The annual payment of $290,000 ponied up by Progress Energy — and soon by Duke post merger — will eventually run out.
I don’t know Duke Energy CEO James Rogers and don’t have anything against him. But it’s not very hard not to imagine he and the giant utility he runs as the symbolic poster children for much of the discontent brewing in this country right now.
In a recent series of public hearings across North Carolina (including one in Franklin and one in Marion) about Duke Energy’s request for a rate hike, the company’s profits and the pay to its top executives have been mentioned by working-class folks who don’t want to see a 17 percent hike in their power bill. Duke has asked the state Utilities Commission to approve the increase, which would take effect in February 2012 if approved.
According to corporate filings and several news stories, Rogers earned $8.8 million in salary last year and received stock work about $1.35 million. Several other top Duke executives made millions. Also shown by recent corporate filings was a profit rate of 12.5 percent of earnings. Duke had an operating margin of 19.1 percent, which is a pretty good lick in this era. Most of those small businesses who will feel this rate hike would be ecstatic about those profits and that operating margin.
Rogers’ salary and compensation are at a level that puts him in elite company. His compensation is 200 times the salary of someone who makes $50,000 a year. The disparity is jaw dropping.
In addition to Rogers’ huge salary, Duke spent $1.73 million lobbying the federal government in the second quarter of this year. Multiply that out and one would guess that Duke spends somewhere close to $7 million a year trying to influence the votes of the men and woman who are going to make decisions about pollution controls, nuclear energy safeguards, etc.
According to Democracy North Carolina, a nonpartisan watchdog group, 115 of the 170 state legislators elected in 2010 got a donation from either Duke or Progress Energy. The PACs of Progress Energy and Duke Energy gave $540,000 to General Assembly candidates in the 2010 election alone. That was more than any other PAC. The two companies are on their way toward a merger that will likely be approved.
And here’s a kicker that might raise some hackles. According to Democracy NC, “The companies are also lobbying the N.C. legislature for an unusual law that would allow them to raise rates automatically to recover the millions spent on developing and building new nuclear or other power plants, even if the construction project is ultimately abandoned. The proposal would make ratepayers, rather than investors, bear the financial risk of expansion operations.”
This is not meant as an anti Duke diatribe. Duke Energy is a popular corporate citizen that gives some of its profits back to the communities it serves. Its executives and employees take part in hundreds of community service organization throughout North Carolina.
But the timing of this request is what is so galling. Duke is reaping huge profits, pays its executives exorbitant salaries, and spend millions lobbying lawmakers who make the rules it has to follow, while at the same it wants the poor, the elderly, the unemployed and struggling small businesses to pay more for power.
The reports about of income disparity and poverty are raining down on us like a tropical storm: largest income disparity in U.S. history between top 1 percent and everyone else; elderly rate of poverty highest it has ever been; income gap between young adults and their parents at highest level ever; student debt at record levels; and more and more.
N.C. Attorney General Roy Cooper is lobbying the state Utilities Commission to deny the request. The N.C. Public Staff, which represents the public in these rate hike requests, wants the proposed increase cut by almost two-thirds. Obviously, the opinion of the state’s citizens has been overwhelmingly against the rate hike.
Duke wants more than just the rate increase and the ability to let ratepayers take the risk for its expansion. It also wants the Utilities Commission to up its allowable profit margin to 11.5 percent, up from the 10.7 it is now allowed. The Public Staff recommended a return of 9.25 percent. Most U.S. utilities have been allowed returns of 10 to 10.5 percent in the past five years, according to the industry trade group Edison Electric Institute.
Taken as a package, this sounds like a big corporation trying to stick it to its customers during an economic recession. Duke’s political clout, however, means it will in all likelihood get at least part of the increase. That’s my bet. Any takers?
Economic times are simply too hard, and Duke Energy is being too greedy for the state utilities commission to allow the company to hike its rates, many of the speakers taking advantage of a public hearing in Franklin said last week.
Some 30 speakers used the microphone at the Oct. 26 hearing, which attracted about 100 people from North Carolina’s westernmost counties. A similar hearing drew an overflow crowd Oct. 11 in Marion, the only other forum focused on the hike that was held in Western North Carolina.
Duke Energy wants to raise residential rates 17.4 percent and, on average, raise commercial rates by 15 percent. The increase, which would take effect in February, would add about $19 a month to the typical residential customer’s bill of about $97.
Three-fourths of the increase would help pay for $4.8 billion for building new power plants and for pollution-control equipment to help the environment.
Duke District Manager Fred Alexander told the commission the increase in rates is necessary to help Duke continue providing the “vital service” of electricity.
“I’m here tonight appealing to you on the behalf of the clients that we have at Second Mile Ministry,” said Hazel Finley. “These are mainly elderly people who are on a fixed income,” and underemployed or unemployed people “who have exhausted” their benefits. “I see no reason for Duke to get (an increase) on the backs of these people who are, so desperately, trying to make it one day at a time here in Macon County,” she said.
Many speakers told the commission members of their anger at Duke’s seeking more customer dollars when, in 2010, the company reportedly earned $1.3 billion and paid its chief executive $6.9 million.
With those sorts of profits, “then why does Duke believe that they need to take any more of my money?” Carl Iobst of Jackson County queried the commission.
A rate hike, said Bob Harold of Stanley Furniture in Robbinsville, could possibly take the furniture manufacture under and put up to 420 people out of work. Stanley Furniture is Graham County’s largest employer.
Stanley Furniture pays Duke $1. 2 million under the company’s current rates for electricity.
“It will put us in a very noncompetitive situation where it will increase our electricity bill per year $180,000,” Harold said. “I feel like the rate increase is too exorbitant.”
Other businessmen attempted a softer approach, with Nantahala Outdoor Center’s John Burton in the particularly unenviable position of trying to urge caution about raising rates while not criticizing the very entity that controls the water flow whitewater rafters, and the company, depend upon.
“I’m counting on you guys to vet the proposal,” Burton told the commission. “To make sure … that it’s reasonable. While the rate hike is painful, some of it is necessary to keep doing what they do.”
F.P. Bodenheimer, a Franklin businessman, spoke more directly in Duke’s favor, noting the importance of a good energy supply to power manufacturing machines. In the older days, when Nantahala Power and Light delivered the energy to his lumber-based business, reliability was questionable and the power sometimes failed, Bodenheimer said.
That costs businesses time and money that simply aren’t expendable, he said.
“But, we do have one opportunity that the homeowner does not have,” Bodenheimer said. “We can pass on some of the cost to customers who buy our product … possibly. But for the homeowner, there’s no place for them to pass it.”
Ken Brown of Jackson County spoke both as a Duke customer and as a representative of the environmental group Western North Carolina Alliance. Brown noted the lack of competition facing Duke here in the Southeast and linked that to the company’s reluctance, in his view, to offer competitive rates. The energy company’s grasp might just get tighter in the days to come if a merger proposal with Progress Energy is approved.
“In North Carolina, Duke Energy and Progress Energy are conspiring to monopolize electric generation by asking the N.C. Utilities Commission to approve a merger that will squash competition in North Carolina,” Brown told commissioners, a sentiment echoed by Swain County resident Joe Deddo.
Brown also spoke to cost overruns at the controversial Rutherford County-based Cliffside plant being passed on to North Carolina customers, for electricity to leave the state and serve customers in South Carolina.
This, Brown said, would “unnecessarily burden business, industrial, municipal and residential ratepayers with a third rate increase in two years to pay for an outmoded facility.”
Other speakers also had strong environmental concerns and said they wanted to see Duke turn toward more earth-friendly sources of energy.
“I want cleaner energy,” Scott Burns of Franklin told the commission before opposing the rate hike as “outrageous” on Duke’s part to even request.
The bell has just rung on the next round in the fight between Duke Energy and the Swain County residents living under its newest transmission lines and gargantuan metal towers.
Last week, the North Carolina Public Utilities Commission held a public hearing in Swain County to hear arguments from both sides on whether the power company was unreasonable when they erected 141-foot steel towers where once there were only 60-foot wooden poles.
“I’m sitting outside now, drinking my coffee, looking at the first tower that is about 100 feet from my front deck,” said Jennifer Simon, who is surrounded by the towers that dwarf her mobile home. “Four or five more towers are in my viewshed and the base of the closest tower is actually wider than my home.”
Simon is part of a grassroots group called Citizens to Protect Kituwah Valley and Swain County, and they’ve been protesting the line and it’s companion substation since work started on them more than a year ago.
The group started out charging that Duke needed a permit from the utilities commission, along with public hearings, before proceeding with the new lines.
Duke claimed a permit wasn’t necessary, deeming the project a mere upgrade to existing lines, but residents called it a brand new project, since it put up 92 new towers, miles of new cable and upped the voltage running through them from 66 kv to 161 kv.
The citizens lost on that count. The Public Utilities Commission ruled in April that Duke was within its rights to change the line, moving within land they already had.
But now the issue is back, and the citizens — having conceded one loss — alleged that even if the power giant could put up the lines, they way they did it was out of line.
“I think generally their behavior in the process of doing this has been unreasonable,” said Paul Wolf. Wolf lives under a nest of towers. He can see 10, he says, from his front porch.
Wolf takes issue with where the towers were built, how the Duke’s contractors behaved and how the towers showed up in the first place.
His central complaint is against Duke’s contractors, who he said used his land as a bathroom.
“I’m personally outraged that these guys came and have been openly defecating on my land because they didn’t even bother to bring port-a-potties with them,” said Wolf.
That, plus the location of one tower next to his children’s play area and the fact that he said he was never notified — he came home to his neighborhood one afternoon to find towers going up before hearing the news from Duke — said Wolf, add up to the textbook definition of unreasonable.
The energy company, however, counters that it’s followed strict procedures for the project to make sure everything was above board.
“We had folks that actually made phone calls and personal visits and actually reached out to make contact to everyone who was along that route,” said Jason Walls, a spokesperson from Duke’s Charlotte office. As far as any contractor misdeeds, Walls said Duke dealt with them as they arose.
The dispute over the line and its components has been ongoing for nearly 16 months, starting with a protest from both the citizens group and the Eastern Band of Cherokee Indians over the location of a substation. Duke was planning to put it at a site overlooking the Kituwah mound, a location that’s central to Cherokee history and spirituality.
After some negotiating — and after the Swain County commissioners stepped in to block the move — the substation was moved elsewhere.
An official decision in Tuesday’s hearing probably won’t come down until the end of the year, said Sam Watson, general counsel for the Public Utilities Commission.
When the commission does, eventually, find for one side or the other, it’s not cut-and-dry what the result will be.
“The commission has a broad range of alternatives available to it, ranging from the relief requested by the complainants to nothing, as Duke has suggested is appropriate,” said Watson.
That means that Duke could, on one extreme, be forced to take down the entire line or move or modify towers or other equipment. Conversely, no action would force the citizens to live with the decisions Duke has made.
Either side can appeal the decision to the N.C. Court of Appeals.
Jennifer Simon said she’s concerned that the three-hour hearing was nothing but a formality.
“I don’t know that there’s any options on the table,” said Simon. “I think that this hearing was truly just an exercise of formality. I don’t know that we’re really being presented with any options.”
One option, however, that affected homeowners do have before them is civil court.
Throughout these proceedings, Duke has maintained that that would be the right venue for a large chunk of the complaints against them. The Public Utilities Commission can’t make decisions on financial losses. So for those, like Wolf and Simon, who claim their property has been irreparably devalued by the 13-story towers, the civil court is where they need to go.
And several in the citizens group aren’t ruling it out, though they still hold out hope that the commission will get the towers off their land before they have to take it that far.
But beyond the questions of financial damage and reasonableness, some are also questioning the necessity of such massive quantities of power in a sparsely populated rural area. Duke’s service area stops at the state line, for now, so the power pulsing through the new line will serve Swain County, Cherokee and parts of Franklin.
Walls said that this upgrade is necessary to keep steady power flowing to the region, particularly to Cherokee, where a sizeable casino expansion is sure to draw a much larger electrical load.
“We truly believe that upgrading this line and doing so in the way that we are will serve this region with reliable electricity for years and decades to come,” said Walls.
Paul Wolf and his neighbors, though, still contend that, though the lines might be necessary, Duke’s behavior wasn’t. And vital or not, they’d like it moved somewhere else.
“The first day they installed the tower above my house I stopped and broke out laughing because I didn’t want to cry. It was just so hideous,” said Wolf. “Even if they have the right to do all this, did they treat me rightly and fairly as a landowner? No.”
If you read the information Duke Energy is spreading throughout the news media in its vast public relations campaign, you’d be led to believe the request for a 15 percent rate increase (17 percent for residential ratepayers) is a result of meeting new environmental regulations, especially in building the new “state-of-the-art” coal unit at Cliffside.
This is a distortion of reality that should be understood by all public officials, news outlets and members of the rate-paying public. I commend the Macon County Commissioners and the Franklin Board of Alderman for being the first public officials to take a stand against this round of rate hikes. Hopefully others will follow in short order.
This is the second of three rate hikes Duke Energy will be requesting for its expansion at Cliffside. For those who have not followed this issue closely, the energy from this plant is not intended to meet the energy needs of North Carolinians, where demand has been steadily declining due to efficiency and conservation measures in the past decade.
Rather, the Cliffside project is part of Duke Energy’s plan for expansion into new competing territories in other states. For example, in 2009 Duke expanded by signing a contract with five electric cooperatives in South Carolina to provide up to 1,500 megawatts of new capacity. That’s more than twice the capacity of the new unit at Cliffside, indicating an already existing large surplus of generating capacity for Duke Energy.
In addition, the new Cliffside hardly represents “state-of-the-art” coal technology, not even by the industry’s own standards. So-called “clean coal” technology was previously defined by the industry as Integrated Gasification Combined Cycle (IGCC) technology in which clean-burning methane gas is the ultimate fuel extracted from the coal prior to burning. IGCC units would in addition, supposedly, allow for the capture and sequestration of CO2 or greenhouse gases.
Duke Energy chose not to build an IGCC plant at Cliffside (perhaps because the practicality did not live up to the industry hype), but instead is constructing an old-fashioned, dirty, pulverized coal-burning power plant that will release into our air sulfur-dioxide, nitrogen oxide, mercury, hydrogen chloride, cadmium, barium, dioxins and dozens of other hazardous and toxic chemicals. While it’s true that the new plant will reduce the output of most of these pollutants from what older plants produced without emission controls, the poisons of Cliffside’s operation will continue to add to the buildup of toxins already permeating our environment, including and especially mercury. The new unit at Cliffside will do nothing to reduce CO2 emissions, and in fact will double its previous output of greenhouse gases to approximately 6 million tons per year, or as much as would be produced by a million automobiles.
The continued use of coal derived from mountaintop removal mining is devastating a huge geographical region in Appalachia, its people, its history and its water supply. And the toxic coal ash pile from Cliffside’s operation will build as a catastrophe in waiting.
There is nothing responsible about the Cliffside project and ratepayers in North Carolina should not finance this project through outrageously high rate increases. The state should instead be pursuing policies that will result in further reductions in energy consumption and the transformation to clean, safe, less expensive renewable technologies as quickly as possible.
A proposal by Duke Energy to hike electricity rates by 17 percent isn’t sitting well with many of the company’s customers in this region, who question why the power giant should be seeking any increase — much less such a large one — during these times of economic hardship.
Because Duke is a public utility, the final say on whether the proposed residential rate increase goes through rests with the N.C. Utilities Commission. If granted, Duke Energy would see a jump in revenue of about $646 million. Customers would see a corresponding increase of about $19 a month or more, based on a 1,000 kilowatt-per-month usage rate.
The company filed a rate case with the Utilities Commission late last week. If approved, the new rates would start around next February.
The rate request also seeks a 14 percent increase for industrial and commercial customers. The average of rate increases for all types of customers is 15 percent, Duke said.
“They can just go electrocute themselves as far as I’m concerned,” a miffed Angela McGregor, of Bryson City, said. “I would like a cost breakdown on exactly what they plan to spend it on.”
In a news release, Duke said it needs the money “mainly to recover expenses that have already been made to comply with state and federal laws and replacement of aging infrastructure necessary to meet customer needs.”
In an email sent generically to “dear southwestern NC community leader,” Duke District Manager Fred Alexander, based in Macon County, noted “no one likes rate increases. But they’re necessary to ensure the availability of affordable, reliable and clean electricity today, and for decades to come.”
That explanation hasn’t deterred leaders in Franklin from passing a resolution opposing the rate increase, with Alderman Bob Scott leading the charge.
“Unfortunately, this is but another example of large business taking liberty with corporate welfare as opposed to those who really need financial help,” he wrote fellow town leaders in an email sent last week. “This rate increase will severely hurt the elderly, the poor and those trying to live on fixed incomes whose incomes have been slammed by corporations that caused the financial mess the nation is in.”
The Macon County Board of Commissioners will likely follow suit, Commissioner Ronnie Beale said. The matter was discussed at a county meeting last week, and appeared to have the unanimous support of the five-member board.
Franklin, which once headquartered for the region the Duke-absorbed Nantahala Power and Light Co., has surfaced in the recent past as an area of heartburn for the power giant.
The last time Duke sought a rate increase, in late 2009, the company faced vocal and sustained opposition at a public hearing held by the utility commission in Franklin.
At the time, Duke claimed the then sought-after 12.6 percent hike was needed to pay for upgrades to power plants and infrastructure across its system, including construction of a controversial new coal plant near Marion. Duke also said the rate hike would help maintain its credit rating.
The Utilities Commission allowed Duke only a 7 percent increase. That increase saw the average customer using 1,000-kilowatt hours per month pay $7.30 more each month.
“They are not giving us anything better for the increases,” said Randy Gogolin of Sylva, who makes his living as a nurseryman through his business, the Garden of Weeden.
Gogolin said that he and his wife would like to go completely power-company free by getting off the grid and becoming fully self-sustainable. This was something they dreamed of doing some 20 years ago after moving here, Gogolin said, “but life hit” and there were kids to be raised.
A rate increase, he said, only provides additional impetus for such a move.
Becca Nestler, who with her husband, Stephen Beltram, own and operate Balsam Gardens in Jackson County, said paying more for electricity would pose a true financial hardship on the farm. The couple, which raises and sells broiler chickens and vegetables, is currently using a walk-in cooler, three refrigerators, an upright cooler and a chest cooler, Nestler said.
“That would be awful,” she said of the proposed rate increase. “It would mean more expense for our farm. It’s hard enough as it is.”
Dave Nestler, her brother, is a woodworker in Sylva who relies some on electric-powered tools. He said while his business could more easily absorb a rate increase than his sister’s farm, he isn’t happy about doling out more dollars unless it truly helped produce cleaner energy.
“But, it’s not,” Nestler said. “It’s just going to be more profit for Duke.”
Chris Dole, a trained chef who currently works in marketing in Sylva, like David Nestler, said he wouldn’t mind paying more if the tradeoff was cleaner energy.
“I just think (a flat increase) is wrong, though,” Dole said.
And Duke is indeed being duplicitous, according to longtime foe Avram Friedman, executive director of the activist clean-air group, the Canary Coalition. Friedman said the rate increase would help pay for its expansion of the controversial Cliffside Coal Plant. Friedman said Duke plans to sell electricity generated at Cliffside across the grid in other states, yet is trying to pay for the new coal plant on the backs of North Carolinians.
Duke Energy has received a new 30-year permit to operate its five hydroelectric dams in Jackson County, which could pave the way for new economic and recreational opportunities along the Tuckasegee River.
Kayaking for several days a year on the upper reaches, for instance, with the power company agreeing to open up Lake Glenville Dam for water releases into the old streambed. New hiking on a future trail below Lake Glenville Dam down to the Paradise Falls area. Nine new river-access areas — including a portage — around Cullowhee Dam near Western Carolina University.
But don’t get too excited. The work could take years to complete, easily up to a decade or more.
“There’s tremendous work involved with the implementation of the license,” said Mark Singleton, a member of the stakeholder groups and executive director of American Whitewater, a national nonprofit headquartered in Sylva that promotes river conservation, access and safety.
Duke District Manager Fred Alexander also indicated the work isn’t over.
“We’re pleased to be at this stage, not the end, but the beginning of the end,” he said.
Duke must get new permits from the Federal Energy Regulatory Commission every 30 or so years to operate the dams. The process, known as relicensing, spells out what mitigation Duke must conduct to offset the environmental impacts of the hydro network.
Debate raged for nearly 10 years over how much Duke owes Jackson County in exchange for harnessing the Tuckasegee River with numerous dams. And Ken Westmoreland, the former county manager who spearheaded the county’s long fight against Duke, said Jackson has gotten the short end of the stick.
“We felt Jackson County’s citizens were being shortchanged in the long run,” Westmoreland said. “We knew in comparable relicensing across the country, other jurisdictions received substantially more than Duke has offered, which is basically a pittance.”
Westmoreland led the county into a protracted and costly legal fight in hopes of exacting more from Duke. Since the centerpiece of Duke’s mitigation was tearing down the Dillsboro dam, that was what the fight centered on, but saving the dam wasn’t the county’s primary objective, Westmoreland said.
“It was trying to find a method to get Duke to ante up considerably more in funds over the long haul for multiple purposes — recreation, stream-bank restoration and other conservation endeavors the county was interested in,” Westmoreland said.
Duke prevailed in the end when Jackson gave up on its battle, and within weeks of that decision the power company took out the dam. Restoring free flowing river will help threatened aquatic species, improve river habitat and set the stage for a river shore park.
Enhanced recreation opportunities along the Tuckasegee could help the county’s economic big picture, too.
“Quality recreation opportunities drive economic opportunities,” Singleton said.
For instance, additional put-ins will cater more to the increasing driftboat fishing traffic being seen on sections of the Tuckasegee.
Re-licensing for dams on the Nantahala River area — these were for the Tuckasegee River watershed — are expected soon.
By Quintin Ellison & Becky Johnson
• 1964: A court case results in hydro projects in the U.S. being placed under the jurisdiction of the Federal Energy Regulatory Commission.
• 1980-1981: The original 25-year licenses on the hydroelectric projects on the Tuckasegee and Nantahala rivers are issued to Nantahala Power and Light.
• 1988: Duke Energy purchases Nantahala Power and Light from Alcoa, a 1,729-square-mile service area, with 14 dams on five rivers serving 11 hydroelectric generating plants.
• 1999: Duke starts a public involvement process to develop a mitigation package as part of the next relicensing process. Two stakeholder teams were formed for the Tuckasegee and Nantahala, comprised of environmentalists, paddlers, fishermen and local government leaders.
• 2003: Stakeholders agreed, although not unanimously, to a mitigation package. The centerpiece is removing the Dillsboro Dam. Jackson County is among the parties who dissent. Macon County, the town of Franklin, and Dillsboro express dissatisfaction as well.
• 2004: Jackson County begins a legal fight against Duke, appealing various aspects of the relicensing at every step of the way.
• 2007: FERC sides with Duke in saying that removing the Dillsboro Dam, built in 1927, will suffice as mitigation by restoring a section of free-flowing river, reconnecting habitat and providing river recreation.
• January 2010: Jackson County concedes it has lost the battle against Duke.
• February 2010: The dam is removed, clearing the way for new licenses to be approved and promised mitigation to get under way.
• May 2011: FERC formally approves re-licensing agreements for Duke’s hydro projects on the Tuckasegee River.
New protocols for the unlikely event that one of Duke Energy’s dams shows a sign of weakness could speed evacuation of residents downstream.
The Federal Energy Regulatory Commission wants power companies such as Duke Energy to cut the amount of time between workers suspecting a problem with a dam and the evacuation of anyone who might be at risk, a job carried out by local emergency responders.
An analysis completed this past year indicates “we’re in pretty good shape” on detecting dam-integrity issues, said Brad Keaton, chief dam safety engineer for Charlotte-based Duke Energy, during an annual meeting of regional emergency response workers and Duke employees. Sixty-five attended last week’s meeting, held at Western Carolina University.
Verification of a problem is where Duke can shave some additional time off, Keaton said.
An on-call technician will be dispatched, as always, to evaluate the situation firsthand. Duke is adding technology — in this case, on-site cameras — so that a dam failure can be declared more quickly.
Anyone working on the dams for the company is empowered to make the call without going through the chain of command, no matter how low on the corporate ladder their job might be, the engineer said. This is not the case with most agencies, including Fontana Dam in Swain and Graham counties, a federal Tennessee Valley Authority project.
“In the very unlikely event of a dam failure our responsibility in hydro (as in hydroelectric dams) is for the safety of downstream residents,” said Carol S. Goolsby, vice president of Duke’s hydro and renewables generation. “We were questioned (by federal authorities) about whether this responsibility is really and truly at the lowest level of workers in the company … they are well-trained, they’re very experienced, they live here, and they know the structures.”
These workers, Goolsby added, recognize any changes occurring to a dam because “they know what they are used to seeing.”
Keaton said Duke Energy recognizes there is a certain risk involved in empowering its employees — an unnecessary evacuation is unlikely to be easily overlooked in a community — but “this is a risk we are willing to take.”
Additionally, Keaton told those at the meeting that a siren will be added to at least one Western North Carolina dam: the dam on Nantahala Lake at the confluence of Queens Creek and the Nantahala River in northwestern Macon County. A cluster of houses lies directly below the remote location, and a siren would warn the residents there more quickly if there were any danger.
Duke Energy has 12 dams in the Nantahala Area, the 1,729-square-mile part of Western North Carolina once served by Nantahala Power and Light. Nantahala Power and Light never experienced a dam failure; Duke Energy also has not had a dam failure since its beginnings in 1904 as a hydroelectric generating company, according to Fred Alexander, district manager for Duke.
The company and area emergency managers meet every year, he said, to ensure coordination and to know one another personally.
After nearly eight months of wrangling with the Eastern Band of Cherokee Indians, Swain County leaders and a vocal citizens group, Duke Energy agreed to relocate an electrical substation from a controversial location — one that would loom over a Cherokee spiritual site and mar views of a rural farming valley.
Despite putting money into the site work and grading, Duke announced this week it would move from the location.
While Duke and the tribe have hailed the move as a sign of cooperation between the two entities, a citizens group fighting the substation and a major upgrade to electrical lines associated with the project stopped short of calling it a victory.
In November 2009, Duke Energy began work on a knoll in the picturesque valley located between Ela and Bryson City as the site of the new substation, which incidentally overlooked Kituwah, a sacred Cherokee site that historically served as the tribe’s political and spiritual center.
Swain County leaders imposed a moratorium on new utility projects in March of this year, partly due to the public outcry and partly because the county was miffed Duke had started grading the site without informing the county of its plans.
Along the way, citizens filed a complaint before the North Carolina Utilities Commission while lengthy negotiations played out between Duke and the tribe, which had hinted at the possibility of legal action.
Throughout those negotiations, Duke maintained that one of the principal reasons for the line upgrade and, consequently, the substation was the need to provide more power to Harrah’s Cherokee Casino, which is in the midst of a $600 million expansion project.
Duke’s announcement that it will move the substation to one of two alternative sites by the end of the year solves the point of conflict with the tribe over the cultural impact on Kituwah.
Michell Hicks, principal chief of the Eastern Band of Cherokee Indians, used Duke’s announcement as an opportunity to reinforce the tribe’s intent to vigorously protect Cherokee cultural sites.
“It is my honor and responsibility to protect our land base and our Cherokee culture,” Hicks said in a release prepared by Duke and the tribe. “The land of Kituwah, our mother town, is central to our identity as a tribal nation and I will do everything in my power to ensure this sacred site is protected.”
But Hicks also reinforced his appreciation of Duke’s efforts to work with the tribe regarding the issue.
“I appreciate Duke Energy’s understanding of these sensitive issues and their hard work to identify alternate locations for the electrical station,” Hicks said. “We are pleased that through the cooperation with Duke Energy, we will continue to have reliable electricity and the landscape around Kituwah will be protected.”
Duke Energy has offered Swain County $400,000 for a 13-acre site in the county industrial park. In addition to the $400,000 price tag, Duke Energy would give the county $1.1 million to help defray the cost of relocating the county IT building, which has been in the development stages for nearly a decade.
Swain County commissioners voted unanimously on Monday to grant Duke a six-month property option on the site for $15,000.
Duke has another site under consideration as well in the Sheppard’s Creek area. Duke announced that it would decide between two alternative sites by the end of the year.
Should Duke move forward with the purchase of the site in the industrial park, the company would have made up for its lack of communication with the Swain County board that led to the imposition of a county-wide moratorium on utility projects.
With the county and the tribe appeased, Duke still has the citizens group to deal with, however.
Katy Travitz, spokesperson for Citizens to Protect Kituwah Valley, said her group will continue to pursue a complaint before the North Carolina Utilities Commission that alleges Duke Energy broke the law by not filing the proper paperwork for their line upgrades.
“I don’t see it as a victory,” Travitz said. “I think they made a smart decision, and there’s still work for them to do.”
The new substation is part of a massive upgrade of Duke’s West Mill transmission line, which serves parts of Jackson, Swain and Macon counties. The upgrade entails replacing the existing 66kv line mounted on wooden poles with a 161kv line mounted on 120-foot steel towers and constructing new substation facilities to accommodate the increased amount of power.
A complaint filed by Citizens to Protect Kituwah Valley is still playing out before the state utility commission. It essentially alleges that Duke Energy intentionally misrepresented its project as an upgrade when it is actually a new infrastructure project that should have triggered a long list of requirements including public hearings.
“We believe Duke broke the law, because they didn’t file for the certificate to do the work,” Travitz said. “Moving the substation doesn’t satisfy the complaint, and we intend to stay the course.”
The citizens group represents both enrolled tribal members with a cultural interest in protecting Kituwah, as well as Swain County residents whose properties are directly affected by the line upgrade.
But other citizens have been a part of the discussion, too. Nate Darnell, a farmer in Swain County who appealed to the board of commissioners to implement the moratorium, said moving the substation from the site near Kituwah to an alternative location over the hill in Shepard’s Creek doesn’t solve the problem that drew him into the debate.
Darnell saw the issue from the perspective of the impact it had on the environment and the agri-tourism businesses in the valley.
“I like the idea that they’re looking at the industrial park,” Darnell said. “You got to have this stuff and if you’re going to have it, you need to localize it so you can regulate it more easily and consolidate the impact it’s going to make.”
If there is a clear winner in the scenario, it’s the Eastern Band, which preserved its cultural legacy without jeopardizing the supply of power to its growing casino complex.
The tribe’s historic preservation officer, Russ Townsend, said Duke’s willingness to negotiate over a cultural viewshed sets an important precedent.
“I hope it’s an example to other agencies that we deal with that our concerns are legitimate and there are often alternatives to finish a project without undermining our cultural concerns,” Townsend said.
Townsend said the concept of viewscapes and cultural landscapes have been a part of regulatory discussions dealing with the way federal agencies approach cultural sites like the Gettysburg battlefield, but they’ve never been a part of discussions with private companies.
“I think if there’s a precedent set it’s that there wasn’t a federal agency that made Duke come to the table,” Townsend said.
Duke’s narrative of the events in the release announcing the company’s intent to move the substation acknowledges the cultural issues raised by the tribe, but it also defends the line upgrade as a necessary attempt to meet the needs of its customers.
“Initially, a new electric tie station was planned at a site within view from Kituwah, an ancient and sacred gathering place of the Cherokee people that is adjacent to the Tuckaseegee River, east of Bryson City, N.C.,” the company’s statement read. “After hearing concerns from the Cherokee people about the initial site, the company worked for several months with tribal and other community leaders to identity alternate locations.”
Brett Carter, president of Duke Energy Carolinas, stated the company’s position succinctly.
“Our customers expect and rely on Duke Energy to provide the electricity that powers their homes and businesses,” said Carter. “Finding a new location for this important infrastructure allows us to deliver on our commitment to customers, without impacting the landscape around Kituwah.”
Duke Energy wants an option to buy land at the Swain County Industrial Park with the intention of using it as the alternate site for an electrical substation, which was originally slated for the Ela area.
According to Jason Walls, Duke’s spokesperson, the company has offered to pay the county $15,000 to reserve an option to buy the 13-acre site of the proposed Swain County IT building at a price of $400,000. The option would give Duke six months to consider whether to follow through with the purchase.
In addition to the $400,000 price tag, Duke Energy would give the county $1.1 million in community development grant money to help with the cost of relocating the IT building, which has been in the development stages for nearly a decade.
“It’s part of our commitment to continue to work towards an alternate site,” Walls said. “We haven’t settled on an alternate site, but we continue to examine a few sites very closely.”
Duke has been in negotiations with the Eastern Band of Cherokee Indians and Swain County over relocating the substation after both entities voiced their disapproval of the current site.
The substation project is part of a massive upgrade of Duke’s West Mill transmission line, which serves parts of Jackson, Swain and Macon counties. The upgrade entails replacing the existing 66kv line mounted on wooden poles with a 161kv line mounted on 120-foot steel towers and constructing new substation facilities to accommodate the increased amount of power.
Duke began work on a substation on a hill near the Kituwah mound in the picturesque valley of Ela between Cherokee and Bryson City in November 2009, but this March, Swain County imposed a moratorium that halted the project after both the EBCI and a citizens group opposed it. Protests by citizens are also playing out before the state utility commission.
Should Duke follow through with the purchase of the land and the relocation of the substation, it would signal a monumental compromise between the energy company, the tribe and the county over a sensitive cultural preservation issue.