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Duke Energy Corporation
Power to the People

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By BuildMWell
August 8, 2003

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This morning, I watched a really great television program on the history channel. Did any of you see it? If not, look for it again, they rerun these things on a fairly regular basis.

I thought the show was really a very good overview of the history of power generation here in America since the early days when the only game in town was hydroelectric generation. The program went from hydropower to coal fired steam and then to nuclear. They finally wrapped it up with a segment on combined cycle oil/gas turbines.

I missed some of the thing so maybe they touched on my one complaint...but I seriously doubt it. They seemed to be selling the idea that the combined cycle was the way to go for the future and I know this is just plain wrong. However, the power company they used for their camera shots was in Georgia and the Georgia company had to put their spin on the story since they have a vested interest in making gas fired turbines look like a sure winner...after all, they have tons of the damned things running!

In one shot, they are interviewing the Chief Operator of one of the gas-fired plants and the plant was chugging away in the background. There, behind the speaker, you see at least eight or ten huge gas turbine units working away and the guy is telling the camera how much he likes this energy source since the smoke stacks do not attract attention! The units are low to the ground and the public does not find them as objectionable as the coal or nuclear-fired units. All true but crappy reasons for wasting the utility's cash! Politically correct but stupid!

The announcer then cuts away and tells us that the plant we were observing generates 600 MW of energy using eight combined cycle turbines, a fraction of what the smallest pulverized coal fired steam plants can produce. The point he was making was that the combined cycle units have very limited ability to make the kinds of power we really need in America. But, to the untrained ear, that would still be lost because the public has no idea what is involved and this program never really explained it. I began to wish I was the producer of the show...I had some things to tell the public that they need to hear about power generation.

In their defense, they did show several pulverized coal plants and explained the immense power available by blowing the flour-like consistency coal into the boiler. That, my friends, is the way to make electricity! Well, if you do not have nuclear power at your disposal like Duke does. They made that point too, but not as firmly as I would have preferred.

The thing that I got from the show that enthused me the most was the overall story. They talked about the three types of loads that power companies deal with. The most important is the base load. This is the load they see 24 hours a day, 365 days per year. It varies with the seasons somewhat, but it is the meat and potatoes load. IT is the load that exists 100% of the time.

The variable load is what you see during the day. They explained that at 8:00 AM, the load is close to the base load. But, as the day moves along, the load increases due to Air Conditioning, more people using tools/appliances, etc. Thus, the variable load is supplied by the ability of the power plant to ramp up the equipment to satisfy the load. But, the base load equipment generates the variable load also...it just uses more fuel and generates more steam. The variable load peaks in the afternoon at about 3:00 PM.

The peak load was the third type of load they talked about. This is where the "smart" power companies use the combined cycle units. Instead of building huge, capital intensive, expensive pulverized coal or nuclear plants, the smarter utilities build these gas fired units to operate only in peaking conditions. Late in the day...say from 2:00 PM until 4:00 PM. During those two hours each day, these units can be fired up to generate the power needed for the peak load and they can then be shut back down several hours later when the demand goes back to the base load. That is why they were always called "peaking units" in the old days. The "old days" meaning before the stupid power companies fell for the politically correct demand of refusing to allow new coal or nuclear plants to be constructed. Plus, the capital cost of new nuclear plants has become prohibitive through politically correct legislation that adds cost but no benefit. But, that is another story.

The show on the History Channel made the point clearly that nuclear and coal need to supply the larger demand. What they failed to say was that few power companies can actually do that because of their past failure to build adequate nuclear and coal capacity. But, I guess they had no desire to embarrass anyone with the truth. That Georgia utility was running their combined cycle units all the damned time! They weren't cycling the units to handle the peak load. And, that is where I got really excited...I was beside myself. I was yelling at the screen, "Go see Duke Power! Listen to what they do!"

The problem with using the combined cycle unit all the time, or even twelve or more hours per day, it that they wear out! The turbines are huge airplane engines and they have limited "hours" of operation before they have to be completely rebuilt at huge cost to the utility. They are designed like an airplane...crank it up, and go! They were never meant to be run all the time because the costs go through the roof...and that was never told in the History Channel story.

For, you see, Duke does the job perfectly! They base load with Nuclear. The nuclear plants run 24 hours a day, 365 days per year making one cent per KWH power. That is what Duke does. That is precisely what should be done.

Duke runs their pulverized coal plants 24 hours per day, 365 days per year making two cent per KWH power and the coal plants are used for the variable load. If, the variable load is not too great, Duke never fires up the combined cycle plants...they cost about 5 to 6 cents per KWHr to make power! Do you see why I was so excited? Duke does it right and almost no one else even comes close!

There was the History Channel telling the story in great detail, but they failed to have the right people telling the right story. The Georgia Power plant was doing the stupid thing and running their combined cycle units all the time...because they have insufficient nuclear capability and they have insufficient pulverized coal capability. They failed to do the correct things years ago and they are suffering for it today. Duke did it right in the past and today Duke has it exactly right. And that is the story I want the World to know.

Now, what about those combined cycle plants Duke was building out West? Does it make sense to you now? They were more than willing to build those (cheap capital cost), inefficient units (fuel cost wise) out there to help solve the power shortage. They would sell that 5 to 6 cent natural gas fueled power to California, but they were not going to sell off their base load nor their variable load! That was for making money day in and day out. That was for making money the good old-fashioned way...with nuclear and pulverized coal.

California screwed themselves years ago...they shunned nuclear and they shunned coal. They are going to suffer for that silliness forever...or until they tell some environmental nut cases to shove off. California is stuck with making power with Natural gas or fuel oil forever...at 5 to 6 cents per Kilowatt because of their stupidity and political correctness. Add to that about 2 cents for distribution and another 4 cents for overhead and profit and you have an ongoing cost of 11 to 12 cents per kilowatt hour...forever! That plant in Georgia was not a whole lot better. But, at least they have some pulverized coal plants for a large portion of their base load. They have almost no nuclear...the cost effective power source.

Today, Duke is sitting pretty. They can complete those three combined cycle plants in the future and use them for peak loads as gas-fired units should properly be used. In the meantime, they just bide their time and make lots of cheap kilowatts for pennies and sell them for lots of cash. That is the story Duke Power stockholders need to hear on the History Channel, because Duke Power is the greatest power company in the history of the United States of America...probably in the history of the World.

The History Channel missed the real story. But, I liked their show anyway. It was educational and it may help folks to understand a little about what is really going on behind the scenes.

But, you and I know the real story here. If you didn't know it before, I hope I have helped with my history lesson. And, now you know more about why I absolutely love Duke Power.


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