NC Public Staff backs 'merchant' power plant

One of the largest "merchant" power plants ever proposed in North Carolina has won the backing of the N.C. Public Staff and appears on its way for approval by the N.C. Utilities Commission.

The King's Mountain Energy Center is a 475-megawatt natural gas-fueled power plant proposed to be built in Cleveland County. The Public Staff said in a filing Friday that NTE Carolinas Holdings, which would own and operate the plant, demonstrated there will be a need for the electricity in the future and the plant's construction is justified.

A merchant plant is financed by investors, rather than utility customers, and sells wholesale power to the highest-bidding electric utility or to any utility that will purchase the electricity. If the facility can't sell the power it generates, the loss will be eaten by its owner and investors, not by North Carolina utility customers.

NTE Holdings is an affiliate of privately-held NTE Energy in St. Augustine, Fla., which is also developing merchant power plants in Texas and Ohio. The proposed merchant plant in North Carolina would begin construction in June 2015 and begin generating power in March 2018, with an expected lifespan of 40 years.

The Public Staff is an independent state agency that represents the "using and consuming" public in utility matters before the Utilities Commission. The Public Staff supports NTE's project as long as the company doesn't seize private property by eminent domain.

Larger merchant plants have been proposed in North Carolina, such as a 640-megawatt facility in 2001 and a 1,100-megawatt facility in 2002, but they were never constructed.

This story was originally published October 13, 2014 at 5:01 PM with the headline "NC Public Staff backs 'merchant' power plant."