Duke Energy has secured approval from the North Carolina Utilities Commission (NCUC) to replace its 376MW Asheville coal-fired power plant with a new $1bn natural gas facility.
The project is in line with the company's effort to shift towards a smarter and cleaner energy generation.
Work under the project includes construction of two combined cycle natural gas-fuelled electric generating units, which each have a capacity of 280MW.
The new units will replace the existing coal-fired power plant, planned to be decommissioned by 2020.
Duke Energy North Carolina president David Fountain said: "This project will allow us to continue to provide cost-effective, reliable power for all of our customers in North Carolina and South Carolina."
Approximately $750m has been planned for construction of a 650MW natural gas-fired power plant, and a solar facility at the site.
More than $320m will be spent on constructing a transmission substation, a 40-mile transmission line and modernising electrical infrastructure, to eventually reduce environmental impacts and long-term costs to customers.
Construction of the natural gas-fired combined-cycle power plant is planned to start this year and be completed by late-2019.
The firm said it will work with communities to explore and maximise programmes and technology in order to delay or cancel future plans for additional peaking generation.
Duke Energy plans to file future Certificate of Public Convenience and Necessity applications for 15MW of solar projects, 5MW utility-scale storage over the next seven years after the Asheville coal units closure.
Image: Illustration of the proposed Asheville combined-cycle natural gas-fired power plant in the US. Photo: courtesy of Duke Energy Corporation.