North Carolina regulators have approved a controversial green tariff proposal from Duke Energy, rejecting protests from critics who argue it won’t bolster the company’s transition to zero-carbon electricity. 

Originally designed as a way for large electric customers to chip in extra for renewable energy projects Duke is already mandated to build, an amended tariff offered in April could allow some customers to speed up construction of new solar farms by about two years.

The revision appeared to help sway the Utilities Commission. The change, the panel said in its Jul. 31 order, is an “improvement” because the change “adds additional accelerated capacity” of renewable energy. 

The revised tariff, called Green Source Advantage Choice, has backing from the Carolina Industrial Group for Fair Utility Rates, an association of some of Duke’s largest customers. The utility says it plans to formalize the program soon in the wake of the regulators’ order. 

“The [commission] didn’t give us a deadline but asked that we do so when reasonably feasible,” spokesperson Logan Stewart said over email, “so it will be in the coming weeks. In conjunction, we will be working on updating the Green Source Advantage public webpage to include the new program details.” 

A question of ‘regulatory surplus’ 

For large customers with 100% clean energy commitments, a green tariff is a necessity in North Carolina, where Duke has a monopoly and cities, data centers and the like can’t buy clean energy directly from solar farms.  

In theory, a green tariff allows a company such as Google or Amazon to spur a new supply of clean energy equal to their electric demand, with Duke acting as an administrative go-between. An earlier iteration of Green Source Advantage more or less did just that. 

But the accounting got more complicated in 2021, when a bipartisan state law required Duke to cut its carbon pollution at least 95% by 2050. If the company is legally required to build scores of solar farms anyway, can a large customer legitimately claim its sponsorship of one project makes a difference? 

This question of “regulatory surplus” sparked a flurry of arguments and counter-arguments before the commission for some 18 months. Duke initially claimed such “additionality” was neither feasible nor necessary, and some businesses said chipping in to support the clean energy transition was good enough for them. More than a dozen local chambers of commerce and potential customers wrote regulators in support of the original program.  

But Google, the U.S. Department of Defense, and other large customers joined clean energy advocates to flag the problem of regulatory surplus, as did the Center for Resource Solutions, the nonprofit that certifies voluntary renewable energy purchase programs. Duke University, which has no connection to the utility, said it wouldn’t participate in the tariff.  

‘A small step in the right direction’ 

The debate, along with prodding from commissioners, prompted Duke to add a “resource acceleration option” to its proposal. The alternative allows large customers to advance about 150 megawatts of solar energy each year by sponsoring projects not selected in the company’s annual competitive bidding process. Every two years, Duke gets retroactive credit for this “extra” solar as part of its compliance with the 2021 law.

Clean energy advocates believe the new option is a “small step in the right direction.” But they note it accounts for 1 gigawatt of clean energy over ten years, a fifth of the entire program. Customers who lay claim to the remaining 4 gigawatts would not be impacting the state’s transition to clean electricity, they say. 

“If you’re the customer of a business who claims to support our state’s clean energy transition by participating in the program, you’re going to expect that business to be making a difference – not just subsidizing what Duke was going to do anyway,” said Nick Jimenez, senior attorney at the Southern Environmental Law Center. 

The Carolinas Clean Energy Business Alliance, a group of clean energy suppliers, also criticized the acceleration option. And though the Carolina Utility Customers Association, another group of large industrial customers, didn’t oppose the amended proposed tariff, it registered skepticism. 

“[Our] members have little interest in the Resource Acceleration Option,” the group said in a letter to regulators, “which would deliver electricity at a premium cost without providing the benefit of regulatory surplus-based environmental attributes that would be useful in meeting corporate environmental, social, and governance goals.” 

Cause for hope? 

While advocates see little good in the commission’s approval of the Green Source Advantage Choice program, they still have some faint cause for hope. 

One is the so-called Clean Transition Tariff, which Duke could propose later this year. An outgrowth of a May agreement between the utility and Amazon, Google, Microsoft, and Nucor, that program could allow participating customers to spur new projects, such as solar-battery storage combos or small nuclear energy, that provide carbon-free electricity around the clock. 

“This is not within the order,” said Jimenez, but the May memorandum of understanding, “is the big opportunity for something better.” 

Duke says the Clean Transition Tariff would be another voluntary option for customers, not a replacement for the one just greenlighted. “We see the approval of Green Source Advantage Choice as a first step,” the company’s Stewart said, “enabling us to move forward with new tariffs like the Clean Transition Tariff.” 

Maggie Shober, research director at the Southern Alliance for Clean Energy, agrees the memorandum of understanding is cause for some optimism. But she also notes that it’s only “an agreement to talk about something. It could be an opportunity,” she said, “or it could be a missed opportunity. “ 

And no matter what, the Clean Transition Tariff won’t cater to municipalities and other midsize customers with climate commitments. If these customers decline to pursue Green Source Advantage Choice, their only option is to wait for Duke to adjust.  

Commissioner Jeff Hughes pointed to that possibility in a concurring opinion. 

“Once the program offerings are launched, it will quickly become clear whether the program is as attractive as Duke asserts,” Hughes wrote. “If concerns continue and interest is modest from the outset, it is my hope that Duke will work quickly on new programs that will have a greater impact.”

N.C. regulators approve controversial Duke Energy plan that lets large customers chip in for solar projects is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Before pivotal hearings that begin Monday, Duke Energy has made a few small concessions to its plans for a giant fossil fuel buildout in North Carolina, winning over the once-skeptical state-sanctioned ratepayer advocate.

Duke’s proposed settlement with Public Staff and Walmart needs approval from the state’s Utilities Commission to take effect. It comes as dozens of experts plan to appear before the panel to debate the company’s biennial carbon plan, including its controversial bid to invest in 9 new gigawatts of natural gas plants and punt on a key state climate deadline.

The agreement still shows Duke determined to construct five large combined-cycle gas plants in the coming decade, but only three would get a preliminary blessing for now. Public Staff earlier had wanted only one such plant to be considered “reasonable for planning purposes.”

While state law requires Duke to cut its carbon emissions 70% by 2030, in line with scientists’ recommendations for avoiding catastrophic global warming, the agreement stipulates that a pollution cut of that magnitude by decade’s end is “unachievable and presents unacceptable risks to the reliability of the grid.” 

Duke also agrees to study the $250 billion Energy Infrastructure Reinvestment Program it had earlier eschewed, though the settlement’s wording seems to reject what experts say is the program’s best use: financing up to 80% of new clean energy projects and remaining debt on retiring coal units with government loans. 

Apart from a few other changes around the edges, the settlement is aligned with the plan Duke filed in January. And while the deal means the utility and Public Staff won’t spend time debating each other next week in Raleigh, clean energy groups and other intervenors still have plenty to litigate.

‘A risk of stranded investments?’

Perhaps most notable, critics say the January blueprint, combined with Duke’s spirited defense of it in hundreds of pages of testimony filed July 1, runs headlong into a new federal rule on coal and gas plants finalized in April.

In effect, the rule forces any new large gas plants to run no more than 40% of the time beginning in 2032. Public Staff, the office of the Attorney General and clean energy groups had urged Duke to reconsider its plan in light of the new regulation, perhaps by replacing some or all of the planned gas with renewables or rolling out new initiatives to reduce electric demand.

Duke is suing to try to overturn the new rule, which is now final. But the company avowed that if the regulation remains, its only option was still to build five new, combined-cycle turbines, even if they only ran at half their potential capacity. 

Having placed manual constraints on renewables and battery storage in its computer forecasting program, Duke said in its testimony, “the model is not able to shift this ‘lost’ gas generation to renewable resources.” 

Instead, the company asserted it would have to generate more power from its existing gas and coal plants, causing 4 more million tons of carbon pollution in the year 2035, a “likely delay” in 70% pollution cuts to 2036 or later, “and an increase in the total system cost of more than $600 million.”

In its July 1 filing, Duke also brushed aside doubt from Public Staff and clean energy groups that its new gas plants could ultimately run on emissions-free hydrogen fuel, which is not yet commercially viable and many experts say may never be practical.

“Several parties incorrectly assume that the addition of new gas resources will subject customers to the risk of stranded investments,” the company wrote in its testimony, “but fail to consider the critical value of these resources over the planning horizon and lack detailed analysis regarding how such a risk would actually materialize three decades from now.”

‘A desperate attempt’

The question of timing also still looms large. Though approval of the settlement would foreclose a 2030 compliance date, clean energy advocates still hold out hope that Duke will make deep pollution cuts consistent with climate science and not delay them until late in the next decade.

In fact, the North Carolina Sustainable Energy Association and three groups represented by the Southern Environmental Law Center were so dismayed by Duke’s July 1 testimony that last week they moved for regulators to declare that they wouldn’t approve a plan that violated state or federal law, before the meat of next week’s expert witness hearings begin.

That provoked a blistering countermotion from Duke. The groups, said the utility, “were inexcusably dilatory in filing their motion, and their desperate attempt to introduce legal and procedural complexity into this proceeding at the 11th hour should be stricken.”

The commission denied both motions.

Before key hearings in North Carolina, Duke Energy makes tiny concessions to big gas ambitions is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Duke Energy has been laying the groundwork for a new gas power plant in North Carolina’s Person County for years, touting it as the “next generation” of electricity production and lining up support from local politicians eager to hold on to the utility’s tax dollars. 

With acknowledgement from regulators and even some clean energy experts that new gas infrastructure may be needed as Duke shutters its coal fleet, the long-planned gas turbines once seemed like an inevitability.

But now, the 1,360 megawatt combined-cycle facility poised to replace the company’s aging coal smokestacks on Hyco Lake has become a major point of contention. And while the odds still favor Duke, community members and advocates alike say they have cause for hope.

First, there’s the reality of new Biden administration rules on fossil fuel power plants. Beginning in 2032, any new large, combined-cycle plant like that proposed in Person County must either cut its carbon emissions drastically or run 40% of the time or less. 

Because North Carolina’s geology isn’t suited to carbon sequestration and emissions-free hydrogen fuel isn’t yet viable, the company would have to limit the plant’s operations — either making it unavailable at key times or requiring costly startups and shutdowns, said Ridge Graham, the North Carolina program manager for Appalachian Voices.

“Either of these options make this combined cycle plant a bad investment and a much more expensive form of electricity generation than clean or renewable energy sources,” Graham told commissioners at a public hearing in Roxboro last month. “This is especially true for Duke customers as the purchase of gas fuel is passed on and has led to multiple rate increases through riders on electricity bills since 2017.”

Bolstering that concern, Public Staff, the state’s ratepayer advocate, notes that Duke lists a proposed new pipeline to transport gas to the plant as an operating cost that would “presumably” be recovered through the fuel rider.

Even if the actual fuel costs were cut in half, engineers for the agency said, “total transportation charges would mostly be unchanged within the ‘Fuel’ category because of the significant pipeline costs that would be necessary to provide natural gas service to the Roxboro site.”

In addition to these charges, ratepayers would also have to pay the full cost of the plant, amortized over 35 years, plus Duke’s regulator-approved profit margin, energy analyst Elizabeth Stanton said in written testimony on behalf of Sierra Club, Southern Alliance for Clean Energy, and the Natural Resources Defense Council.  

What’s more, she noted, ratepayers would cover whatever “replacement resources” were needed to meet demand “after the facility’s expected generation was decreased.”

In contrast, Stanton says, Duke’s estimated costs for ratepayers assume the plant will run at over 40% capacity through 2042 — a scenario squarely at odds with the new Biden administration regulation. 

“Duke needs to account for the rule in their planning, and they have not done that,” Mikaela Curry, a North Carolina-based campaign manager at the Sierra Club, said in an interview. “Who pays for a gas plant that can only run 40% of the time?”

While Public Staff supports the new plant, it also asserts in testimony that Duke hasn’t developed a plan for how it will comply with the new federal rule.

“We have concerns about the impact and implementation of the recently issued [Clean Air Act] Rule,” engineers Dustin Metz and Evan Lawrence wrote. “We cannot yet identify how [the] proposed Roxboro facility may be impacted and to what extent.”

‘That modeling … was flawed’ 

The agency also hasn’t seen a comprehensive analysis from Duke to justify the location for the combined cycle unit. “The Public Staff cannot say definitively that the proposed Roxboro… project is least cost for [Duke’s] ratepayers,” Metz and Lawrence said in their testimony.

Other critics also question whether the gas plant is Duke’s most economical option, though for different reasons.

In testimony for the environmental groups, Stanton asserts that Duke artificially limits renewables in its carbon-reduction models; assumes clean energy is 60% costlier than industry standards; and, in the plan that most quickly transitions the company away from fossil fuels, makes all resources 20% more expensive. Plus, new generation built before 2030 — which would be mostly solar — gets an 8% penalty.

“Duke’s rationale for requesting the [Hyco Lake plant… is the] selection of gas resources in its least-cost modeling,” Stanton wrote. “That modeling, however, was flawed, including multiple biases for gas resources and against renewable resources.”

Detractors also doubt the company’s plan to convert the gas plant to run on emissions-free hydrogen as late as 2049 – just in time to comply with state law. That “presumption,” said consultant Bill McAleb in testimony on behalf of the Environmental Defense Fund, “is not based on substantive evidence presented in this docket proceeding.”

Detailing an array of challenges, including uncertainty from equipment manufacturers, McAleb concludes a zero-carbon, hydrogen-fueled facility, “is not only speculative but unlikely.”

‘A very nuanced topic’ 

While advocates wage a legal campaign against the gas plant, activists are reaching out to the people of Person County face-to-face, knocking doors on the roads surrounding the existing coal facility.

Juhi Modi, North Carolina field coordinator for Appalachian Voices, says the canvassing effort so far has identified more opponents than not – surprisingly so. 

“Given that it’s a very nuanced topic, and the fact that people appreciate Duke’s economic presence in the county,” Modi said, “it’s been really meaningful to just hear what they think.” 

Referencing the yearslong campaign to get Duke to excavate its leaking coal ash pits, Modi added: 

“These people were also impacted by coal ash contaminating their well water and were part of a long fight to get their water cleaned up, and still have a lot of skepticism about Duke’s ability to responsibly operate in this community.”

Along an existing pipeline right-of-way, the new pipeline Dominion Energy plans to transport gas to Duke and other customers has also given some in the community pause. Activists say it appears to pass dangerously close to Woodland Elementary School in Semora.

“What would happen if there is an accident? If there is a fire or an explosion?” Modi said. “It’s a real concern for the children, the teachers and the staff that work in the school.”

While cleaner than coal in terms of smog-and soot-forming air pollution, the gas plant’s emissions of methane — a potent greenhouse gas — will negate its climate benefits, said Katie Moore, an air quality researcher who lives in Roxboro.  

“Not only do we not have enough time to use [gas] as a ‘bridge fuel,’” she said,  but it doesn’t even make sense because the climate impacts are the same, essentially, as coal.”

Moore also believes there’s an incorrect assumption that either Duke replaces its Hyco Lake coal units with gas or the company leaves the county altogether.

“Those are not the only two options,” said Moore, who grew up in neighboring Durham County and moved to slower-paced Person 2.5 years ago. “I don’t want people to be out of jobs and I don’t want to lose 20% of the tax base. But that’s not an inevitability. I think there are lots of ways that we could embrace renewables in this county.” 

Long odds remain

Still, at an in-person public hearing last month, Moore and other locals against the plant were outnumbered by supporters, who ranged from tourism boosters to local elected officials to the superintendent of Person County Schools, Rodney Peterson. 

“A school district like ours could not recover from the loss of our local tax base,” said Peterson, who noted he was appearing in a personal capacity. “I ask you to remember our students, our parents, our teachers in Person County.” 

Besides support from many community leaders, many other factors still weigh in Duke’s favor.  

Notwithstanding its concerns about the plant’s cost and its compliance with the new Biden administration rules, Public Staff believes the energy it will provide will be vital as the company works to reduce its carbon pollution as required by law.

“There is a need for [combined cycle and combustion turbine] natural gas generation in [Duke’s] service territories,” the engineers wrote in their testimony. Denying the company a permit to build the plant, they asserted, “could delay interim carbon emissions reduction compliance and coal plant retirements set forth in the Carbon Plan Order.”

While solar combined with battery storage could in theory provide similar economic and energy benefits as the gas plant, Person County leaders would have to repeal a 2022 ordinance that effectively bans large-scale solar farms. 

Meanwhile, Duke is eschewing an Inflation Reduction Act loan program meant to encourage clean energy investments in communities with retired coal plants.

And even though the commission is dominated by appointments from Gov. Roy Cooper, a Democrat who’s embraced the clean energy economy and criticized fossil fuels, the panel has so far exhibited little resistance to the utility’s gas expansion plans.

“It just makes me feel sad,” said Crystal Cavalier-Keck, the co-founder of the Indigenous activist group Seven Directions of Service, referencing how the panel approved Duke’s last carbon reduction plan with few edits. “It’s disheartening.”

A spokesperson for Duke declined to comment for this story, but the company’s formal responses to Public Staff and clean energy advocates intervening in the case are due later this month. An expert witness hearing is expected as soon as early August.

In the meantime, organizers like Cavalier-Keck say they’ll keep getting the word out. “We’re just going to continue to knock on all the doors,” she said, “and continue to educate people.”

Can a long-planned Duke Energy gas plant in North Carolina be defeated? is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Duke Energy’s plan to zero out its carbon pollution all but ignores a federal loan program that could save ratepayers hundreds of millions of dollars and enable more clean energy, the state’s ratepayer advocate said in recent filings.

And since the loans run out in September 2026, state Public Staff and clean energy advocates say time is running out for Duke to correct course. 

“This is a singular bite at the apple that they’re going to get,” said Jeremy Fisher, principal adviser for climate and energy at the Sierra Club. “So, we’re not in a position to sit here and say, ‘hey Duke, in your next [long-term plan], you should model it.’ This is the moment.” 

Public Staff called attention to the $250 billion federal Energy Infrastructure Reinvestment Program in its assessment of Duke’s proposed biennial carbon reduction plan, the first of which was approved by state regulators at the end of 2022, months after the surprise passage of the Inflation Reduction Act.

In accepting Duke’s plan that year, regulators noted: “it is appropriate for Duke to incorporate the impacts of the Inflation Reduction Act… and other future legislative changes… into its [Carbon Plan and long-range generation] proposal that it will file with the Commission on or before September 1, 2023.”

But Public Staff and other intervenors say the utility did not fully do so, at least when it comes to the Energy Infrastructure Reinvestment Program. 

“The Public Staff has concerns regarding Duke’s failure to model the [loan] program,” wrote Jeff Thomas, an engineer with the agency. The program, he added later, “represents a significant opportunity for cost savings for ratepayers tied to the deployment of new clean energy resources.”

Bundling retirement refinancing with new clean energy

The loans are perhaps less well known than the Inflation Reduction Act’s tax incentives for everything from electric vehicles to solar panels to offshore wind turbines. 

But they’re just as important, if not more so, especially in light of the North Carolina law that requires Duke to reduce its carbon emissions in a “least cost” manner.

Fisher said utilities can take advantage of the program to varying degrees, with proportionate savings for ratepayers. 

In the “ideal use of this program,” Fisher said, utilities can refinance outstanding loans for their retiring coal plants and combine them with new clean energy investments, all for a low interest rate. Then there’s a “lesser version,” in which a utility doesn’t transfer its balance on old coal plants but does finance new clean energy projects through the federal government. Finally, he said, there’s “one more step down.” That’s where a company like Duke essentially switches to the government debt it would otherwise owe a bank.

In a recent paper, the clean energy think tank Rocky Mountain Institute explained why this last option is least desirable for ratepayers.  

“If utilities do nothing more than use [Energy Infrastructure Reinvestment] loans to displace corporate debt,” researchers wrote, “overall ratepayer savings will be minimal, since most utilities can already borrow at reasonably attractive interest rates without the added complication and expense of participating in a government program.” 

Yet, Fisher said, testimony from the state-sanctioned customer advocate suggests this “stepped down” version of the loan program is what Duke envisions.  

Michelle Boswell, director of Public Staff’s accounting division, relayed an example of a Missouri utility that could maximize the Energy Infrastructure Reinvestment program and save its customers over $900 million. “While these ratepayer benefits come at the expense of lower earnings for the utility,” Boswell noted, “they are consistent with the least-cost mandate contained in [state law].” 

‘Take aggressive advantage?’ 

At a technical hearing last week before regulators, Thomas reiterated that position. “As the ratepayer advocate, cost is a major concern,” he said. “We believe there are ways to control costs. One proposal is that Duke should take aggressive advantage of the Energy Infrastructure Reinvestment loan program.”

Doing so could save ratepayers more than $400 million through 2032, Thomas said last week, and lead to increased renewable and storage deployment.

Testifying on behalf of Attorney General Josh Stein, expert witness Edward Burgess stressed the loan program could be utilized to cover transmission upgrades needed to connect more solar and storage to the grid. 

“Reconductoring of transmission lines could allow for significantly greater renewable resource availability,” Burgess wrote. “This could be done much more cost-effectively with assistance from the Energy Infrastructure Reinvestment program.”

Indeed, advocates say the federal program doesn’t just promise to lower ratepayer costs for the clean energy Duke currently proposes. By changing the economic calculus, the loans could spur the company to invest in more storage and solar and retire its coal plants sooner. 

Duke’s proposed 1,360-megawatt gas plant outside Roxboro in Person County is a case in point.

In theory, rather than replace coal smokestacks on Hyco Lake with gas-fired units, Duke could build battery storage and clean energy on the site instead. 

That investment would qualify the utility for an additional 10% federal tax incentive, since it would be located within 30 miles of a retiring coal plant. Much of the outstanding debt on the old fossil fuel plant and the solar and battery investments could be leveraged into a low-interest loan through the federal government.

Testifying for several clean energy advocacy groups, expert witness Maria Roumpani said that Duke may not be taking full advantage of this additional 10% incentive, since it assumes that 60% of its new standalone batteries will be sited at retired coal sites.

“Although the approach seems reasonable,” Roumpani wrote, “it might lead to the analysis overlooking certain opportunities to replace coal capacity.”  

The Energy Infrastructure Reinvestment Program and the 10% bonus credit for former coal plant communities could also work in concert with so-called securitization of Duke’s coal-fired power plants, in which the remaining book value of plants is paid off through bonds backed by ratepayers. 

The same state law requiring Duke to zero out its carbon pollution also calls for only half of the book value of its least efficient coal plants to be securitized. Theoretically, advocates say, the remainder could be paid off through the federal loan program.

‘A once-in-a-decade opportunity’ 

Asked about Public Staff’s assertion that the utility didn’t account for the federal loan program in its latest proposal for phasing out carbon, spokesperson Bill Norton said Duke was still reviewing the filing. 

He added, “we have already engaged with the Department of Energy and other utilities to learn more about the… program and see if it provides benefits to our customers. We will pursue all federal funding that we believe can reduce energy transition costs for our customers in a manner that protects reliability, supports our coal plant communities and accommodates North Carolina’s growing economy.”

Public Staff and others say time is of the essence. The loan program has a limited amount of funds, and records suggest other utilities have already applied for nearly half the total. That means Duke needs to begin applying for the loans as soon as possible, and, critics argue, should have already started.

“By failing to examine this option,” the attorney general said in its filing, “Duke may be missing out on a once-in-a-decade opportunity to save millions for its customers.”

N.C.’s ratepayer advocate: Duke Energy ‘failed’ to consider incentives that would cut costs & enable more clean energy is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

It’s become a biannual tradition.

Since 2021, when North Carolina adopted a law requiring Duke Energy to zero out its carbon pollution, advocates have spent every other year poring over the company’s plans for supplying this state of 11 million with clean electricity. 

As of late last month, the first phase of the new ritual is now complete: citizens turned out by the hundreds to public hearings around the state and submitted written comments; and dozens of organizations, businesses, and large customers filed testimony to the state’s Utilities Commission, charged with approving or amending Duke’s plan by year’s end.  

A review of these comments shows clear dissatisfaction with Duke’s plan, which critics say is too reliant on gas and unproven technologies and too dismissive of resources like solar and battery storage.  

But there are also a few powerful institutions pulling in the opposite direction. And their voices could grow louder in the coming months, as the state enters the next phase of in-person, expert witness hearings. 

The law requires Duke to cut its carbon pollution by 70% by 2030 and at least 95% by midcentury, in line with scientists’ recommendations for avoiding catastrophic global warming. The statute directs regulators on the Utilities Commission to develop a plan to make that happen and to update the blueprint every two years.

Even as the popular, bipartisan measure moved through the legislative process, some critics worried it gave too much deference to Duke and did not make clear that regulators — not the utility — would chart the state’s path to a decarbonized electricity sector.

Still, after Duke in 2022 issued its first Carbon Plan proposal — a document covering hundreds of pages and including four different pathways for achieving net zero — a host of outside stakeholders put forward their own plans for the commission to mull, hoping the panel would pick and choose from them or even craft its own blueprint.

But in the end, after months upon months of expert hearings, public input, and thousands of pages of written testimony, the commission adopted Duke’s plan with few edits. 

This first Carbon Plan order was largely nonbinding. But after regulators sided with Duke on virtually every major issue — from how much the company should drive energy efficiency to how much solar it can connect annually to the grid — advocates this year are taking a slightly different tack. 

Rather than devise their own painstaking models to compete with Duke and its army of lawyers, engineers, and other experts, this time most organizations are starting with the company’s portfolios and critiquing key elements.

‘Most reasonable, least cost, least risk plan’

As in the lead up to the first Carbon Plan, this year Duke has proposed multiple routes to zero carbon by midcentury, with one clear preference. Offered in January after predicting a steep rise in electricity demand, that pathway is to add over 22 gigawatts of renewable energy and battery storage in the next decade, including from ocean-based wind turbines.

In the same time frame, the company wants to shutter most of its coal plants and add nearly 9 gigawatts of new gas plants, nearly three times the immediate build-out it proffered two years ago and one of the largest such proposals in the country. It also envisions two small nuclear plants of 300 megawatts each, about a seventh the size of the state’s largest nuclear plant outside Charlotte.

The company seeks to exploit exceptions in the state’s law to achieve a 70% cut in carbon emissions by 2035 instead of 2030. And while its plans to zero out its pollution are vague, they rest partially on building more nuclear reactors by 2050 and fueling any remaining gas plants with hydrogen – a technology still under development.

Still, Duke’s focus is on the immediate term. In its January filing, it sought support for “pursuing near-term actions that align with [its preferred pathway] as the most reasonable, least cost, least risk plan to reliably transition the system and prudently plan for the needs of…customers at this time.”

‘Imperative that the 2030 target be met’ 

Numerous commenters questioned that assertion, including the company’s premise that ratcheting down emissions more slowly than the law prescribes presents a “lower execution risk.” 

Perhaps most notably, the Clean Energy Buyers Association, a group of 400 major corporations from a range of sectors with their own sustainability targets, argued forcefully against delaying the 2030 target. 

“The ability of [our] members that are Duke customers to meet their clean energy commitments depends in large part on how clean Duke’s resource mix is,” the association’s Kyle Davis said in written testimony. He went on to say regulators should “only” approve a near-term plan that would allow Duke to cut its pollution 70% by decade’s end. 

Similarly, a group of local government Duke customers with climate goals, including major cities Raleigh and Greensboro and small college towns Boone and Davidson, noted that Duke’s energy mix would dictate whether they could meet their aims.

“Due to the urgency of the climate crisis and the implications to the health and well-being of the constituents we serve,” the cities and counties wrote, “it is imperative that the 2030 target be met in the timelines specified in [the law.]”

Testifying for the office of the Attorney General Josh Stein, expert witness Edward Burgess noted that the commission has not yet abandoned the 2030 deadline and that, according to the law, the 70% cut could only slip past 2032 under “very specific conditions” that have not been met.

Regulators haven’t authorized a nuclear or wind project that has been delayed beyond Duke’s control, he asserted, and a delay wasn’t necessary to maintain the “adequacy and reliability of the existing grid.”

Recognizing Duke’s latest increased demand projections, Burgess urged commissioners to “set a clear directive for Duke to achieve the Interim Target by no later than 2032.” Otherwise, said the witness for the attorney general, the public interest would be harmed by the “increase [in] the cumulative tons of CO2 emitted, which would remain in the atmosphere for hundreds to thousands of years.”

‘Arbitrary limits on battery and solar’

The process by which Duke maps its generation plans over the next decade is complex and time intensive. But it’s aided by a computer modeling program that weighs various factors including costs to produce an optimal generation mix.

This method produces more solar and battery storage each year than Duke thinks is possible or appropriate to connect to the grid, so the company imposes manual limits on the computer program. Critics call that step unnecessary and damaging to the project of curbing carbon emissions in a least-cost manner. 

“Solar [photovoltaic] is the cheapest source of carbon-free electrons on the grid now and for the foreseeable future,” testified expert witness John Michael Hagerty on behalf of the Carolinas Clean Energy Business Association. “All things being equal, the more generation… that Duke can get from solar PV instead of other resources, the cheaper it will be for Duke to comply with carbon reduction targets.”

Michael Goggin, an expert witness for the North Carolina Sustainable Energy Association and clean energy groups represented by the Southern Environmental Law Center, analyzed other grid operators around the country and estimated that Duke could connect around 4 gigawatts of solar and storage annually, compared to the upper limit of 2.8 gigawatts suggested by the utility.

“Duke’s arbitrary limits on solar and battery interconnection should be greatly increased if not eliminated,” Goggin wrote. “These limits do not reflect reality, and there are many potential solutions to the interconnection challenges Duke claims in its attempt to justify these limits.” 

Pleading for more offshore wind

While numerous commenters were happy to see Duke move much more ambitiously toward offshore wind than it did two years ago, they noted the utility’s projected 2.4 gigawatts — enough to power about a million homes — fell significantly short of the near-term potential in ocean wind areas off the state’s coast. 

“The Carolina Long Bay projects have the potential to reach more than 2 gigawatts, and the Kitty Hawk Projects have the potential to reach nearly 3.5 gigawatts,” two employees of wind company Avangrid testified. “Therefore, there is additional offshore wind resource beyond the Preferred Portfolio request available to North Carolina.”

The state’s Department of Commerce has taken a keen interest in offshore wind because of its vast potential for economic development. Jennifer Mundt, an assistant secretary at the Department, implored regulators and Duke to “set a path forward… that directs the deployment of at least 6.0 gigawatts of offshore wind by the mid-2030s.” 

Such development is achievable with the Carolina Long Bay and Kitty Hawk areas, she said, and “will unlock billions in capital expenditures and tens of thousands of good-paying jobs for North Carolinians, and boost Duke towards its mandate to achieve carbon neutrality by mid-century – a true win-win-win scenario.”

A pair of experts testifying for the North Carolina Sustainable Energy Association noted that Duke would benefit from being a “second mover” on offshore wind in the United States: it could learn from the many other projects underway on the Eastern seaboard without putting ratepayers at risk. 

In contrast, John O’Brien and Philip Moor warned that for small modular nuclear reactors, “it is unclear when the Companies will be a second mover… the only approved project design…has been cancelled, and the closest designs… are under development by TerraPower and the Tennessee Valley Authority.”

Skepticism of new gas and ‘advanced’ nuclear

Indeed, while most clean energy advocates believe large, existing, emissions-free nuclear power plants can play a vital role in curbing carbon pollution, several say Duke’s near-term pursuit of as-yet unproven small modular reactors over more readily available alternatives is a mistake.

“Given the long lead-times, nuclear experts have found that [small modular reactors] will do nothing to address climate change, as the technology is too little, too late,” Grant Smith, senior energy policy advisor with Environmental Working Group, testified on behalf of his group, Durham nonprofit NC WARN, and others.

Numerous stakeholders criticized Duke’s plan to build 10 new gas plants in the next decade, half of which would be large baseload plants forced by new federal rules to run 40% of the time or less. Not only would Duke customers be on the hook for these underutilized plants, critics argued, they’d also be subject to erratic fuel prices.

“In North Carolina, this volatility was at the heart of hundreds of millions of dollars of recent fuel cost increases approved by the commission,” expert witness Evan Hansen testified on behalf of Appalachian Voices. “The Companies’ proposed aggressive build-out of natural gas-fired power plants will only increase their exposure, and their ratepayers’ exposure, to the future volatility of natural gas prices.”

The company’s strategy of converting gas plants to run on hydrogen molecules separated from other compounds as late as 2049 also strains credulity for some. 

“Duke’s general plan to build new natural gas-firing facilities and then transition those facilities to 100% hydrogen-firing faces significant technical uncertainty, infrastructure hurdles and costs,” testified William McAleb for the Environmental Defense Fund. The plants, he said, “are not necessary to maintain grid reliability, may never be co-fired with hydrogen, and will likely raise rates.”

The Clean Energy Buyers Association also suggested that Duke’s plan to supply its members with gas-fired electricity could backfire, causing the state to lose economic development projects and the utility to lose new customers.

“Some of the new load that Duke is forecasting may not materialize if Duke increases the carbon intensity of its resource mix as it has proposed to do in this docket, since some of the customers bringing new load… have clean energy targets,” the association’s Davis wrote. 

If that happens, he said, “and Duke overbuilds with fossil fuel capacity, it would result in higher costs for existing customers and make it more difficult for existing customers to meet their sustainability targets.”

Amid all this criticism, support for Duke’s approach stood out, especially where the timeline is concerned.

Testifying for the Carolina Industrial Group for Fair Industrial Rates, a powerful consortium of manufacturers and other large Duke customers, Brian Collins asserted, “there is increased cost and risk in reliably meeting the interim 70% target by 2030. As a result, I recommend that the Commission not require Duke to meet the 70% emission reductions target by 2030.”

Public Staff, the state-sanctioned ratepayer advocate, believes that compliance with the interim pollution cut is possible by 2034 but not before. And the state’s 26 electric cooperatives, which buy electricity wholesale from Duke, expressed some concern about the speed of transmission upgrades necessary to add renewable energy to the grid fast enough. 

A technical conference is scheduled for next week in Raleigh, and what is likely to be weeks of expert-witness hearings begin July 22.

Groups urge N.C. regulators to push Duke Energy on solar and wind, pump the brakes on new gas is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.