Facing a massive projected increase in electricity demand, Duke Energy on Wednesday proposed what advocates called a “tripling down” of new gas plants and scuttling a 2030 deadline to significantly curb its carbon pollution.

An update of a proposal submitted last summer, the bid comes after the company warned in November that major new economic development projects would drive electricity sales “well above” its “historical experience.” 

The amended plans show the company expects a 12% increase in demand by 2038, driven largely by more than two dozen economic development projects in both Carolinas that had made “commitments sufficient to justify inclusion” in the new load forecast. 

To meet the increased demand in the near term while preparing for decarbonization mandates in the long term, Duke wants to build two more large, “hydrogen-capable” gas plants than it proposed in August. Some hydrogen fuel could theoretically be zero-emitting but is not yet commercially available, and critics call the technology speculative.

The company also proposes an additional smaller, single-cycle gas plant. In all, Duke recommends nearly 9 gigawatts of new gas before 2035, almost three times what it anticipated in its first blueprint to cut carbon pollution, approved at the end of 2022. 

“This plan is tripling down on the coal-to-gas transition, saddling customers with risky investments in new polluting power plants and failing to deliver the clean energy future called for in state law,” said Will Scott, Southeast Climate & Clean Energy Director for the Environmental Defense Fund, in a prepared statement.

On the bright side for renewables, the company does recommend a smidge more solar and battery storage. And most significantly, it proposes 2.4 gigawatts of offshore wind by 2035 — about two-thirds the size of the Kitty Hawk Wind energy area, the project off the Outer Banks that’s furthest along in development. 

“Obviously, this is fantastic news, that we’re seeing offshore wind in the Carbon Plan,” said Katharine Kollins, president of the Southeastern Wind Coalition. But she flagged what appeared to be a lengthy and probably unnecessary study period in the new Duke filings. 

“What all of the developers need is certainty and a path to market,” she said. “I think we need to make sure that we don’t get caught in a loop of trying to gather information, and bringing that back to the Utilities Commission, and then gathering more information.” 

Duke also left its summer plans for retiring its coal plants largely unchanged, even moving up the timeline for closing one of its largest, the Roxboro 4 unit in Person County, to 2029.

“It’s nice to see that large, dirty capacity go away quicker,” said Justin Somelofske, regulatory counsel for the North Carolina Sustainable Energy Association. But, he added, “the bad news is… they’re doing that to use the transmission assets to interconnect new gas.”

And though regulators had ordered Duke to file with its latest proposal “a portfolio that meets the 70% reduction by 2030,” as mandated by law, the utility doesn’t really do so. Instead, it appears to suggest in just one chart on one page that resources planned by 2035 could be built five years earlier. 

“We were very happy with the [Utilities] Commission order requiring Duke to do that,” said Somelofske of the 2030 blueprint. “But it feels like Duke was checking a box, instead of making an earnest effort to find a viable path to achieve 70% by 2030.”

A Duke spokesperson didn’t respond to a request for comment before this story was published. But the company’s filing makes clear it prefers a pathway to cutting its pollution 70% by 2035, if not 2037. That plan, it writes, is the “most reasonable, least cost, and least risk portfolio for planning purposes.”

As they have in the past, advocates say they’ll scrutinize Duke’s load projections as part of the Carbon Plan process this year. But the irony isn’t lost on them that much of the new demand is being driven by electric vehicle battery plants and other projects heralded as part of the clean energy transition. And some companies likely chose the state in part because of its commitment to decarbonizing the electricity sector. 

“We don’t want to see Duke take a fundamentalist position to meet the challenge” of new demand, Somelofske said, “by doing what they’re comfortable with, and then potentially threatening future economic development.”

No matter what, the latest Duke filing is far from the last word on the subject. The state’s Utilities Commission has until the end of the year to greenlight or amend the Carbon Plan, and it has scheduled public and expert hearings through the spring and summer.

“We’re hopeful the Utilities Commission will require Duke to pursue a path that controls costs for customers,” Scott said, “while meeting North Carolina’s 2030 carbon emission reduction goal on time.”

Editor’s note: This story has been updated to provide more context on Duke Energy’s proposed power plant investments.

Facing demand increase, Duke Energy seeks to delay its 2030 climate target in North Carolina  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.

From corporate giants like Google to individual families, plenty of Duke Energy customers in North Carolina want to do their part in the transition to clean energy. 

But if the Charlotte-based utility’s proposed green tariffs are approved as is, that good will would only help finance Duke’s compliance with the state’s carbon law — not ensure more renewables are added to the grid sooner. 

The two programs, one for large customers and another for residential ratepayers, have been before the state Utilities Commission for nearly a year, and regulators there have given little indication of how they will rule. 

But with Duke’s existing green tariff for institutions like cities and corporations running out of room, the company is eager for a decision soon, and many stakeholders fear the worst. 

‘Incremental megawatts’

In the long absence of federal climate and clean energy policy, scores of large electricity users have set their own goals for curbing carbon pollution and ensuring their energy comes from renewable sources. 

Those large customers include universities, Fortune 500 companies, and even the U.S. Department of Defense. But in North Carolina, where Duke is a regulated monopoly, those entities can’t buy electricity directly from a third-party like a solar developer. 

A “green tariff,” in which Duke acts as a go-between, helps solve that problem. Large customers can negotiate the construction of a new renewable project like a large solar field, which sells electrons to Duke. The utility then charges the customer for the same amount of electrons, plus a premium and an administrative fee.

Duke’s original Green Source Advantage program was one such tariff. Though the scheme had its critics, it met an essential criterion for customers with climate goals: the renewables would not have been built but for the program. 

“These are 100% incremental megawatts, over and above what would have been done otherwise,” Carson Harkrader, CEO of Durham-based Carolina Solar Energy said back in 2020, of a 35 megawatt solar project built for the city of Charlotte using Green Source Advantage. 

Duke University — which shares a benefactor but no other relation to the utility — has also turned to Green Source Advantage to meet its carbon goals, contracting with Asheville-based Pinegate Renewables to build three new solar fields of 101 megawatts.

But Casey Collins, the school’s director of utility and energy services, says the campus won’t participate in the next iteration of the green tariff if it’s approved as proposed. “I’m not a fan,” he said. 

‘Fundamental flaw’

The most important and “fundamental flaw” of Duke’s proposed Green Source Advantage Choice program, Collins said, is that it doesn’t provide additionality. “Regulatory surplus is the exact term,” he added.

Regulatory surplus is easy to achieve if regulation is lax or non-existent. In 2020, state law required Duke to produce just 12.5% of its electricity from renewables; whatever got built under the Green Source Advantage program was gravy. 

But a 2021 law requiring Duke to zero out its carbon emissions by 2050 blurs the line between gravy and business as usual. If a solar field would have been built in 2040, can it really count as additional if it’s built in 2025? 

Advocates say the answer is “yes,” for a host of reasons. For one thing, new renewable sources of energy are more valuable now for displacing fossil fuels than they will be in the future. 

“From a carbon perspective, these are really long-lived molecules,” said Jake Duncan, southeast regulatory director with Vote Solar. “Every molecule of carbon we put out now is going to live in the atmosphere for decades to come — contributing to the greenhouse gas effect.” 

What’s more, the 2021 law requires Duke to balance reliability and affordability in considering its compliance with the 2050 target — not produce a specific amount of renewable energy on a set timeline. That means there’s no guarantee that the solar field would be built in 2040 at all. 

In its separate Carbon Plan proceeding, Duke proposes an annual cap on new solar added to the grid of 1,350 megawatts. Upwards of 400 megawatts could be built through the Green Source Advantage Choice program.  

The interconnection cap could be avoided with smaller, distributed solar resources that don’t require more transmission upgrades or projects that utilize capacity from retiring coal plants, advocates said.

“We think there are a bunch of ways to get around that alleged problem,” said Nick Jimenez, senior attorney with the Southern Environmental Law Center.  

Spurring clean energy projects that Duke wouldn’t otherwise build under its mandate could have other advantages. For instance, the company might be less likely to build some new gas infrastructure — assets that could become stranded and cost ratepayers.

Initiatives that almost certainly wouldn’t meet the affordability metric, such as rooftop solar for low-income households, would also help reduce energy burdens for those most in need, Jimenez said.

And companies like Google — with 24-hour data centers in the state — are determined to ensure carbon-free sources meet their needs around the clock, and their presence boosts economic development.

“We should try to be on the cutting edge, serving the interests of these sophisticated corporates who want to be here,” said Jimenez. “So, we should design programs that can get them 24-7 [carbon-free energy.]” 

‘The potential to mislead customers’

Instead, there’s wide agreement that Duke’s proposal would, essentially, get certain customers to chip in for its compliance with the 2021 carbon law.

“If it goes through as currently proposed,” said Ethan Blumenthal, regulatory counsel at the North Carolina Sustainable Energy Association, “those who participate in the program would help subsidize the transition to renewables, but not expedite the transition.”

And especially for the program aimed at residential customers, called Clean Energy Impact, that nuance could be lost on participants — potentially violating FTC rules, according to the office of the North Carolina Attorney General. 

“The programs have the potential to mislead customers while not meaningfully supporting the adoption of clean energy,” the office wrote.

Numerous large customers including Blumenthal’s group, which represents large buyers as well as renewable developers, as well as Google and the Department of Defense have also flagged the “additionality” problem to regulators.

Center for Resource Solutions, the nonprofit that certifies voluntary renewable energy purchase programs, also raised a flag. “Under current rules,” the organization said in a June letter, “the Green-e® Energy program would not be able to certify Duke’s Customer Programs.”

The CRS letter also noted: “Customers of products that are not surplus to regulation can credibly claim to be using renewable energy… and that they are supporting compliance.”

For many customers, that might be enough. Not every corporation’s standards match those of Google and major universities. And Duke Energy points to more than a dozen local chambers of commerce and other customers who support their proposal as is.

Still, the company doesn’t dispute the lack of regulatory surplus in its programs, and emphasizes that it will make that clear when advertising them.

Plus, said Wendi Fleener, Duke’s director of clean energy, “we do not believe additionality is required or feasible under [state law].” She added:  “As more and more states and utilities move towards net zero, I don’t think additionality is really where folks should be focused.”

With just 39.1 megawatts left in its existing green tariff program, Duke is eager for a decision from regulators.

“I’m just very focused on trying to get some options for our customers as soon as we can,” Fleener said.

But advocates like Jimenez are anxious. If the commission adopts Duke’s programs as proposed, they would miss an opportunity to spur more clean energy at a critical time.

“It would be bad,” he said. “And the next bite at the apple would probably be some years down the road.”

Decision looms on Duke Energy’s bid to use green tariffs to help comply with N.C. carbon law 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.

Charlotte-based NASCAR, like so many of its Fortune 500 advertisers, has lofty goals to reduce its carbon footprint and invest in renewable energy. 

But just as stock-car racing has long held prominence in the Southeast, so too have electric utility monopolies. And unlike in neighboring Virginia, which has its own share of speedways, large customers in North Carolina can’t buy renewable energy in a competitive wholesale market.  

That’s why the Clean Energy Buyers Association — whose members include NASCAR, Lowe’s, Walmart, and dozens of other major employers in the state — is wading into the debate over Duke Energy’s long-term plan for zeroing out carbon emissions by midcentury. 

“In the absence of a competitive wholesale market, it’s where you can get the biggest bang for your buck,” said Katie Southworth, a deputy director of market and policy innovation for the association. “It will determine whether or not over 100 customers that are located in Duke’s territory can buy clean energy.”

‘It’s least cost and also happens to be clean’

Even as a right-wing backlash against climate-conscious investing and so-called “woke” companies ripples across the country, the economic realities of renewable energy remain undeniable in corporate boardrooms. Volatile fossil fuel prices and the costs of remediating toxic byproducts like coal ash make ever-cheaper renewables more attractive, Southworth says. 

“Companies that are making billion-dollar investments are forecasting the cost of the asset over its lifetime, and they’re choosing to procure competitive, clean energy because of economic considerations,” Southworth said. “It is least-cost, and it just so happens to also be clean.” 

Combined with pressure from customers, that has pushed hundreds of companies to set and pursue climate targets often more ambitious than those of their servicing utilities. The association overall aims for a 90% carbon-free electric grid nationwide by 2030; Duke’s goal is to zero out emissions by 2050.  

As the number of corporations dedicated to speeding up the clean energy transition grows, so too does their imperative to prove that they’re truly decarbonizing the grid — not just taking credit for wind and solar farms already up and running. 

The association claims its members have procured 71 GW of carbon-free energy since 2014 through power purchase agreements, direct ownership, and other means. The figure accounts for roughly a third of all U.S. clean energy capacity today, according to data from the Energy Information Administration.  

But the vast bulk of these procurements have been outside the Southeast, Southworth says, for a simple reason: the region is blanketed with regulated monopolies that disallow many voluntary purchase arrangements.

‘We’re generally disappointed’

Regulators approved Duke’s 2022 Carbon Plan largely without edits, despite scores of critics who said it low-balled solar, energy efficiency and wind while relying on as-yet commercially unproven technologies like small modular nuclear reactors and hydrogen to meet its midcentury climate targets. 

In its draft 2024 plan, Duke presents only one pathway to cut emissions 70% by 2030. The utility’s preferred route is to meet the 70% target by 2035, leaning again on nuclear and gas. 

“We’re generally disappointed at the lack of ambition that we’re seeing from Duke and what they’ve proposed,” Southworth said. “I think there are some good reasons for the commission to question many of the assumptions that Duke has made around natural gas fuel cost.” 

Plus, even if Duke reached the 70% target by the end of the decade, Southworth’s organization has a 90% goal by that time. So, the group also hopes the Carbon Plan process will help dissolve barriers to members’ investment in clean energy and, at the very least, build an argument for increased market competition.

“We’re a state that doesn’t provide America’s largest employers an opportunity to buy the kind of energy they want,” said Chris Carmody, executive director of the Carolinas Clean Energy Business Association, a consortium of renewable energy producers. But, he said, “I think there’s several opportunities within the Carbon Plan for more competition.” 

One concerns a cap on the amount of solar Duke can connect to its grid each year. In its first Carbon Plan the company proposed, and regulators accepted, adding about 1,000 MW of solar per year — a pace critics said was far too slow. In this draft, the company suggests a minimum of 1,350 MW. 

This interconnection limit doesn’t just impact how much solar Duke adds to the grid for its own generation portfolio. It also restricts the size and number of solar farms that companies can build and access through pass-through arrangements like Duke’s Green Source Advantage program.

“This is one huge problem,” said David Rogers, deputy director for the Sierra Club’s Beyond Coal campaign. “If Duke makes a deal with Google or the Department of Defense to build a bunch of solar, that just comes out of the 1,350 [MW cap].” 

Unlike some other barriers to clean energy for large customers, there’s no other docket so far in which to contest the annual cap. “This artificial limitation that Duke has placed on solar interconnection,” said Carmody, “that’s a specific Carbon Plan feature.” 

‘Sharing is caring’

The Carbon Plan process also offers the Clean Energy Buyers Association the chance to push for more competition in the Carolinas, which it and other experts believe will result in more clean energy and lower costs.

Though the 2021 law requiring Duke to decarbonize requires the utility to own 55% of new solar and 100% of other renewables added to the grid, experts say third parties could still vie to build renewables in a competitive process, then transfer ownership to the company. 

Another popular idea among many clean energy experts: a wholesale regional marketplace that would allow large customers to buy wind, solar, and other energy sources directly at competitive prices.  

A regional transmission organization could save the Southeast hundreds of billions of dollars and cut emissions 37%, according to a 2020 study by Vibrant Clean Energy and Energy Innovation. A Brattle Group analysis commissioned by the South Carolina legislature concluded the state alone could save $360 million a year in such a wholesale market. 

“One thing the commission should and can do is promote competition in procurement and require Duke to model expanded market options,” said Southworth. 

Related is the question of Duke’s reserve margin. A stable of power plants that can ramp up to meet peak demand, the most recent reserve margin was targeted at 17%. The company now proposes hiking it to 22%.

Rather than build more gas plants that may fail in extremely cold temperatures — as they did nearly a year ago during Winter Storm Elliott — Southworth says Duke should consider tapping power reserves from other utilities in the region. That, too, would lower costs and make more room for clean energy.

“They ought to be working with their neighbors to address these reliability issues versus trying to fix the world themselves,” Southworth said of Duke. “They should evaluate reserve sharing. Sharing is caring.” 

Still, while evaluation and study are possible, few observers believe regulators would direct Duke to join a wholesale regional market without explicit legislative direction. Some said the ultimate impact of the Clean Energy Buyers Association’s involvement in the Carbon Plan might be to achieve just that.

“These are certainly the companies that could get something done in the legislature,” said Steve Kalland, executive director of the North Carolina Clean Energy Technology Center.

And while Charlotte-based NASCAR and Mooresville-based Lowe’s aren’t likely to exit North Carolina altogether, other companies could, or choose to invest heavily elsewhere.

“They’re setting goals, and they need to meet them,” Southworth said last month on a conference panel hosted by the North Carolina Sustainable Energy Association. “They’ll leave if they can’t get the clean energy they need. They’ll go to Oklahoma.”

But on that same panel, Duke’s deputy general counsel, Jack Jirak, pushed back. 

“We certainly respect and value very much the perspective of customers who desire clean energy. That’s a high priority for us,” Jirak said. “North Carolina for two years in a row was the number one state for economic development. I think that shows there’s something we’re doing right.”

Group representing NASCAR and other N.C. companies says Duke Energy needs to pick up the pace on 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.

A powerful consortium of pulp and paper mills and large manufacturers said Thursday it would drop its challenge to a Duke Energy aid program — ensuring tens of thousands of poor households in Asheville and eastern North Carolina will receive bill assistance next year after all. 

Set to begin in January in Duke Energy Progress territory for a three-year trial period, the program gives a $42 discount for 12 months to customers struggling to pay their electric bills. Large industrial customers help pay for the program with a flat $1.70 monthly fee.  

The Carolina Industrial Group for Fair Utility Rates had contended that regulators lacked the authority to approve the program, and that it violated the ratemaking principle that one class of customers shouldn’t subsidize another. The group moved for a delay until the matter was resolved by the state Supreme Court, a process that could take years. 

The motions last month prompted a flurry of objections from the assistance program’s many supporters — from the state-sanctioned ratepayer advocate to clean energy advocates like the Sierra Club, who called the complaint over a $20 annual fee “shameful.” 

And while these stakeholders looked to the North Carolina Utilities Commission to deny the industrial group’s bid to postpone the initiative, they also hoped the manufacturers’ better angels would prevail. 

Perhaps they did.

Christina Cress, the attorney for the industrial group, declined to comment, citing a pending rate case for Duke Energy Carolinas. But she wrote to regulators Thursday that her client would withdraw its request to appeal and delay the bill assistance. 

In exchange, Duke agreed to track the program’s costs and benefits and other metrics. The utility and other stakeholders would also “explore … how to identify and implement programs” that maximize existing strategies to help low-income customers, such as weatherization.

Stakeholders also pledged not to try to change or extend the three-year pilot program such that non-residential customers would be charged for it on a per-unit-of-electricity basis. 

When the industrial group’s challenge is withdrawn as promised, the customer assistance program can proceed apace in Duke Energy Progress territory. The same initiative could be approved for Duke Energy Carolinas in a ruling expected next month. In all, 124,000 of the state’s lowest-income households are expected to benefit.

N.C. industrial group will drop challenge to Duke Energy low-income assistance program 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.

A powerful consortium of pulp mills, pipe foundries and other manufacturers has moved to block an aid program for Duke Energy’s poorest residential customers — provoking dismay among the clean energy advocates who had championed it. 

Set to begin early next year, the Customer Assistance Program would give a $42 discount for 12 months to customers struggling to pay their electric bills, more than offsetting coming rate hikes. Large industrial customers would help pay for the program with a $1.70 monthly fee.

The Utilities Commission this summer greenlit the initiative for Duke Energy Progress, covering eastern and parts of western North Carolina, and had been expected to do the same for Duke Energy Carolinas. Some 124,000 households were predicted to benefit. 

But in a pair of Oct. 17 filings, the Carolina Industrial Group for Fair Utility Rates claimed regulators lacked authority to order the program and said it violated the principle that one class of customers shouldn’t subsidize another.

Pending an appeal to the state Supreme Court to overrule the program that could take years to resolve, the industrial group asked the Utilities Commission to delay it.  

“No party to this proceeding would be prejudiced by entry of a limited stay of the Order,” the industrial group said in its motion. 

In a flurry of responses filed this week, numerous parties said otherwise. 

“Staying implementation of the [program] while the matter is appealed could result in irreparable harm to otherwise eligible low-income ratepayers,” wrote Robert Josey, an attorney with Public Staff, the state-sanctioned customer advocate. 

And in a press release, a chorus of advocates including the state NAACP and the North Carolina Housing Coalition said it would be “shameful” if factories with monthly bills in the tens of thousands of dollars toppled the program over a fee that amounted to a rounding error.

“While large industrial and manufacturing customers are up in arms about an additional $1.70 a month, there are people all across our state struggling to keep the lights on,” said Mikaela Curry, field manager with the Sierra Club. 

The notion that no one would be negatively impacted by the program’s suspension caused special alarm. 

“It’s just not true,” said David Neal, senior attorney with the Southern Environmental Law Center, in an interview. “Tens of thousands of people would be prejudiced. It would be dreadful.” 

‘Misguided and irrational’ 

Beyond its potential harm to low-income families, Neal says the industrial group’s legal challenge doesn’t make financial sense: It could easily cost more than its members’ $1.70 monthly charges. “It’s misguided and irrational,” he said.  

Manufacturing customers will already see lower rate hikes than other customer classes, advocates pointed out to the commission. While Duke requested residential increases in the 20% range, they proposed 11% for some of their largest industrial customers.

Far from representing a cross-class subsidy, the $1.70 fee is most likely a bargain for large customers, who would otherwise chip in for unpaid bills from disconnected residential accounts. 

“There’s great evidence in the record that it’s going to reduce the amount of bad debt otherwise recovered from all customer classes,” Neal said. “If you didn’t have any contribution from industrial customers, they would be getting a benefit without having paid the cost.” 

He also dismissed the idea that the Utilities Commission needs explicit direction from the state legislature to implement the program. 

For one thing, a 2021 law allows the panel to consider whether multi-year rate increase applications — such as that submitted by Duke — reduce low-income energy burdens. What’s more, Duke Energy Carolinas has run a much smaller assistance program for older, low-income customers since 1978, and the General Assembly has never objected.  

“The idea that there’s something unlawful here,” Neal said, “doesn’t fit with the commission’s broad authority to set rates that are in the public interest and fair and reasonable.” 

Still, the industrial group’s appeal, which the Republican-controlled state Supreme Court must hear by law, has high stakes. “They’re saying the commission does not have the authority to ever institute a low-income bill payment assistance program,” Neal said. “That’s really aggressive.” 

‘Good corporate citizens’? 

The members of the Carolina Industrial Group for Fair Utility Rates are not publicized, but they originated with the pulp and paper industry and are separated according to which utility serves them.

While the Duke Energy customer groups have formed alliances with clean energy and low-income advocates before, executives at the prominent member Charlotte Pipe and Foundry Company have also denied climate science and decried renewables.

Christina Cress, the attorney representing the group’s entities before the Utilities Commission, declined to comment for this story, citing the pending case for Duke Energy Carolinas.

For now, consumer and clean energy advocates are looking to regulators to save the customer assistance plan.

“This program has the support of the public staff, Duke Energy, the utility commission, and advocacy groups across the state,” said Reggie Shuford, the executive director of the North Carolina Justice Center, in a release. “It should not be derailed by a group of faceless corporate entities.” 

But Neal also holds out hope that the industrial group itself will reconsider its decision and reverse course.

“I really believe that most industrial customers in North Carolina want to be good corporate citizens,” he said. “If they really looked at this, they would be happy to pay $1.70 knowing that they’re contributing to something that improves the lives of the people of this state.”

He added, “that’s why I’m hopeful that there’s a path forward.”

Clarification: This story has been updated to remove a reference to a member of the Dominion Energy customer group. The Carolina Industrial Group for Fair Utility Rates is divided into separate organizations based on utility territories, and the company named in an earlier version of this story is part of a division not involved with the challenge.

N.C. manufacturers move to abolish Duke Energy customer assistance program, dismaying advocates 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.