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Q&A: NC regulators back Duke's 'all of the above' carbon plan

073122 Power Lines north meck.jpg
David Boraks
/
WFAE
State regulators decided not to order a specific energy plan for meeting the state's climate goals, but instead endorsed Duke Energy's multiple scenarios.

You can listen to the below conversation above; what follows is a transcript.

North Carolina's 2021 energy reform law called on state regulators to adopt a plan to cut carbon emissions from power plants to fight climate change. Last Friday, after months of filings and hearings, the North Carolina Utilities Commission issued a 137-page order. It largely accepted the recommendations of Duke Energy, the state's main power producer. WFAE climate reporter David Boraks joins "Morning Edition" host Marshall Terry to talk about what it means, for both the state's climate goals and customers. 

MARSHALL TERRY: Broadly speaking, what does this order do?  

DAVID BORAKS: I've just been reading it over the past couple of days and there's a lot in here about retiring coal fired power plants, building new gas-fired plants, adding solar and wind energy, battery storage … even exploring a new generation of small nuclear reactors. It's probably easier to say what it does not do. It doesn't explicitly adopt any specific plan, either one proposed by Duke or other groups that didn't like Duke's plans. So no long-term mandates for a certain amount of renewable energy such as solar or wind farms. That's controversial among critics of Duke Energy — who were hoping the commission would require Duke to move more quickly to adopt solar and wind. But the seven commissioners said in the unanimous order that the law doesn't require it to pick a single plan.

TERRY:  Are there any more specifics in the plan as far as Duke goes?  

BORAKS: It does require Duke to close its remaining coal plants by 2035. That's something the company previously promised to do. It calls for more energy efficiency planning to reduce demand for new power plants. And it authorizes Duke to continue planning for solar, wind and battery storage, and a hydroelectric dam project over the next two years. It also endorses Duke's plans for 14 transmission projects. That will make it easier to connect to new renewable energy projects. And it does let Duke begin planning for a wave of new gas-fired power plants. Overall I'd put it this way: The utilities commission basically gave Duke Energy the go-ahead to pursue multiple paths to meet the state's climate goals.


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TERRY: Remind us what those goals are and why is this happening now? 

BORAKS: That 2021 law, known as House Bill 951, ordered the utilities commission to adopt a plan by the end of 2022. It also wrote into law the state's climate goals: That's reducing emissions of carbon dioxide from power plants by 70% from 2005 levels by 2030, and to net-zero by 2050. Energy is the second-largest source of heat-trapping pollution that causes global warming, and Governor Roy Cooper has made it a key initiative of his administration.

TERRY: Did Duke get everything it wanted?  

BORAKS: Not necessarily. When Duke submitted its proposed carbon plan back in May, it offered four different scenarios. It added two more scenarios later on. Most of those would not meet the 2030 goal. The law allows regulators to put off that goal by a couple of years, which Duke asked regulators to do. But in last week's order, regulators said that's not appropriate right now. Basically - it's too early to give Duke an extension.

TERRY: Overall, how did Duke Energy respond to the filing? 

BORAKS: The company seemed happy with the outcome, especially the lack of a specific plan. Duke said in a statement “We believe this is a constructive outcome that advances our clean energy transition, supporting a diverse, ‘all of the above’ approach.

TERRY:  A lot of business, consumer and environmental groups opposed Duke's plans over the past seven months. What do they think of this order? 

BORAKS: They're mostly disappointed. I saw statements from a half-dozen groups with various levels of concern. Environmental groups don't like the idea of more gas-fired plants in the medium term, because those still produce heat-trapping pollution like coal plants — just less. They wish the commission had pushed Duke harder to meet the climate goals by 2030 and add renewables. Business groups have said they're worried Duke's gradual transition to renewable energy will keep them from hitting their own climate goals. And consumer groups say the order does not adequately address concerns about the rising cost of energy.

TERRY:  That actually prompts a question: What does this mean for Duke Energy customers and their monthly bills?  

BORAKS: This whole carbon plan process is supposed to go through 2030 and there's still a lot still to be decided .. so it's a little uncertain. But Duke has warned that shifting to cleaner energy will mean price increases. Back in May, the company said its various scenarios could push up energy prices as much as 35% over the next 13 years. So whatever happens, look for higher bills ahead.

TERRY:  On a related note, the utilities commission's order came out just days after Duke Energy customers across North Carolina saw rolling blackouts during a cold snap. Have we learned any more about that? 

BORAKS: A little bit, Marshall. Duke has blamed the blackouts on a combination of high demand and problems at generating plants. Experts outside the company who have examined Duke generating data say Duke badly underestimated demand. That, coupled with heavy energy usage all across the country, meant Duke didn't have enough power. It's interesting - regulators actually addressed the outages in the carbon plan order, calling them "sobering." The commission cited the incident as a reason why Duke will need to make sure it has replacement power available before it retires coal plants. Duke officials will answer questions from regulators about the blackouts at a meeting at 10 o'clock this morning.

TERRY: What happens now with the carbon plan?  Is that it? 

BORAKS: No, this is a multi-year process pointing to 2030. Duke will have to submit updated plans every two years and show what it's doing to meet the climate goals. This all begins again in September.

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Climate coverage on WFAE is supported by the 1earth and Salamander funds. 

David Boraks is a veteran journalist who covers climate change for WFAE. See more at www.wfae.org/climate-news. He also has covered housing and homelessness, energy and the environment, transportation and business.