NC WARN’s expert witness says regulators should reject billions in grid “improvements” and unapproved gas expansions that maximize costs and climate pollution
A prominent energy engineer is contesting Duke Energy Carolinas’ request for billions of dollars in rate increases, showing in written testimony that the corporation is trying to pad investors’ pockets through pre-approval of grid projects that are either unneeded or could be better handled with solar-plus-storage investments. In addition, he shows that Duke has been quietly building new gas-burning capacity at existing coal-fired power plants in a way that maximizes both greenhouse gas emissions and the cost of the electricity.
This is a two-pronged outrage. And Duke plans to do more of both unless regulators stop them.
San Diego’s Bill Powers, a Duke University-trained engineer with 35 years of experience with electric power production and clean energy, is testifying for NC WARN that both the grid scheme and gas additions should require open scrutiny by the Utilities Commission and other interested parties prior to construction. The proposed grid “improvement” plan – which Duke hopes to scale up to at least $13 billion over time – has repeatedly failed to gain regulatory, legislative or public support since 2016.
Meanwhile, Duke has been building the large “dual-fuel” gas projects at its Cliffside and Belews Creek coal-fired power plants under the radar, and plans to do more at Belews, a facility in Stokes County. Duke is spending hundreds of millions to allow the option of having gas heat the steam boiler now fueled by coal. As Powers explains, such generation is even less efficient than burning coal, causing much higher gas usage to generate the same power as in modern gas-fired plants, higher greenhouse gas emissions than burning gas in modern plants, and the highest priced electricity on Duke’s system except for short-term generation from peaking power plants.
If Duke were building an entirely new gas plant, it would have to prove it’s the least cost option, which it clearly is not. But since the projects are adding gas-burning capacity to existing plants, Duke side-stepped the attention that a formal review would bring. Duke executives’ priority seems to be justifying the need for their failing Atlantic Coast fracked gas Pipeline project.
Key points in Powers’ testimony:
- Duke Energy told investors that a primary objective of the grid plan is to increase shareholder value by accelerating the tempo of capital projects.
- For the grid and gas expansions, there has been no formal Commission process to probe whether the alleged benefits are real, whether the benefits justify the costs, and whether alternatives could achieve the same objectives at less cost.
- Duke provides little if any support for its claims that the grid billions would benefit customers. Its approach to the regulators is more akin to a PR campaign.
- Duke wants to bury certain power lines that are now overhead in order to reduce outages, at a cost of more than $2 million per mile, when the same end could be achieved for $300,000 per mile by putting battery storage in every home along those same routes.
- As determined by a recent study for the California utilities commission (and applicable to NC), “the addition of battery storage with rooftop solar would negate the need for progressively more expensive grid optimization upgrades … battery storage is projected to rapidly become a standard industry practice.”
- Despite Duke’s claims, very large amounts of rooftop solar could be added to Duke’s system with little or no grid enhancements.
- Duke Energy has spent $148 million on natural gas conversions at Belews Creek and Cliffside that could have been avoided – with the coal units potentially mothballed – by simply allowing existing solar facilities to add battery storage at their own expense (instead of opposing that move) in return for reasonable payment for the value of the storage capacity.
- There is an enormous amount of underused hydro and gas-fired capacity adjacent to (and possibly more within) Duke territory that could be used instead of building more gas generation.
In this rate case, Duke Energy once again claims it wants to prepare the power grid for a future of distributed renewable energy (at homes, buildings, parking areas, etc.). However, Duke’s own 15-year plan shows that the corporation will increase renewables to only 8 percent of its total generation in the Carolinas – which is less than the current national average. Instead, Duke projects to build nearly 12,000 MW of gas-fired generation, which apparently doesn’t include the thousands more MW in “gas at coal plant” projects.
National evidence shows that most of the grid work Duke proposes wouldn’t help get us to a distributed energy future anyway. Instead, Duke wants high-dollar projects that raise rates but aren’t needed.
Advances in renewables, paired with battery storage, are set to leap-frog all that grid expense, and it’s a faster, cheaper and better way to get to a distributed and more resilient energy system. We should be equipping buildings and homes with solar-plus-storage instead of pouring billions into an electricity grid and gas system that are both moving toward obsolescence.
Finally, Duke Energy appears to be seeking pre-approval of future grid investments, a major change in state law that NC WARN is vigorously opposing.
Bill Powers will testify at the Utilities Commission’s evidentiary hearing that begins on March 23.