By John Downey
Duke Energy Corp. would achieve many of its most-sought regulatory reforms, including multiyear rate plans and performance incentives that could increase its revenue, under legislation proposed Tuesday in the N.C. General Assembly.
The text of House Bill 951 specifically acknowledges the bill “is generally consistent with the electric public utilities’ current integrated resource plan” even as Duke’s IRPs are being hotly contested by interest groups ranging from high-tech customers to environmental groups.
In at least two cases, the bill would mandate the construction of natural gas plants to replace retiring coal plants — one of the most controversial proposals in Duke’s long-term plant construction plans.
The bill is also notable for what is not in it. There are no provisions for a proposed study of structured, more competitive markets — such as regional transmission organizations and independent systems operators — which Duke has strongly opposed.
“Duke did a lot of the writing here,” says Kevin Martin, executive director of the industrial group Carolina Utility Customers. “I can’t think of anything (in the bill) that Duke opposed.”
Martin was part of the stakeholder group made up of Duke, industrial and manufacturing interests, solar industry representatives and the N.C. Sustainable Energy Association that the General Assembly convened to help shape the long-anticipated energy legislation.
Martin says it was a good process, with everyone allowed to state their proposals and concerns. But he is not happy with the final product. He said North Carolina is missing an opportunity to consider market reforms that would save customers money and produce electricity more efficiently.
He cites Nova Energy Consultants Kevin O’Donnell’s calculation that the bill’s provisions and the proposed IRP would translate into a 50% increase in rates over a decade.
“We are realistic and we understand that a zero rate increase over 10 years is irresponsible,” Martin says. “But 50% rate increases are also irresponsible — they are greedy.”