By Daniel Tait
Duke Energy is attempting to win major concessions from North Carolina lawmakers on an energy bill that would fundamentally change the state’s regulatory landscape, setting up a potential veto showdown with Governor Roy Cooper, and a battle with some of the state’s largest employers. The draft bill, House Bill 951, falls short of Cooper’s calls for 70% decarbonization of the power sector by 2030 and could raise customer bills by as much at 50% by 2035, largely due to provisions favorable to Duke Energy and the bill’s provisions to limit the North Carolina Utilities Commission’s oversight of Duke’s spending.
The bill did not include a provision that the Legislature had recently considered to study market reforms that would introduce greater wholesale electricity competition and a regional transmission organization (RTO) to North Carolina. A Duke Energy-funded group, Citizens for a Responsible Energy Future, recently ran ads attacking Republican politicians and large technology companies who supported the effort to study that reform. A study by Energy Innovation, GridLab, and Vibrant Clean Energy found that creating an RTO in the South, in which Duke would participate, could save customers as much as $348 billion by 2040. Duke has strenuously fought attempts to create, or even study, the potential for a Southeastern RTO in North Carolina despite having supported an RTO study bill in South Carolina.
The textile industry sent a letter to the General Assembly on June 16 stating its opposition to the bill, citing large rate increases as its chief concern. The industry instead called for the passage of House Bill 611, which would study RTOs and market reform efforts, saying it could “reduce customer costs and spark a new era of industrial growth.” North Carolina’s manufacturing industry representatives also opposed the bill.
Governor Cooper issued a statement in strong opposition to the bill, signaling he may veto the bill if passed in its current form. Cooper’s statement keyed in on potential Duke rate increases and what he viewed as an unacceptable weakening of the North Carolina Utilities Commission authority and oversight functions.
Duke Energy’s gas rush risks creating stranded assets
While the bill would close expensive coal plants which are running less frequently, it would direct Duke to invest in at least 900 megawatts (MW) and possibly as much as 3000 MW of new methane gas-fired power plants, via replacements of Plant Roxboro and Plant Marshall Units 1 and 2, at a time when some utilities are skipping gas altogether in favor of lower-cost alternatives.