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North Carolina Utilities Commission reaches Carbon Plan decision

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As we’ve reported before, the General Assembly adopted House Bill 951 in 2021, which required the North Carolina Utilities Commission (NCUC) to issue a Carbon Plan by the end of 2022.  The plan was required to provide a path for Duke Energy Carolinas and Duke Energy Progress to achieve a 70% CO2 emissions reduction by 2030 (relative to 2005 levels) and a 100% carbon neutral portfolio by 2050.  In drafting the plan, the NCUC was required to follow least-cost principles and preserve or improve reliability.  The NCUC conducted an expedited process to meet the statutory deadline that saw Duke propose four alternative pathways to meet the goals with different resource portfolios, opportunities for public comment, and an evidentiary hearing.  ElectriCities participated in that process, filing comments and meeting with NCUC commissioners, Public Staff, and other stakeholders.  ElectriCities emphasized the importance of flexibility in any plan in order to minimize ultimate costs of compliance, expressed concern about the costs of new transmission proposed by Duke that would be built before any concrete solar generation projects sought interconnection, and argued that the ultimate plan could not meet least cost principles so long as Duke discouraged cost-effective demand-side management by wholesale customers.

Just before the New Year, the NCUC issued a plan with something for almost everyone to both like and dislike.  The plan lays out a short-term, “least-regrets” path that directs Duke to:

  • Close 9 GW of coal plants;
  • Extend the licenses for its nuclear plants;
  • Pursue 2350 MW of new solar resources, 600 MW of storage tied to solar and 1000 MW of additional storage; and,
  • Evaluate new natural gas resources, off-shore wind, on-shore wind, and small-modular reactors.

The NCUC also found that Duke can move forward on some of its transmission plans.  Even as the NCUC directs Duke to implement the Carbon Plan, it emphasized repeatedly that the plan does not preempt Duke’s obligation to obtain a certificate of public convenience and necessity (CPCN) for any new generation and does not guarantee rate recovery for development expenses (except for nuclear), or for any particular resources.  Duke will continue to need to go through its Integrated Resource Plan process, the CPCN process, transmission planning processes, and rate proceedings.  The plan specifically calls for a progress review every two years, at which point the NCUC will have the opportunity to adjust the plan.

The plan has already been criticized by environmental advocates and solar developers on one side for not going far enough or fast enough to counter climate change and by the John Locke Foundation for going too far, an over-reliance on solar generation, and threatening reliability.  While ElectriCities is concerned about the additional costs the plan is certain to impose on wholesale customers, it is pleased that the NCUC has taken a wait-and-see position on most new resources, continues to impose the obligation on Duke to demonstrate that any new investments are cost-justified, and continues to emphasize the critical importance of reliability.  We will remain actively involved to protect the interests of public power and our communities as Duke moves forward to implement the plan.

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