Duke Energy's wins at the state Utilities Commission are holding back necessary climate progress • NC Newsline (2024)

• Progressive Voices

And it’s time for the public to know more about these contests and to speak up

Over the last two years, Duke Energy has won four cases at the North Carolina Utilities Commission (NCUC), which regulates utilities in accord with state law. The utility’s victories were related to the carbon plan, net metering (NEM), and rate hikes. Overall, these four NCUC decisions have slowed progress toward creating a renewable grid in our state.

What’s more, news coverage and public knowledge of the four cases — known as “dockets” at the commission — was and is very low. Though the cases are already decided, North Carolinians should know what happened, and be prepared to get involved in future efforts to reduce Duke Energy’s influence over state energy policy.

The first Duke Energy victory was in the carbon plan docket. In October 2021, state lawmakers and Governor Cooper enacted House Bill 951, which required the NCUC to “take all reasonable steps” for the state to reach net zero carbon dioxide (CO2) emissions in the utility sector by 2050. Despite the passage of HB 951, however, Duke is planning a fracked gas expansion of up to 11.7 gigawatts (GW) by 2050. An NCUC decision in December 2022 encouraged this behavior by allowing plans for two GW of new fracked gas.

Alarmingly, the NCUC failed to scrutinize Duke Energy’s highly questionable promise to transition all fracked gas plants to green hydrogen by 2050. At present, there are zero 100% hydrogen-burning plants in the world. By blessing such a scheme, the commission allowed Duke to exploit a loophole in HB 951 wide enough for new fracked gas plants to pass through.

The NCUC order also permitted Duke to spend $72 million on the development of nuclear energy via so-called “small modular reactors (SMRs)” by 2024. The regulatory body seemed unphased by its own order which stated that “Duke acknowledges that [SMRs] are not a mature technology.”

Green hydrogen and SMRs both lack what’s known as a “levelized cost of electricity” (LCOE) — the accepted measure for pricing energy sources. According to state law, the NCUC should only consider “least cost” policies, rather than unproven sources for which costs are largely unknown.

Duke Energy’s second win was in the net metering docket. Before March 2023, a net metering (NEM) policy called “full retail rate” had encouraged 43,000 households in North Carolina to install solar panels. Basically, this meant that these customers saw their electric bills reduced by the amount of energy their solar panel returned to the grid. Threatened by loss of revenue and customers, Duke launched an effort to slow down the growth of independent solar.

Specifically, the utility asked the NCUC to impose a $22-28 monthly fee on solar customers and bring an end to full retail rate NEM. Grassroots groups responded with the Save NC Solar campaign, which organized rallies, workshops, and submitted 3,000 comments to the NCUC.

Critics were particularly concerned by the NCUC’s failure to conduct an independent cost-benefit study of the changes to NEM. Such a study was a requirement under state law enacted in 2017 via House Bill 589. Instead, the NCUC delegated the study to Duke, guaranteeing a huge bias. A co-author of HB 589, former Rep. John Szoka, confirmed the importance of an independent study, stating, “It’s not up to the utility to determine whether net metering is good or bad… We’re not putting the fox in charge of the hen house here.”

The NCUC approved Duke Energy’s NEM proposal in March 2023, ordering a shift to modified NEM and “time-of-use” (TOU) rules. The complex nature of the new rules makes it difficult for solar installers to model return on investment for new customers.

The third and fourth wins by Duke Energy came from rate hike dockets. The NCUC approved three-year rate hikes in August 2023 and December 2023. Duke Energy Progress got a 11.3% rate hike, while Duke Energy Carolinas won a 14.6% increase, handing the utility more than $1 billion in new revenue.

In 2022, the year prior to the rate hikes, Duke Energy’s net income was $2.5 billion and CEO Lynn Good’s compensation was $21.4 million.

Duke Energy won the right to request for multi-year ratemaking with the passage of HB 951. Achieving multi-year ratemaking had long been the utility’s “No. 1 priority.” Sen. Paul Newton (r-Cabarrus) was reportedly crucial to this victory for Duke Energy. Prior to his political life, Newton was a 25-year Duke Energy Carolinas employee who retired as company president in 2015.

Unfortunately, the rate hikes subsidize a pattern of wasteful spending. Duke Energy spent $10 million on lobbying and donations in the 2022 election cycle and, as noted above, the utility can now spend $72 million on dubious SMR plans. There is also concern that billions could be wasted on transmission and fracked gas projects.

Wins by Duke Energy in the carbon plan, net metering (NEM), and rate hike cases at the NCUC have been major setbacks in efforts to fight the climate crisis in North Carolina. An alliance of many state lawmakers, the NCUC, and the utility itself have proved difficult for grassroots opposition to overcome.

There is a pressing need for increased media coverage and public awareness of Duke Energy’s activities at the NCUC. If that can be accomplished, the state will be in a better position to create a genuinely renewable electric grid in North Carolina.