Does the Tar Heel State’s Carbon Plan Make the Grade?
In 2021, the NC General Assembly passed HB 951, which directed the NC Utilities Commission (NCUC) to adopt a “Carbon Plan” that would reduce carbon dioxide (CO2) emissions from electricity generation 70% below 2005 levels by 2030 and achieve “net zero” CO2 emissions by 2050.Shortly thereafter, People Power NC, a coalition of environmental justice, climate, and clean energy advocacy nonprofits, published 12 Principles for a Carbon Plan in the Public Interest. The NCUC instructed Duke Energy to draft a plan, which it published in May 2022. We published a second report that graded the Duke draft against our 12 principles. Duke’s draft plan received an F.
The NCUC issued an order containing the state’s first Carbon Plan on Dec. 30, 2022, and this report grades that plan. Unfortunately, the NCUC gave Duke Energy essentially everything it wanted, virtually ignoring much more ambitious and achievable plans submitted by intervenors. The plan makes it nearly impossible to achieve NC’s 70% decarbonization goal by 2030. We must return a grade of D-.
Read on to learn how the NCUC has fallen short of meeting the 12 principles of a carbon plan in the public interest, and why the people of North Carolina shouldn’t give it a pass.
A carbon plan in the public interest should...
Be the responsibility of the North Carolina Utilities Commission
Grade:
D
Comments
The NCUC has elected to essentially accept Duke Energy’s version of a carbon plan, despite more comprehensive and accurate models and analyses. Duke Energy has a clear conflict of interest, and consistently chooses to favor profitability over ratepayer protection.
Center Stakeholder Feedback
Grade:
D
Comments
The NCUC solicited a great deal of stakeholder feedback, but centered almost none of it. They passed the responsibility to Duke to facilitate three stakeholder meetings, conduct outreach to Environmental Justice stakeholders, as well as conduct technical subgroup meetings with stakeholders. Duke’s engagement process, especially around engagement with environmental justice stakeholders, was deficient.
Establish Comprehensive Metrics for Success
Grade:
D
Comments
Duke Energy provided only the most basic metric for success in its first carbon plan proposal: calculating the amount of carbon dioxide emissions they must reduce to meet the goals established in HB 951 — and of the four portfolios they presented to the NCUC, only one even achieved that goal. Unfortunately, the NCUC ignored widespread stakeholder feedback asking for additional metrics on all greenhouse gas emissions, environmental justice outreach, or Duke’s interim progress toward these goals. As a result, it will be difficult for ratepayers to understand if their dollars are being used in the most timely and effective way to meet the goals of HB 951 and to offer feedback on progress.
Reflect Work from the Previous Clean Energy Plan Process
Grade:
F
Comments
Duke Energy’s plan received an F on this principle and the NCUC did nothing to improve its grade, since it did not incorporate additional work from the Clean Energy Plan process.
Maximize Near-Term Deployment of Renewable Resources and Storage
Grade:
F
Comments
The paltry amount of renewables in the NCUC Carbon Plan is less than the amount in Duke Energy’s Carbon Plan proposal portfolios. The NCUC’s approach of specifying and ordering only near-term addition of renewables at this time lacks long-term vision, direction, and specificity, and dilutes Duke’s resources.
Set an Ambitious Timeline for Closing Coal
Grade:
F
Comments
It’s a failure that the NCUC did not call for coal retirement beyond what Duke proposed in their draft plan. Retirement of Duke’s coal generation fleet is a critical step in the path to compliance with the 2030 carbon reduction target set by HB 951. In the next iteration of the carbon plan in 2024, the Commission should direct Duke to accelerate the retirement of remaining coal units to 2030 or earlier.
Allow No New Gas
Grade:
D
Comments
The NCUC has failed to meet the “no new gas” principle. It failed to show leadership to stop Duke Energy’s gas buildout and failed to adequately consider the comments, concerns, and suggestions of intervenors and the general public, who not only strongly opposed new gas but demonstrated in detail that gas is not needed to reach the state’s decarbonization targets. Duke must apply for permits to actually build the plants, and the NCUC indicated it will closely scrutinize those applications, requiring Duke to show that gas supply is adequate and that gas is still the least-cost option after accounting for clean energy incentives from the Inflation Reduction Act. Because there is still a chance to achieve our goal of no new gas, we give the NCUC a D. If some or all of Duke’s permits to build gas are rejected, the grade will improve; if not, it will slip to F.
Capture Maximum Benefits of Customer-Owned Resources
Grade:
D
Comments
The plan fails to compare demand-side programs to supply-side resources such as new gas or nuclear plants, making it impossible to determine the least-cost pathway to reduce carbon.
Lead to Fair and Affordable Rates
Grade:
F
Comments
In its Order, the NCUC acknowledges that “a significant percentage of [Duke Energy’s] residential customers in North Carolina face” a “magnitude” of affordability challenges. In fact, more than half a million households served by Duke, more than 15%, experience an ongoing struggle to afford their electric bills. Nearly one million households – 32% of Duke’s residential accounts – qualify as low-income. Given this, plus the Commission’s apparent concern for affordability, as expressed in the final hearing for the Duke Energy Low-Income Affordability Collaborative process, the Commission should have ordered Duke to incorporate any number of recommendations. Intervenors and stakeholders offered actions to directly address existing and future affordability challenges and impacts. Unfortunately, the Commission only barely acknowledged the problem, and did nothing to address it in the final Order.
Address Historic Harm from Fossil Fuels and Dirty Energy
Grade:
D-
Comments
Given the history of harm done to BIPOC (Black, Indigenous, People of Color) and frontline communities by the legacy of fossil fuels, the NCUC Carbon Plan should have outlined more deliberate steps to include new perspectives and leadership to create mutual benefit in our collective energy future. Unfortunately, this Plan allows Duke to continue skirting and ignoring executive orders that are designed to prioritize stakeholder input. The Commission is far too vague in its request for coordinated and inclusive input from impacted communities.
Build Climate Resilience
Grade:
F
Comments
By failing to set ambitious goals for energy efficiency and distributed resources, the NCUC Carbon Plan has missed a significant opportunity to reduce North Carolina’s vulnerability to climate impacts, both for individual electric customers and for the grid as a whole.
Identify & Drive Changes in State and Local Policies Necessary for Plan Execution
Grade:
D-
Comments
Despite the participation of several local governments on issues that include facility siting, energy efficiency, and electric vehicles, the NCUC’s Carbon Plan does not acknowledge the need for Duke to collaborate with state and local governments to fill policy gaps. The Order did direct Duke to do more robust electric vehicle planning in the next Carbon Plan, but it left key policy areas off the table entirely and did not direct Duke to work with state and local governments.