Q&A: NC regulators listen as they draft a plan to cut CO2 emissions
Public hearings in Asheville Wednesday night and Charlotte Thursday night will give people a chance to comment on how North Carolina should reduce carbon emissions from power plants to fight climate change. Gov. Roy Cooper and the legislature agree on the goals, but there's a big fight over the details. WFAE climate reporter David Boraks talked with host Marshall Terry.
Marshall Terry: So, give us some background here. What are these hearings all about?
David Boraks: They're about coming up with a way for North Carolina to limit greenhouse gas emissions from the energy sector. Energy is the state's second-largest source of carbon that causes climate change — after transportation. The state wants a 70% cut in emissions by 2030 and carbon neutrality by 2050.
Last year's North Carolina energy reform law was a compromise between Democratic Gov. Cooper and the Republican-controlled legislature. It calls for a faster shift away from fossil fuels like coal and gas… and toward clean energy. And, it orders state regulators to draft a carbon reduction plan by Dec. 31. The state utilities commission set up a year-long process that includes written comments and these hearings this week. They actually started two weeks ago in Raleigh and Wilmington and now in Asheville and Charlotte.
Terry: This law mainly affects Duke Energy, the state's largest utility, also a WFAE underwriter. What does Duke Energy want?
Boraks: Duke submitted its draft carbon plan in May. In a nutshell, Duke would like to see a gradual shift away from coal and gas — something that protects its existing investments and offers Wall Street investors some predictability. The plan offers four different paths for closing remaining coal-fired power plants by 2035, reducing energy use and shifting to renewable energy. But Duke also wants to add more natural-gas-fired power plants and new technologies like small nuclear reactors. Only one of those scenarios would actually meet the 70% by 2030 goal. The other three would take two to four years longer.
Terry: How are people reacting to Duke's plan?
Boraks: From Duke's point of view, the reviews haven't been good. Companies, environmental groups and climate justice groups worry that Duke's plans are too expensive and rely too heavily on new natural gas plants and not enough on solar and other renewables. Some, including Walmart, say it will keep them from meeting their own climate goals. Several groups hired consultants to draft alternate plans that take a far less conservative view of renewables. Four groups — the North Carolina Sustainable Energy Association, the Southern Alliance for Clean Energy, the Sierra Club and the Natural Resources Defense Council — hired a consultant named Synapse to rework the numbers. Peter Ledford is policy director with the North Carolina Sustainable Energy Association
Peter Ledford: When we first saw Duke's carbon plan a couple months ago, we believed the requirements of the legislation could be met cheaper, and with more renewable energy. And, Synapse was able to do its own modeling and confirm that to be the case.
Boraks: Ledford says Duke started with an assumption that natural gas prices would remain low and that gas would be part of the plan. But gas prices have risen.
Terry: What did other groups have to say?
Boraks: In general, Duke's critics foresee a faster transition to solar and wind energy and battery storage. Some also call for more energy efficiency to reduce demand for electricity — and the need for more generating capacity. They're all plugging different numbers into computer models to try and meet that goal of a 70% reduction in greenhouse gas emissions by 2030.
Walmart is a huge Duke customer. Walmart said in its filing that Duke failed to justify the need for new gas plants, which although cleaner than coal, would continue to emit carbon for decades to come.
Big tech companies Google and Apple said Duke is too focused on keeping ownership and control of energy plants. They said that raises costs and reduces carbon too slowly.
The environmental group NC WARN and Charlotte NAACP complained in a joint filing that the plan doesn't include enough rooftop solar or battery storage.
Terry: What does this mean for customers? How will this plan affect ratepayers?
Boraks: Back in May, Duke Energy warned that its various scenarios would require annual rate increases averaging 1.9% to 2.7% over the next 13 years. As I said, many of Duke's critics think it can be done more cheaply. Activist William Barber III says regulators need to keep clean energy and lower cost in mind.
William Barber III: We have to act intentionally and pay heed to the opinions, the voices of communities that have too often been impacted, to ensure we're acting quickly, but we're acting with correct intention in bringing them along.
Terry: What does Duke say ?
Boraks: Duke officials say they've worked with many stakeholders to draft a plan that meets last year's energy reform law. When Duke introduced its plan in May, I talked with the company's regulatory affairs and policy director, Kendal Bowman.
Kendal Bowman: We're trying to get to this carbon reduction, which benefits everyone. But, we're doing it under those fundamental principles of affordability while ensuring reliability.
Boraks: Duke says it needs natural gas now, because wind and solar energy are variable and storage remains expensive.
Bill Norton (Duke Energy spokesperson): Wherever feasible, our plan has significant energy storage to provide this backup. In fact, all but one of our portfolios has more storage than gas. But gas still has to play a complementary role until storage costs come down further.
Boraks: And Marshall, when we talk about storage, we mean building-sized battery arrays that can store electricity for use when solar and wind farms aren't operating. It's something Duke has begun using in the past couple of years.
Terry: Is the utilities commission likely to give Duke what it wants?
Boraks: It's up to the commission to draft the final plan. And there's still a big gap between what Duke wants and what businesses, environmentalists and citizens groups want. In a filing last week, Duke identified more than 130 points of dispute. Given the lack of consensus, Duke says it wants to hash out all the differences in a full courtroom-like hearing with testimony by expert witnesses. That's expected to happen in late September.
For more about the carbon plan process and how to participate in the public hearings, visit https://www.ncuc.net/Consumer/carbonplan.html.