Duke's Energy Plan Fails the Carolinas

Every two years, Duke Energy Progress and Duke Energy Carolinas each develop an integrated resource plan (IRP) that lays out a resource roadmap to guide the utilities over the next 15 years.

 

A diverse coalition of conservation, clean energy and community organizations representing the people of North and South Carolina assessed Duke’s 2020 IRPs. The IRPs were graded in 10 categories that reflect 10 principles of an IRP in the public interest. Duke received failing or near-failing grades in all 10 categories.

SUMMARYFULL REPORT

Duke's IRPs fail to make the grade for serving the people of the Carolinas.

Duke’s IRPs don’t adequately address climate change or reduce ratepayers’ energy burdens.

Instead of choosing cost-effective, healthy clean energy, Duke proposes to build 9.6 GW of new fossil gas and delay gas plan closures.

With COVID-19 driving economic devastation in the Carolinas, families are struggling to pay their bills. But Duke’s IRPs propose to significantly increase ratepayers’ bills.

Read on to see Duke’s grades across 10 categories.

DEP = Duke Energy Progress
DEC = Duke Energy Carolinas

GET REAL WITH CLIMATE GOALS

GRADE:

D

What Duke should do

Duke Energy’s IRPs should adhere to North Carolina’s climate goals, reduce actual greenhouse gas emissions 70% by 2030 and entirely eliminate fossil fuels from its fleet by 2050.

Key Findings

  • Duke fails to reduce carbon pollution in an aggressive manner and does not present viable plans to adequately mitigate their contribution to climate change.
  • Duke ignores North Carolina’s climate goals to reduce the electric power sector’s greenhouse gas emissions to 70% below 2005 levels by 2030 and attain carbon neutrality by 2050, nor does Duke plan to eliminate fossil fuels from its fleet by 2050. By 2035, at least 35% of its energy resources will continue to come from fossil fuels.
  • The IRPs also lay out two scenarios that reduce CO2 emissions 70% below 2005 levels by 2030; however, these scenarios are seriously flawed by inflating costs, limiting abundant and affordable clean energy solutions and baselessly claiming that it couldn’t meet these goals without “policy support” and hypothetical technologies.

AFFORDABLE ENERGY FOR ALL AND EQUITABLE ACCESS TO CLEAN ENERGY

GRADE:

F

What Duke should do

Duke must take proactive steps to reduce the short- and long-term energy burden of its customers, especially low- to moderate-income customers, and provide arrearage forgiveness and management plans to all customers facing mounting utility debt, exacerbated by the COVID-19 pandemic.

In addition to addressing affordability, Duke should also ensure that all families have equitable access to clean energy.

Key Findings

  • Despite the reality that by late 2020, nearly one-fifth of Duke customers, representing more than 490,000 households, were past due on their bills, owing more than $120 million*, Duke’s 2020 IRPs neglect to recognize the overwhelming problem of unaffordable energy burdens faced by hundreds of thousands of its residential customers.
  • The IRPs lack any real-world solutions to alleviate household energy burdens like energy debt management plans or more home weatherization for low-income customers. Instead, Duke glosses over the issue of affordability. It falsely claims that the utility “has a strong history of delivering affordable, reliable and increasingly cleaner energy to our customers.” In fact, Duke proposes monthly bill increases for its residential customers in all of the IRPs’ scenarios. 
  • Duke’s plans fail to break down barriers to clean energy for low-income households and do not offer any new home energy efficiency programs or cost-saving community solar programs targeted at low-income families.

* This represents only a 5% decrease in customers in arrears and a 13% increase in total arrearages compared to July 31, indicating that not enough is being done to help customers pay off their accumulated debt. 

DO ENERGY EFFICIENCY FIRST

GRADE:

D-

What Duke should do

Energy efficiency and demand response are the least-cost ways to meet the grid’s needs. Duke must maximize all energy efficiency options prior to building any new generation in order to keep costs low for all ratepayers and avoid unnecessary investment in higher-cost fossil fuel energy.

Key Findings

  • Duke fails to do the bare minimum and incorporate all cost-effective energy efficiency measures into its plan*, and it fails to model more impactful steps such as considering efficiency as an alternative to new generation assets.
  • Duke excluded its own research that showed additional cost-effective potential from energy efficiency. This exclusion enables a continued trend of declining savings to ratepayers.
  • Duke plans to increase its use of demand response and peak shaving but could do more to reduce the system peak. Duke states that additional winter peak demand savings could be achieved cost-effectively, but they chose not to include it in the forecast, simply stating that it is “premature.”**

* Page 171 of DEC Plan
** Page 36 of DEP Plan

DITCH COAL

GRADE:

D+

What Duke should do

Duke’s coal plants are already uneconomic and costing ratepayers billions*. They must be shut down now, for the benefit of our wallets, our health and our climate.

Duke’s IRPs should accelerate retirement of all coal plants, close half of its coal fleet by 2025, achieve coal-free energy by 2030 and include support for just, community-led transition plans for coal plant communities.

See more about about how operating coal plants costs more than building new alternatives in Energy Innovation’s report The Coal Cost Crossover.

Key Findings

  • Duke’s coal retirement analysis methodology presented in this plan is flawed. It has included faulty assumptions that needlessly skewed the analysis to delay the retirement of its coal plants.
  • Duke does not include any firm commitments of coal plant retirements in its IRPs. In fact, Duke may even intend to increase its use of coal in the event that fossil gas prices spike or there are supply chain issues, despite renewable energy and efficiency already being the least-cost options.
  • Furthermore, Duke includes no transition plans for the workers and the communities impacted by coal plant closures. As an example, APS in Arizona recently proposed $144 million to finance the economic transition of communities impacted by the shuttering of its coal plants. It is clear Duke needs to do more and is not taking seriously its responsibility to move away from coal.

NO NEW GAS

GRADE:

F

What Duke should do

Duke needs to stop all new gas investments and minimize the risk of uneconomic assets on their system.

Firstly, Duke does not need to build any new fossil gas plants or infrastructure. Renewable energy and energy efficiency can meet reliability needs more cost-effectively while reducing bills, pollution and climate impacts.

Second, the combination of carbon dioxide and super potent methane released as a result of increased use of fossil gas will prevent Duke and North Carolina from meeting their climate goals, and it will lock North and South Carolinians into more fossil-fueled energy for decades.

Finally, many of these plants will be economically obsolete in a few years as solar and storage become cheaper than new gas plants.

Key Findings

  • All but one of Duke’s six scenarios in the IRP include a massive fossil gas buildout, with the base case including 10-13 new gas plants totaling over 10 GW of new capacity. The only no-new-gas scenario, in addition to extending the operations of dirty, expensive and aging coal, significantly inflates the costs of cleaner energy options, setting up a misleading choice between saving money or moving away from gas.
  • The IRP fails to include a scenario that models the no-new-gas trajectory that invests in least-cost options: energy efficiency and solar.
  • What’s more, Duke does not address emissions of methane, which is exponentially more potent than carbon dioxide. Duke currently ignores methane’s impact on its greenhouse gas emission targets since these emissions largely occur “upstream” or outside the Duke electricity system and outside the Carolinas.

GO BIG ON RENEWABLE ENERGY

GRADE:

D

What Duke should do

It’s now well established that solar is not only the cleanest but also the most cost-effective energy supply choice. A recent study showed that the Carolinas could boost renewable energy to 66% in North Carolina and 57% in South Carolina by 2035, all while decreasing costs to ratepayers.

Plus, we know that investing in homegrown, clean energy boosts the economy, provides cash to landowners and creates local jobs.

Duke should be “all in” on solar and other renewable sources, achieving at least 55% renewable energy by 2035.

Key Findings

  • Instead of going “all in” on low cost and clean solar to achieve at least 55% renewable energy by 2035, Duke’s base case with carbon policy proposes a paltry 15% target by 2035, a mere 8% increase from 2021.
  • Parallel to the IRPs, Duke hired the National Renewable Energy Lab (NREL) to model an optimized generation mix. Despite Duke’s instructions to limit some aspects of the model, NREL still showed 29-34% renewables by 2030, more than double what the IRPs propose*.
  • Instead of going “all in” on solar, the least-cost power generation source, Duke’s model restricts solar to only 500 MW/year, requires most of that new solar be combined with storage and limits the contribution of that solar plus storage to peak load. These restrictions falsely inflate the cost of solar, reduce its benefits to the grid and reduce the IRPs’ opportunities to achieve lower cost, clean energy. Therefore, all the IRPs’ scenarios are misleadingly expensive and needlessly reliant on fossil fuels.
  • Duke’s IRPs’ base case includes no wind energy, and the base case with carbon policy includes a mere 750 MW of wind which doesn’t even start until 2033. To justify excluding wind power, Duke claims that siting challenges make land-based wind not a viable option in NC**; however, Duke provides no evidence for this claim, nor does it explain why it can’t expand its use of wind from other states.
  • Duke includes no offshore wind in its base cases, even though other scenarios include as much as 2.65 GW of offshore wind by 2035. This despite the fact that North Carolina has the best offshore wind resource of any state on the Atlantic Coast, with the potential to power the state multiple times over.

* See page 14
** Page 197 of IRP

EMBRACE MARKET COMPETITION

GRADE:

D

What Duke should do

Recent research shows regional market competition could reduce electricity rates in the Southeast by 23%, saving ratepayers $17 billion per year or $384 billion by 2040.

Any new power generation should be acquired through a technology-neutral, competitive process that transparently weighs costs and benefits and considers all alternatives including clean energy portfolios of renewables, energy efficiency and demand response. This will ensure ratepayers are getting the lowest cost energy, regardless of the power source.

Key Findings

  • Instead of following best practices in the competitive, market-based procurement of energy, Duke claims it requires policy changes to do so. Duke has no plan to ensure that any new policies will be created to protect ratepayers from uncompetitive higher costs while also optimizing integration of low-cost clean energy.
  • Unlike many other regions, the Southeast is not part of a regional transmission organization (RTO). An RTO would operate the transmission grid and maximize efficiency across the system which could increase adoption of clean energy and energy efficiency while saving ratepayers $384 billion by 2040. In lieu of an RTO project, Duke is part of the “Southeast Energy Exchange Market” (SEEM) which delivers far less savings and adoption of clean energy, showing a lost opportunity. And even then it is not mentioned in the IRP.

DO GRID MODERNIZATION RIGHT

GRADE:

C

What Duke should do

Despite promises by Duke Energy, the ball has barely moved forward on a more modern, more distributed grid. With Duke proposing major updates to the grid and operations through its Grid Improvement Plan and Integrated System & Operations Planning, now is the time to expand the role of clean, distributed resources.

Duke needs to tap into customers’ distributed energy resources in its energy plan and allow customer-sited solar and storage systems to participate as a resource.

While Duke says their grid modernization efforts are a work in progress, Duke’s IRPs offer little that capitalizes on a modern, distributed grid.

Key Findings

  • Duke doesn’t include distributed energy resources or distributed storage as an option for its planning software to select in the process of building the most cost-effective grid.
  • Even though Duke’s Integrated System & Operations Planning (ISOP) isn’t complete yet, Duke does not offer any placeholders for how ISOP would interact with the current plan, suggesting either a) this plan will be outdated in 2022, or b) it doesn’t anticipate that ISOP will actually change any planning outcomes.
  • Duke mentions its Grid Improvement Plan in the section devoted to long-term decarbonization of the energy grid, but it’s not able to specify how grid modernization would meet that end or how much carbon it could avoid. Without these details, it’s not clear why these expensive upgrades are needed for decarbonization at all.
  • Duke wasn’t able to deliver on the advanced planning capacity that it initially promised. Despite what was said at the initial ISOP stakeholder meeting, this IRP does not include highly detailed load forecasts, nor does it integrate the suite of tools that form the EnCompass planning software.

DON’T RELY ON IMAGINARY TECHNOLOGY

GRADE:

F

What Duke should do

ZELFRs are nothing more than a way for Duke to continue to operate a fossil-heavy grid while waiting for a unicorn technology. We know we can reduce carbon emissions with existing technologies. Duke’s IRPs cannot rely on hypothetical technologies; we already have the tools we need to transition to a healthier, carbon-free energy future.

Key Findings

  • In Duke’s 2020 climate report, they coin a new term, “zero-emitting load following resources” (ZELFR), to describe an imaginary, zero-emissions, on-demand energy source that they claim to need in order to decarbonize the grid. Rather than use existing, proven renewable technologies, Duke is betting on the development of hypothetical ZELFR technologies. Duke is avoiding the simplest and least expensive path to net zero: energy efficiency, demand side management and solar and battery storage. Instead, it is promoting more fossil-dependent technologies that do not exist.
  • Some advanced technologies like green hydrogen may someday prove useful, but Duke does not need them to reach its net-zero goals nor its reliability requirements.
  • Duke is delaying investments in available renewables right now in favor of illusory ZELFR unicorn technologies. Duke must stop talking about ZELFRs and start investing more in solar, energy efficiency and demand response technologies that are zero-emitting and available now.

NO LOBBYING AGAINST THE PUBLIC INTEREST

GRADE:

F

What Duke should do

Duke should NOT fund nor lobby the legislators and regulators that are charged with overseeing their monopoly. Duke should immediately end all political spending to ensure that the company operates in the public interest.

Key Findings

  • In-depth analysis authored by the Energy and Policy Institute reviewed Duke’s political giving and found Duke Energy made at least $2.4 million in political contributions in advance of the 2020 elections.
  • The Duke Energy Political Action Committee Board of Directors decides which political candidates to donate to based on “Candidate Selection Criteria” that include specifically targeting candidates and public officials that serve as members of leadership or committees with jurisdiction over matters that impact the business. How can public officials remain neutral and unbiased in their duties if the utilities they need to oversee helped get them elected?

Endorsed by:

 

For media inquiries, contact:
Hilary Lewis
hilary@votesolar.org