NC WARN’s initial comments on Duke Energy’s latest 15-year plan
If the NC Utilities Commission approves Duke Energy’s latest 15-year Integrated Resource Plan, it risks bankrupting North Carolina’s economy through costly overbuilding of high-risk power plants. And the utility will continue fouling our air and water while escalating the global climate crisis as one of the world’s largest carbon polluters.
While continuing its work with the Koch brothers to inhibit the growth of renewable power, Duke Energy’s proposed massive investment in new fracked gas infrastructure will – if successful – further exacerbate the recent surge in global warming caused largely by super-potent methane leaking throughout US natural gas operations.
Below is a summary of our comments filed Friday with the NC Utilities Commission. (NOTE: NC WARN will soon publish its updated Clean Energy Path proposed for NC.)
Duke Energy’s business model in its monopoly service area is to prevent competition, build power plants that are not needed, and force customers to pay for them through increased rates – all while controlling state government and public debate. In its latest 15-year plan, Duke continues to ignore profound changes in the electricity marketplace, and ignores the external costs of its choices, such as polluting our air and water while harming communities worldwide by fueling the worsening climate crisis.
EXAGGERATED FORECASTS FOR ELECTRICITY USAGE: Claiming electricity usage always keeps growing is a staple of Duke Energy’s business model and has always been rubber-stamped by state regulators. This fiction perpetuates the construction of power plants – regardless of their need – and ever-rising customer rates. Duke Energy admits that per customer usage of electricity has been flat to negative, but baldly claims it will greatly increase over the next 15 years.
15-20 NEW FRACKED GAS-BURNING PLANTS: Duke Energy’s increasing dependence on shale gas is troublesome because of the likely future cost increase from a limited fuel supply, and because leading scientists say methane spewing into the air from natural gas infrastructure is a key factor in the ongoing, 3-year global heat wave.* While blocking debate on those critical issues, Duke offers a 15-year forecast calling for more and more plants that would burn fracked gas.
NEW NUKES STILL PLANNED DESPITE COLLAPSE OF WESTINGHOUSE: Duke Energy’s 13-year effort to license and build nuclear reactors to serve the Carolinas essentially collapsed with this month’s announcement that Toshiba-Westinghouse is exiting the nuclear construction business due to the economic failure of plants presently under construction.
Duke Energy’s 15-year plan, filed in October, forecasts completion of the proposed Lee Station nuclear reactors in 2028. Duke has spent $529 million in “development costs” for Lee, with no viable path forward to begin construction. The Westinghouse collapse knocks a hole in Duke’s business plans.
“KEEP BUILDING PLANTS!” DESPITE REGIONAL GLUT: There is no justifiable reason why state regulators should allow Duke Energy and other Southeastern utilities to continue building power plants instead of sharing a huge excess of power that’s available throughout the region. Such sharing is encouraged, but not required, by federal regulators.
The utility reserve margin is designed to ensure adequate generation in case one or more of Duke’s plants are out of operation during the hottest day or coldest night. Some US industry officials say 10% is an adequate reserve. Duke’s forecasted reserves from 2016 to 2031 range to 27% above peak usage levels; that assumes one of every four power plants would be broken down even during a period of highest customer usage. For neighboring utilities, projected reserves range mostly between 20 and 32% over the next 15 years, but one of the largest forecasts up to 45% of excess capacity over the same period.
So, while dozens of power plants all around us sit idle much of the year, Duke continues to build new plants and raise rates – thanks to monopoly protection and control over state government.**
STILL A LAGGARD ON RENEWABLES AND ENERGY SAVING: CERES’ 2016 national ranking of Duke Energy as among the nation’s worst adopters of solar and wind power flies fully in the face of Duke’s corporate PR in the Carolinas. In the official 15-year plans, Duke reports that, in 2015, it produced less than 1% of the energy it sold in the Carolinas from renewable energy. Duke claims it will increase renewables to a (very weak) 6% in 2031, but fails to outline how it will get there – even as it aggressively works to limit renewable energy with various regulatory and legislative initiatives.
The cost of renewable energy, especially solar, continues to decline, but Duke Energy fails to evolve with a changing future in which utility-scale solar and wind are more cost effective than natural gas and other conventional generation technologies.
For energy efficiency, Duke remains at 1% of total generation for the Carolinas in 2017. Its 2031 projection increases to just 3% of the total energy mix. This won’t move North Carolina out of 30th place in state rankings by the American Council for an Energy-Efficient Economy.
THE NEED FOR REGULATORY INDEPENDENCE: NC WARN remains critical of the NC Utilities Commission. The 15-year planning process increasingly lacks transparency and honest information made available to the ratepayers and members of the general public. The Commission appears to be locked into Duke Energy’s forecasting methodology, while consistently refusing to hold evidentiary hearings that would allow for expert testimony and cross examination in IRP proceedings.
The planning process should be a time when the Commission and all interested parties review the utilities’ plans carefully and holistically. If this does not happen, the cycle of more and more costly overbuilding will continue, renewable energy will be given short shrift, and Duke Energy will continue as a prominent driver toward runaway climate chaos.
*See, for example, Cornell researchers during the first 12 minutes of this December press conference.
**See the excellent, comprehensive article on power industry utility-regulatory corruption by the Los Angeles Times’ Ivan Penn, which largely parallels North Carolina’s situation: “Californians are paying billions for power they don’t need.”
