Duke Energy and other utilities, particularly in the South, are pushing to add new natural gas plants like this Florida facility. (Photo by Glen Richard/iStock Images Getty Images)
Over the last few months, hundreds of North Carolinians turned out at statewide public meetings to express concern about what’s in Duke Energy’s current Carbon Plan proposal. Despite the data showing how risky and expensive gas is for customers, Duke Energy isn’t budging from its plans for one of the largest gas plant build-outs in the country. The stakes are extremely high, and the huge decisions that will be made in this case will impact every single North Carolinian.
In testimony the Environmental Defense Fund filed in North Carolina’s Carbon Plan proceeding at the NC Utilities Commission (NCUC), the conclusions are clear: investing as heavily as Duke is proposing in new gas plants is the risky route. Bringing clean energy resources — especially offshore wind — online more quickly and strategically to meet growing electricity demand in North Carolina is the better path.
Duke Energy is proposing to build 10 new gas plants in the next 10 years. That aggressive construction project comes with a high-dollar price tag, for which Duke will recoup all the costs from ratepayers and pocket a return of about 10 percent on top of that. It’s a perk Duke is entitled to by state law, and one that inevitably compels the company to build more and spend more because that’s the easiest and fastest way to make more money for their company’s shareholders.
Not only do North Carolina ratepayers cover the construction costs and fork over the 10 percent in profits to Duke, we also cover fuel costs to run the plants. Ratepayers are on the hook for every penny of cost and every ounce of risk. Duke is guaranteed a profit and we are guaranteed to be paying on our monthly power bills for Duke’s new fossil fuel investments into the 2060s, well past the 2050 deadline by which state law requires Duke to have zeroed out carbon pollution from its facilities.
Duke Energy could save ratepayers huge amounts on fuel costs if the company instead pursued more offshore wind on a faster timeline. As an example, offshore wind in Virginia is projected to save ratepayers $300 million in fuel costs per year, over $3 billion in total during the first decade of operation. North Carolina can hedge against fuel price hikes like the ones that are currently the primary driver of residential bill increases by building predictably-priced clean energy like wind that saves ratepayers from buying gas when it is most expensive. And wind will help improve reliability, too. Offshore wind in North Carolina performs best at night and in the winter, the exact time and season that Duke Energy predicts peak demand on the North Carolina electricity system.
As another layer of risk and challenge, the huge investments in new fossil fuel power plants Duke is proposing are tough to square with state and federal requirements that aim to get North Carolina on a firm path to less pollution. Duke is betting on hydrogen — a gamble that comes with significant feasibility and cost concerns, particularly since it’s a currently non-existent market and a technology that is as-yet unproven. There are no hydrogen pipelines or storage facilities in North Carolina, and even if one could safely get the enormous volume of hydrogen fuel required to plant sites, data shows it’s largely inefficient and a huge waste of resources, with 50-80 percent of the generated energy lost during the process. Offshore wind and solar with battery storage are technologies that exist today and can be quickly scaled to meet our needs. No guessing or hoping required.
The filings, public meetings and expert witness hearings are culminating in a huge decision point for the state over the next few months. It’s up to the NCUC to carefully review Duke’s plan, taking into account testimony from experts and stakeholders, and ensure they fulfill their role of protecting North Carolinians from overpriced, risky and unnecessary investments. A mix of solar, onshore and offshore wind can provide consistent, predictable power supply in the Carolinas. We do not need – and cannot afford – the risky and costly plan Duke Energy is proposing.
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