Duke Energy commends N.C. order adopting company’s initial carbon plan
An order approved on Friday by the North Carolina Utilities Commission (NCUC) adopting Duke Energy’s initial carbon plan to meet new state-mandated carbon dioxide emissions reductions received a thumbs up from the publicly traded company.
“We believe this is a constructive outcome that advances our clean energy transition, supporting a diverse, all-of-the-above approach that is essential for long-term resource planning,” Duke Energy said in a statement issued on Dec. 30, 2022. “We look forward to thoroughly reviewing the NCUC order and incorporating it into our resource planning, including our filings in South Carolina [this] August.”
Duke Energy, a Fortune 150 holding company headquartered in Charlotte, N.C., includes electric utilities serving 8.2 million customers in North Carolina, South Carolina, Florida, Indiana, Ohio and Kentucky, and a natural gas unit that serves 1.6 million customers in North Carolina, South Carolina, Tennessee, Ohio and Kentucky.
The company is currently executing an aggressive clean energy transition to achieve net-zero carbon emissions from electricity generation by 2050 and net-zero methane emissions from its natural gas business by 2030.
Duke Energy also has set interim carbon emission targets of at least 50-percent reduction from electric generation by 2030, 50 percent for Scope 2 and certain Scope 3 upstream and downstream emissions by 2035, and 80 percent from electric generation by 2040.
Additionally, the company is investing in significant electric grid enhancements and energy storage, while also exploring zero-emission power generation technologies, such as hydrogen and advanced nuclear.
“We’ve already made incredible progress, retiring two-thirds of our aging coal plants in North Carolina and South Carolina and reducing emissions by more than 40 percent since 2005,” said Duke Energy in its statement. “We will continue this ongoing work of lowering carbon emissions to reduce risk for our customers while balancing affordability and reliability.”
And thus far, the communities served by Duke Energy already are seeing the benefits of this transition.
“Customers in both states deserve a clean energy plan that supports communities and keeps rates as low as possible, while ensuring the continued economic competitiveness that the Carolinas depend on,” the company said.
The NCUC’s Friday order adopts Duke’s carbon plan — which is prescribed by North Carolina law, Energy Solutions for North Carolina, House Bill 951 — that was filed on May 16, 2022. The proposed Carolinas Carbon Plan filed with the NCUC aims to achieve 70 percent carbon dioxide emissions reduction by 2030 and carbon neutrality by 2050, while offering regulators multiple options that balance affordability and reliability for customers.
Duke said its proposal was shaped by significant stakeholder input, including engagement with more than 300 organizations from both North Carolina and South Carolina. After evaluating the proposal, along with alternate proposals from intervenors, input from public hearings, and an extensive evidentiary hearing, the NCUC issued its final plan, which will be reviewed and adjusted every two years going forward.
The NCUC’s order requires Duke Energy to refresh its modeling, including impacts of the Inflation Reduction Act, the Infrastructure Investment Jobs Act, and other future legislative changes and changing conditions. And Duke must file a new proposal with the NCUC by Sept. 1.
In August, Duke Energy also plans to file an Integrated Resource Plan with the Public Service Commission of South Carolina that will take into account the carbon plan, the Inflation Reduction Act, and the Infrastructure Investment Jobs Act, as well as other factors relevant to resource planning, according to the company.
“Rather than approve a single, preferred portfolio of generation assets, the commission, as provided for in the law, adopts reasonable steps, including the approval of a number of near-term actions, toward meeting the carbon dioxide emissions reduction mandates,” according to the NCUC order.
This includes directing Duke to conduct two competitive procurements between 2023-2024 targeting 2,350 megawatts (MW) of new solar generation to be placed into service by 2028, and authorizing Duke to procure 1,000 MW of standalone battery storage and 600 MW of battery storage paired with solar generation.
Duke is also required to “optimally retire” its remaining coal-fired generating units, more than 9,000 MW, by 2035, according to the order, which notes that Duke’s emergency outage events last month “particularly underscore the need for an orderly transition away from fossil fuels to low- and zero-carbon dioxide emitting generating resources while maintaining or improving the reliability of the electric grid.”
In its order, the NCUC also said that beginning on May 14, 2024, it will conduct an expert witness hearing to aid it in considering Duke’s Sept. 1 carbon plan proposal and alternative proposals to be received from stakeholders in early 2024.
The NCUC’s review also will include public witness hearings that will be scheduled late this year or in early 2024, according to the order.
