Duke-backed energy generation bill headed to NC Senate for action

Published on July 16, 2021 by Kim Riley


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Credit: Duke Energy

Action this week in the North Carolina General Assembly on House Bill 951, which aims to reform electricity production in the state, provides Duke Energy the opportunity to set a course forward to bring cleaner energy on its system without sacrificing reliability.

“It is clear that North Carolina’s clean energy transition is top of mind for policymakers, diverse stakeholders and communities,” Duke Energy spokesperson Grace Rountree told Daily Energy Insider on Friday. “As parties continue discussions on HB 951 and find additional compromise, we remain committed to advocating for solutions that support communities and ensure the continued reliability and affordability customers expect.”

Duke Energy for several months worked with lawmakers and others to help craft HB 951, which is sponsored by state Republican Reps. Dean Arp and John Szoka. Environmentalists claim the bill doesn’t sufficiently fight climate change because it mandates too much natural gas rather than other technologies to fuel Duke’s converted coal-fired operations. Arp and Szoka have said that HB 951 doesn’t mandate a specific fuel source at three of the five coal-fired electricity plants that Duke would close if the bill is enacted.

Other bill opponents, including industrial trade groups, also say HB 951 provides Duke with several long-sought, favorable regulatory changes — such as reducing the decision-making authority of the state’s Utilities Commission, which sets electric customers’ rates — while increasing energy costs for consumers.

But according to Duke’s Rountree, “there is a lot of misinformation circulating on this bill.”

Rountree wrote in an email that HB 951 would mandate retirements of five Duke coal plants, replacing them with cleaner energy; help meet aggressive carbon reduction goals of at least 64 percent; add a significant amount of new renewable energy to the system; authorize securitization of $500 million in energy transition costs to save customers money; and bolster customer solar programs that would be used to retain and recruit industry to North Carolina.

“The Utilities Commission’s consumer watchdog estimates the legislation would keep bill impacts to an average $3.50 per month by 2030 for residential customers and a 0.1 percent average annual increase for industrial customers,” Rountree said.

At the same time, Duke Energy consistently hears from its customers that they want their energy to come from cleaner sources and they want Duke to make those investments while keeping energy prices affordable, she said.

“With that in mind, we support our state leaders charting a path forward for an orderly energy transition, one that supports communities and helps ensure the continued affordability and reliability our customers depend on,” Rountree said. “We also believe it is important to incentivize clean energy investments and modern cost recovery mechanisms, which this bill addresses.”

Duke Energy also recognizes that change is under way and coal is becoming more expensive for its customers. 

“That is one reason why Duke Energy continually explores ways to accelerate our energy transition across our system, moving us away from coal while protecting the reliability and affordability our customers depend on,” Rountree said. “The opportunity is in front of us with House Bill 951 to advance a balanced energy transition for North Carolina in a way that protects against price spikes, shepherds cleaner energy and supports the vitality of our communities.”

The majority of North Carolina House lawmakers agreed. HB 951 was voted out of the state House Energy and Public Utilities Committee on July 13 and then faced a final vote in the wee hours of July 15 by the full North Carolina House of Representatives, which passed the measure on its third reading with a vote of 57-49 and sent it to the Senate. 

“I’m well aware not everyone is happy with the bill,” bill cosponsor Rep. Szoka said following the vote. “More work has to be done.”

If approved by the state Senate in its current form, then HB 951 will head to North Carolina Gov. Roy Cooper, who is expected to veto it.

“The House Republican legislation as currently written weakens the Utility Commission’s ability to prevent unfair, higher rates on consumers in the short run,” tweeted Ford Porter, Cooper’s spokesperson, on July 14. “And in the long run, this bill falls short on clean energy, which will create jobs and contain costs. The Governor encourages legislators to oppose this bill unless important changes are made to fix these significant problems.”

At the same time, the state House-approved HB 951 also includes an amendment offered by bill cosponsor Arp that would prevent North Carolina from entering a multistate compact known as the Regional Greenhouse Gas Initiative (RGGI), an 11-state cooperative, market-based effort that seeks to limit C02 emissions through a cap-and-trade program. 

The amendment is in direct opposition to action on July 13 by the state’s Environmental Management Commission, a board of 15 members appointed by the governor, that agreed to develop rules to join RGGI as a primary tool to meet Cooper’s goal of reducing CO2 emissions by 70 percent.

Nevertheless, other supporters of HB 951, such as North Carolina’s Electric Cooperatives and the Raleigh-based NC Chamber, think a veto would be a mistake.

Louis Duke, spokesman for North Carolina’s Electric Cooperatives, told Daily Energy Insider that the group supports the current proposal “to help our state transition to a more diverse portfolio of energy resources at a pace that allows us to continue delivering reliable electricity, contain costs for our consumer-members and achieve long-term sustainability goals.”

“Through our participation in the stakeholder process that helped shape HB 951,” he added, “we championed the 2.5 million members served by North Carolina’s 26 not-for-profit electric cooperatives. We advocated for their priorities of reliability, affordability and sustainability and believe those are reflected in this compromise bill.”

And because the cooperatives realize that costs matter, particularly in rural North Carolina, Mr. Duke said they value the cost-containment provisions included in HB 951. “We support this bill’s strategic promotion of a reasonably paced buildout of diverse energy resources that will help us achieve our long-term sustainability goals without sacrificing affordability and reliability,” he said.