The recently released North Carolina Utilities Commission Carbon Plan is more ideological than reasonable. It will saddle our state’s electricity customers with an energy plan that normalizes rolling blackouts due to capacity shortfalls. It will guarantee higher bills and colder homes over the winter.
It’s likely the plan doesn’t comply with state law.
The bipartisan Energy Solutions for North Carolina Act (House Bill 951), signed into law by Gov. Roy Cooper, was a compromise. It ceded Cooper and environmentalists’ long-desired goal of carbon neutrality by 2050. It didn’t mandate their preferred industrial wind and utility-scale solar resources to accomplish the goal.
House Bill 951 granted NCUC authority to determine a plan so long as it stayed within specific ratepayer protection guardrails. They included reliability, affordability, and technology. Any plan must be the most “reasonable,” “least-cost path” to emissions reductions with “least-cost planning of generation” that would “maintain and improve upon the reliability of the grid.” A required biennial review of technological advancements provides an opportunity to find new solutions that decrease costs and increase reliability.
Unfortunately, the most impactful mandate in NCUC’s Carbon Plan — accelerated retirement of 9,000 megawatts of baseload coal generation — ignores all ratepayer protections.
Admittedly, coal is the leading source of CO2 emissions on the generation side. So eliminating coal is low-hanging fruit to achieve quick emissions reduction. However, premature retirement ignores improved technology in carbon sequestration, which would allow coal-fired plants to remain operational at a much lower cost to ratepayers.
My colleague Jon Sanders recently reported, “The levelized cost of existing coal-fired power plants is less than half that of new solar and wind facilities plus their required backup generation.”
More importantly, coal has a much higher capacity factor and is dispatchable (available when needed) which makes it a much more reliable resource. Despite some fluctuations due to equipment issues, coal and natural gas worked alongside nuclear to keep North Carolinians from freezing during December’s arctic blast.
The blanket forced closure of Duke’s entire coal fleet — roughly one-fourth of North Carolina’s total installed capacity and nearly 30% of Duke Energy’s generation portfolio — requires baseload resource replacement. Instead, NCUC ordered 2,350 megawatts of new solar generation that will require expensive transmission and infrastructure upgrades to accommodate the intermittent resources. That’s on top of massive taxpayer-funded subsidies.
Solar’s biggest problem is that It has a “maximum dependable capacity of 0 MW.” Translation: It’s 100% unreliable. No worries. NCUC has us covered with a directive to build 1,600 megawatts of battery storage. Currently, Duke has two battery storage units, 18 megawatts in Florida and 5 megawatts in Indiana.
The NCUC plan pays lip service to natural gas as “bridge” fuel until more wind, solar and batteries can be developed. It allows for 2,000 megawatts of new natural gas, but that’s a pipe dream without new pipelines. Our current natural gas infrastructure is already fully subscribed. Agenda-driven environmentalists both inside and outside government have prevented necessary expansion.
NCUC also directs Duke to begin a process for onshore and offshore wind, which means more transmission lines, upgrades and higher rates. NCUC acknowledged as much, noting that Duke Energy Progress customers pay nearly 20% more for electricity than Duke Energy Carolinas customers. Why? Because their electricity comprises more solar generation and less nuclear than Duke Energy Carolinas. NCUC worried this disparity would worsen since almost all new solar and wind generation would happen on the Progress side.
As for our cleanest, most reliable baseload resource, nuclear energy, NCUC lets Duke maintain its current fleet and offers encouraging words for the development of small modular reactors — but no guarantees.
The math for retirement of baseload and replacement sources doesn’t work. Worse is the math that’s missing. NCUC provides no fiscal analysis. We have no idea how much this will cost ratepayers. But Duke just requested the first big plan-induced rate hike.
The NCUC blew its opportunity. It ignored ratepayer protection guardrails, gave a lifeline to intermittent solar, and punted on dispatchable, baseload generation. Ratepayers will pay the price, both in higher costs and colder homes. Let’s hope the legislature intervenes and orders a more thorough and reasonable plan.
Amy O. Cooke is the CEO of the John Locke Foundation, a state based, free market think tank headquartered in Raleigh.