Carbon Plan Briefing: Stakeholder Updates and What’s to Come 

This article provides a look into how things are going at the North Carolina Utilities Commission (NCUC) in the run-up to Duke’s filing of its proposed Carbon Plan by May 16. As a reminder, the NCUC was mandated under House Bill 951 (HB951) to involve stakeholders in the development of the Carbon Plan, the first of which is due by the end of 2022.

Background

After months of negotiations between a diverse set of stakeholders down at the NC General Assembly, Republican leadership and Governor Cooper reached a bipartisan agreement that established some of the first carbon mandates for a state in the southeast. House Bill 951: Energy Solutions for North Carolina codified targets for the electric utility sector to reduce carbon emissions 70% by 2030 and achieve net-zero emissions by 2050. In order to reach these goals, the legislation also directed the NCUC to develop a ‘Carbon Plan’ which would outline the specific measures necessary to reach the emissions goals.

In the Carbon Plan proceeding, the NCUC has directed Duke Energy to draft an initial plan and conduct at least three stakeholder convenings to seek input on that plan. The final Carbon Plan must be finalized by the NCUC by December 2022 and will subsequently be revisited every two years.

The Carbon Plan

The NCUC opened the Carbon Plan docket mid-November 2021, and numerous petitions to intervene followed, including those from NCSEA and many of our partners. With its deadline to file a draft Carbon Plan with the NCUC by May 16, Duke Energy has already begun the process of convening stakeholder meetings. The first was held on January 25, the second on February 23, and the third on March 22. After participating in these meetings, NCSEA had numerous concerns about procedural and subject-related matters.

Throughout these convenings, Duke has abstained from addressing or discussing topics that greatly impact the overall implementation of strategies that would result from the plan, including:

• Transmission planning and modeling, along with the gaps in need of addressing to build out additional clean energy resources
  • Transmission and distribution planning are specifically called out as a need for investigation under Section 1.(1) of HB951.
• The consideration of alternative market structures like a Regional Transmission Organization (RTO) or ISO as a means for carbon reduction.

Further, Duke Energy has been unwilling to share information critical to various aspects of the plan, which has posed a disadvantage to intervenors in the following ways:

• The Bureau of Ocean Energy Management is slated to hold its lease auction for the Wilmington East Wind Energy Area on May 11, ahead of the first Carbon Plan draft release, thereby providing uncertainty around potential avenues for offtakers for bidders.
• After the original draft Carbon Plan is filed on May 16, intervenors will only have until July 15 to review, provide feedback, and draft their own proposed Carbon Plans. Therefore, groups like NCSEA will have less than 60 days to conduct our own modeling in response, while Duke will have had over 8 months.

For a full recap of NCSEA’s concerns with the Carbon Plan process and stakeholder convenings, view Peter Ledford, NCSEA’s General Counsel & Director of Policy’s remarks at the NCUC Staff Conference on March 7, 2022.

A win for NCSEA and clean energy advocates

As outlined above, there were numerous concerns raised throughout the stakeholder convenings of Duke’s Carbon Plan. An additional concern of NCSEA and its partners was Duke’s stated intention to utilize out-of-state natural gas generation as an option to circumvent the NC-specific carbon reduction mandates.

These carbon accounting loopholes are referred to as “resource shuffling” and have taken place in notable instances like the California cap-and-trade market. Resource shuffling occurs when a utility attempts to receive credit for emission reductions that have not occurred because it moved its carbon emitting electricity generation to other entities, states, or operations. This usually results in no actual reduction in emissions due to the proposed cleaner energy source being bypassed by dirtier, cheaper fossil fuels which fall outside the border of the jurisdiction enforcing emissions reductions.

As a result of the continued efforts of NCSEA, its partners, and other stakeholders, Duke was forced to change the framing of future generation plans. At the March 22 stakeholder meeting, Duke acknowledged that it had heard the concerns and objections about resource shuffling elevated by stakeholders at previous meetings. Consequently, the utility asserted that all additions to its generation fleet, including any out of state additions, would be held to the NC emission reduction standards.

This is good news for clean energy and carbon reduction advocates. Rather than shifting the impacts of CO2 emissions from its generation fleet in North Carolina to neighboring states, Duke will need to find ways to transition to cleaner energy sources. This will require the utility to move away from burning fossil fuels at its power plants regardless of their location and to invest in more renewable energy sources like wind and solar.

What’s next moving forward?

While this is a small win in the grand scheme of carbon reduction planning, it is important to note the role that advocates like NCSEA played in altering the planning path towards a cleaner future. The jury is still out on what the Duke’s proposed Carbon Plan will reveal when it is released on May 16 but rest assured NCSEA and our partners will be the first to share updates via our blog and through comments in the relevant NCUC dockets.

The NCUC Carbon Plan draft deadline is fast approaching on May 16, 2022. Once submitted, intervenors will have until July 15, 2022, to submit feedback on Duke’s proposed plan. Follow along with the process of Docket E-100 Sub 179 and learn how to get involved here. Also, stakeholder feedback can be sent directly to dukecarbonplan@gpisd.net.