Every two years, the Duke and Dominion utilities in North Carolina are required to submit new Integrated Resource Plans (IRPs) to the North Carolina Utilities Commission (NCUC) for approval. IRPs are, in short, a utility’s plan for meeting forecasted annual peak and energy demand over a specified future period. Duke Energy Carolinas (DEC) and Duke Energy Progress (DEP) submitted their biennial IRPs in mid-2018, and last week, NCSEA filed initial comments in response to Duke’s proposed plans. With our comments, NCSEA also included an alternative IRP model, developed by Synapse, that details a realistic clean energy future that meets the needs of Duke’s customers and future reliability requirements as traditional energy generating resources are retired. We have outlined the key takeaways from our comments and alternative proposal below, but we encourage those interested to read the filing in full on the NCUC website.
NCSEA Initial Comments: Key Takeaways
In our comments, NCSEA argues that the status quo IRP process Duke employs is no longer working as intended for North Carolina customers. The current IRP proposals are significantly less clean and more expensive than other realistic portfolio options (such as the Synapse Report NCSEA included in our comments), and therefore do not comply with North Carolina General Statute. NCSEA does not support the Duke IRPs in their current form, and requests the NCUC to reject them for the following reasons:
- The Duke IRPs are not the most cost-effective plans: The proposed IRPs plan for an overly expensive resource mix that barely expands the use of clean energy beyond what is legislatively mandated. General Statute requires that utilities present a plan for the “least cost mix of generation and demand-reduction measures.” The proposed plans, with a heavy reliance on natural gas and other traditional generating resources, do not result in a least cost energy mix and therefore do not comply with the law.
- The Duke IRPs are inconsistent with their other plans: Duke’s other stated plans, such as their Power/Forward Grid Modernization Plan, are nowhere to be found in their proposed IRPs. These are ratepayer-funded investments, and there is no transparency to rate payers about whether Duke plans to integrate them into their long-term resource planning. By not including any reference to their grid modernization plans in the IRPs, Duke has presented two very different futures for North Carolina, and we argue that Duke’s inconsistent plans do not present the best possible energy system for rate payers.
- The traditional IRP approach has not adequately planned for challenges and opportunities associated with increasing deployment of distributed energy resources (DERs). The rapid increase of DERs, or small generation resources that are deployed across the grid, has led to power-quality and distribution challenges that are unique from large-scale generation and transmission challenges in regional planning processes. As such, NCSEA argues that North Carolina’s IRP process must include a new component—Integrated Distribution Planning (IDP). IDP is a process that utilities undergo to map out their existing systems and identify infrastructure changes that may be needed to achieve grid modernization goals.
Alternative IRP Proposal: Key Takeaways from the Synapse Report
The alternative IRP proposal that NCSEA included in our filing was prepared by Synapse Energy Economics, a leading energy, economic, and environmental consulting firm whose clients include state utilities commissions, RTOs/ISOs, local governments, and governmental associations including the National Association of Regulatory Utility Commissioners (NARUC). The report, which begins on page 30 of our filing, outlines three distinct scenarios: the proposed Duke IRP, a Clean Energy Scenario, and an Accelerated Coal Retirement Scenario. Through these scenarios, the Synapse Report demonstrates the clear limitations of the Duke IRPs and their inadequacy in considering a full range of scenarios with respect to the economic dispatch of coal and the deployment of additional renewable and distributed energy resources.
As the alternative IRP proposal details, a clean energy future for North Carolina customers will decrease energy costs, greatly reduce harmful greenhouse gas and other air pollutants, and drive the proliferation of new renewable resources. The Duke IRPs, in their current form, fail to achieve these goals and do not reflect a utility that is taking steps towards creating the cleaner, cheaper, smarter, more reliable, and more resilient electricity system that North Carolina’s future needs require.
Reply comments are due May 6, 2019, and NCSEA will continue to be engaged in this docket to help ensure that the approved IRP is the cleanest and least expensive option for North Carolina energy consumers. Stay tuned to NCSEA for the latest updates on the IRP process, and become a Business Member to be the first to receive updates on important proceedings in front of the NCUC.