Regulators OK Duke Energy's gas-plant buildout despite N.C. climate law

Regulators OK Duke Energy's gas-plant buildout despite N.C. climate law

The utility is supposed to cut greenhouse gas emissions 70% by 2030, but North Carolina's utility commission has approved its plan to build new fossil-gas power plants.

By Elizabeth Ouzts

6 November 2024

North Carolina regulators on Friday accepted Duke Energy's controversial plan for curbing carbon pollution, a blueprint that ramps up renewable energy and ratchets down coal power but also includes 9 gigawatts of new plants that burn natural gas.

The biennial plan is mandated under a 2021 state law, which requires Duke to zero out its climate-warming emissions by midcentury and cut them 70% by the end of the decade.

The timing of the order from the North Carolina Utilities Commission, two months ahead of schedule, caught many advocates by surprise. But its content did not: It hewed closely to a settlement deal Duke reached this summer with a trade group for the renewable energy industry, Walmart, and Public Staff, the state-sanctioned ratepayer advocate.

But critics were dismayed by regulators' abdication of the 2030 deadline. The ruling said Duke no longer needed a plan to make the emissions reductions by decade's end, instead telling it to ​"pursue ​'all reasonable steps' to achieve the [70%] target by the earliest possible date."

"Major step back on climate," Maggie Shober, research director at the Southern Alliance for Clean Energy," wrote on X, the platform formerly known as Twitter, adding, ​"for those that say it couldn't be done, Duke had a 67% reduction by 2030 in its 2020 [long-range plan]. The utility industry generally, and Duke in particular, has had opportunity after opportunity to do better. They chose not to, and here we are."

EPA rules could complicate plans for gas plants

And while many observers say the three large gas plants approved in the near-term carbon plan are better than the five originally proposed by Duke, detractors note the facilities still could run afoul of rules finalized this spring by the Biden-Harris administration.

"Duke's plan isn't even compliant with the latest EPA regulations related to greenhouse gas pollution," David Rogers, deputy director of the Sierra Club's Beyond Coal Campaign, said in a statement.

Concerns about the Biden-Harris rules, along with doubt that the natural gas plants could be converted to burn carbon-free hydrogen, appeared not to persuade regulators.

"The Commission acknowledges that there are uncertainties and risks associated with new natural gas-fired generation resources, but this is true of all resources," the panel wrote.

Regulators believe Duke can make use of gas plants after the state's 2050 zero-carbon deadline, even if clean hydrogen doesn't pan out.

"Accordingly," the panel said, ​"the Commission determines that a 35-year anticipated useful life of new natural gas-fired generation and its assumed capital costs are reasonable for planning purposes."

The green light for the gas infrastructure is not absolute, commissioners emphasized in their order, since Duke must obtain a separate permit for the facilities. But advocates still bemoaned the anticipated impact on customers.

"This order leaves the door open for Duke Energy to stall on carbon compliance in order to develop additional resources, like natural gas, that largely benefit their shareholders over ratepayers," Matt Abele, the executive director of the North Carolina Sustainable Energy Association, said via text message.

"Positive step" for offshore wind

Still, Abele and other advocates acknowledged the plan's upsides, including its increase in renewables like solar and batteries. The 2022 plan limited those resources to about 1 gigawatt per year; this year's version increases the short-term annual addition to about 1.7 gigawatts.

Regulators' decision to bless 2.4 gigawatts of offshore wind by 2034 and call for Duke to complete an ​"Acquisition Request for Information" by next summer also drew measured praise.

"This order is an overall positive step for offshore wind," Karly Lohan, North Carolina program manager for the Southeastern Wind Coalition, said in an email, adding, ​"we still need to see Duke move with urgency and administer the [request for information] as soon as possible."

With regulators required to approve a new carbon-reduction plan for Duke every two years, advocates are already looking ahead to next year, when the process begins anew.

"Proceedings in 2025 present another chance to get North Carolina back on track to achieving the carbon reduction goals as directed by state law," Will Scott, Environmental Defense Fund's director of Southeast climate and clean energy, said in a statement.

"By accelerating offshore wind and solar, the Commission could still set a course for meaningful emissions reductions from the power sector that are fueling the effects of climate change, including dangerous and expensive storms like Hurricane Helene."

And like Scott, David Neal, senior attorney with the Southern Environmental Law Center, isn't giving up on the state's 2030 carbon-reduction deadline, the commission's latest order notwithstanding.

"We'll continue to push for the clean energy future that North Carolinians deserve and that state law and federal carbon pollution limits mandate," he said in a statement.