North Carolina’s Senate is moving to eliminate the 70% carbon-reduction target previously set for 2030, which would reduce rates and slow development of solar-energy projects over the next decade or so, according to an analysis by the N.C. Public Staff.
On Thursday, the Senate passed and sent to the House its proposal to eliminate the 70% goal legislators approved four years ago. Senate Bill 261 cleared the chamber just three after its introduction. It passed by a veto-proof 31-12, with Democratic Sens. Dan Blue, Paul Lowe and Joyce Waddell joining every Republican who was present.
The Public Staff is an affiliate of the N.C. Utilities Commission with a mission of representing ratepayers’ interest. Senate leaders who introduced Senate Bill 261 asked the Public Staff to study what the change in the 2030 target would mean for various parties, including Duke Energy and rate payers.
The Charlotte-based utility, which is the state’s dominant electricity provider, is supposed to be carbon-neutral by 2050, whether or not SB 261 passes.
The model compared construction planning under the repeal against Duke Energy’s approach and updated analysis by the Public Staff.
Sen. Paul Newton, R-Cabarrus, touted the possibility of saving North Carolinians about $13 billion on their future power bills. He is a former Duke Energy executive.
Duke projections from 2023 suggested that it would need about $150 billion, in present-value terms, in 2050 to meet its construction needs. Eliminating the interim goal would drop that to roughly $137 billion.
At the consumer level, Duke’ would need to raise rates by an average of 3.2% a year through 2038, if the change is made, according to the Public Staff’s modeling. That is less than previous projections of a 3.5% average annual increase.
Dissenting Democrats said they want to closely examine the Public Staff modeling that Newton leaned on. Sen. Julie Mayfield, D-Buncombe said there had been only “limited information sharing since” the bill was introduced.
The Public Staff model also reports a likely mix of power generation sources that Duke will need to provide reliable service over the next 25 years.
The analysis makes these assumptions and projections if the interim goal is ditched:
- Duke still retires its remaining coal-fired power plants.
- Solar development slows sharply in the 2030s as compared with Duke Energy’s prior expectations, but picks back up again in the 2040s as the deadline for carbon-neutrality approaches. Duke would wind up needing more solar under the SB 261 scenario (35.8 gigawatts) than previously projected (27.3 gigawatts).
- Battery storage, which is needed as an adjunct to solar power, would follow a similar profile.
- There will be more investment in natural gas than Duke Energy had been planning for, mostly for combustion turbines to help with peak loads.
- Duke’s hydro-power plans would be unchanged.
- Work on small modular nuclear reactors would slow by a couple of years, but match previous expectations by 2038. These new units are expected to be a third the size of those now operated by the utility.
- Wind power would drop out of the equation until the 2040s. After that, it would make up less of the power mix than if lawmakers don’t change the current plan.
The Senate bill is expected to be approved because of support of Senate Pro Tem Phil Berger and other key leaders.
Environment groups say the bill will also allow Duke Energy the ability to raise rates outside of the normal process to pay for new projects.
For years, Duke Energy has emphasized its commitment to more use of alternative energy sources as a way of reducing greenhouse emissions. Its press releases have repeatedly cited the 2030 target.
The company has also said it needs more energy generation from various sources because demand is accelerating, sparked particularly by datacenters with customers focused on artificial intelligence initiatives.
