N.C. electric co-ops shifting with energy markets

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Joe Brannan is CEO of the North Carolina Electric Membership Corp. (NCEMC), which supplies power to local co-ops that serve 2.5 million folks in 93 of the state’s 100 counties. Think of NCEMC as the wholesaler and the member-owned co-ops as the retailer that brings electricity into the home. Some of that electricity comes from a Duke Energy nuclear plant near Charlotte partly owned by NCEMC, some comes from natural gas plants and some comes from electricity acquired from other utilities.

But NCEMC is more than a power wholesaler. NCEMC is monitoring how the power is flowing around the farflung co-op system, which covers 45% of the state’s land area, and it is planning for an increasingly complex future. We can already see this future in large solar farms like the ones operated by the QVC distribution center between Rocky Mount and Tarboro, and smaller solar microgrids in new neighborhoods.

When I was covering utilities in the 1970s, power flowed in one direction, from large plants, often powered by coal, down massive transmission networks to local grids and then to customers. Today, power is increasingly flowing in two directions, with a variety of small and not-so-small renewable energy sources sending electricity into the grid. All that has to be managed very carefully or the grid might blow a fuse.

The new Biden Administration has ambitious ideas about what the country needs to do to reduce carbon emissions. We are shifting from a Trump Administration that wanted to revive West Virginia coal to a Biden Administration that doesn’t.

One key focus in the Biden climate strategy is the power industry, which is responsible for around a quarter of all U.S. greenhouse gas emissions, right behind transportation. In the campaign, Biden pointed approvingly to Colorado, whose governor committed the state to relying 100% on renewables by 2040. (In 2018, N.C. Gov. Roy Cooper set a 2025 state goal of being 40% below 2005 greenhouse gas emissions.)

When I talked with Brannan last week, I sensed that he has been spending a lot of his time getting ready for this kind of future.

“Our industry continues to change, particularly consumer expectations and evolving technology,” he said.

NCEMC and the co-ops are better prepared than most utilities. Nuclear accounts for 57% of the portfolio that NCEMC uses to power 25 co-ops, the result of their ownership of a majority of the Catawba nuclear station’s Unit 1 that dates back to the 1980s. Today, coal makes up just 5% of its power, well below the utility industry average of 23%.

“In North Carolina, electric co-ops are really starting from a point of strength when it comes to clean energy and emissions-free-resources,” said Brannan.

The goal is to get to 50% of 2005 carbon emissions by 2030 and net zero by 2050. That will be a heavy lift. Natural gas and oil account for 24% of the co-ops’ power supply.  They own gas plants in Anson and Richmond counties, and a portion of a Duke gas plant in South Carolina. Utilities built a lot of natural gas facilities over the past 25 years as they were looking to retire coal plants. More nuclear plants weren’t seen as a great option because of cost, long lead times for construction, and the political challenges of getting new projects approved.

Meanwhile, renewables have emerged as a realistic option, particularly solar. North Carolina has become one of the top solar states, growth fueled for years by a generous tax credit.  Private utilities have gotten into large-scale solar projects; Duke has 3,300 megawatts of solar in North Carolina, enough to power 700,000 homes and businesses. This is not exotic technology anymore, and battery storage is evolving. Even some Republicans in the North Carolina legislature are warming up to renewables, seeing potential in rural districts with land suitable for solar and wind projects.

The challenge for utility executives like Brannan is managing not only the solar and wind projects that want to feed power into the grid, but also smart thermostats and water heaters that can help conserve energy on the hottest and coldest days.

In 2019, NCEMC installed a Distributed Energy Resource Management System. Brannan says it will allow “us to coordinate distributed energy resources across the grid and transition our state’s co-ops into the role of distribution operator as they manage an increasingly complex distribution network and the two-way flow of information.”

NCEMC and the co-ops have a greater ability to see what is going on and interact with devices and systems connected to the grid.

For example, four co-ops have signed up 2,000 customers in what is called the Connect to Save program, launched last summerJones-Onslow, Carteret-Craven, Lumbee River and South River.  The program provides households with deeply discounted smart thermostats. During peak electricity periods, the co-ops can adjust the thermostats to reduce demand. The homes might be a few degrees cooler on the coldest winter mornings and a few degrees warmer on a few days in July, but the savings can add up.  The same program can remotely manage water heaters.

This is a big deal. One of the chief concerns as coal and, eventually, natural gas plants are decommissioned, is whether utilities will be able to supply enough power early on a January morning before the sun hits the solar panels. Peak energy is also expensive if NCEMC has to buy it on the open market, so tweaking thermostats and water heaters saves the co-ops and customers money. It’s like more efficient lighting, something that sounds fairly pedestrian that can have massive benefits.

“Connect to Save represents the first time the co-ops have deployed these devices on such a wide scale to reduce peak demand for power,” said Brannan.

This same technology is also making it easier for the co-ops to prepare for the rollout of microgrids throughout their service areas that can also feed power into the grid. Microgrids are potentially a gamechanger for utilities and developers. Every real estate agent in the state will learn about microgrids in the coming decade, because home buyers will be asking about them, after “how fast is the Internet?”

Microgrids are basically a community solar farm and a battery (although some also have propane or diesel generators, like Ocracoke Island). The microgrid can push power into the utility’s grid when it is needed, and — in instances of large-scale outages — it can temporarily power the community’s homes.  Which will be increasingly useful if, as climate scientists predict, we’re in for more intense hurricanes.

Heron’s Nest, a new subdivision in Shallotte, served by Brunswick Electric, is an example of a community that is being built with roof-top solar, smart thermostats and water heaters, and a community solar array and battery.  Butler Farms, a hog operation in Lillington, has a microgrid that relies on solar and biogas from swine waste, which is, yeah, renewable.

“I think we’ll see more of that,” said Brannan, “because of how technology’s being integrated and the opportunities we have to manage this.”

“Tourism is a big element of our economy.  But [in] the coastal regions, in particular, we are prone to a lot of hurricanes. And so, building more resilience into those communities really speaks to the concept of microgrids. The capability is there today.”

Resilience isn’t just about keeping the lights on. North Carolina’s co-ops serve a mainly rural customer base. Nearly all the co-ops today serve at least one Tier 1 county – the most economically distressed as classified by the N.C. Department of Commerce. For 10 NCEMC co-ops, half or more of their counties are Tier 1.

So, co-ops play a crucial economic development role. “Over the last few years we’ve been able to extend grants and loans upwards of $70 million that have led to over a billion dollars of new capital investment in rural North Carolina. So, a little bit of seed sometimes grows large trees.”

Brannan is an electrical engineer by training, and he worries about his transmission lines and whether his high-powered technology can talk to a thermostat or pull power from a battery. But there’s a larger world beyond the grid. In our conversation last week, he talked about the importance of the work co-ops have been doing with local schools.

In a program called “Bright Ideas,” teachers can submit grant proposals for activities they want for their students. “And we support them through grants that will enable the schools to do more than maybe the funds would allow them to do without our engagement.” Since the early ‘90s, this has resulted in $13.6 million in grants for nearly 13,000 projects, involving 2.7 million students.

Another program is run in partnership with the Kenan Fellows Program for Teacher Leadership at N.C. State. Teachers spend several weeks at a co-op, watching people work and learning how to translate the skills into their lesson plans, such as for STEM classes.  One of the challenges in rural areas is helping students see the potential for good jobs in their own communities and the path to those jobs.

Education is the most important economic development program, and Brannan and the co-ops understand that.

 

 

 

 

 

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