N.C. Utilities Commission members approved Duke Energy’s latest long-range resource plan, giving the utility a waiver from having to plan to meet a 70% carbon dioxide reduction target by 2030.
The approved Carolinas Resource Plan says Duke should pursue development beyond previously planned levels of about 3.5 gigawatts of solar, 1.1 gigawatts of battery storage, 1.2 gigawatts of onshore wind and 3.6 gigawatts of gas generation capacity. Expanded generation is needed to meet soaring demand for power, particularly for data center customers and large manufacturers, the Charlotte-based utility has said.
Commission members shared the utility’s worries that the pace of North Carolina’s economic development, particularly its success in attracting large-scale manufacturing projects, could stress Duke’s existing network.
They cited testimony from Duke officials that until a few years ago, it was rare to field service requests from large customers that would use 5 to 10 megawatts of power. Now, it “routinely receives inquires from perspective customers with project loads over 20 or 50 megawatts or even loads of 100 megawatts and greater,” the commission said.
In recent weeks, for example, public officials have disclosed that Google plans a $600 million expansion of its Lenoir data center, while Microsoft is buying land in Person County for an expected data center project.
Commission members acknowledged that ratepayers could wind up on the hook for underwriting surplus generation capacity if the demand projections are too high. That is a contention of some manufacturing industry representatives. But the order said Duke has “taken a conservative approach to forecasting.”
“Duke must invest in its system to ensure reliable service, particularly as load grows in” the Carolinas, the commission said. “Failing to maintain or replace aging, end-of-life infrastructure in a disciplined and orderly fashion will degrade reliability and could result in the need for even more expensive investment in a constrained timeline.”
The plan continues to presume the retirement of most of Duke’s coal-fired power plants by 2036, in part to reduce carbon dioxide emissions.
But Duke’s present-value cost projections indicate that moving to a wider mix of sources is the economically smarter move even if carbon reduction isn’t required.
Most of the ensuing costs “are driven by maintaining and expanding the grid to ensure reliable service and not to comply with carbon dioxide emissions reduction regulations,” the commission said.
Moreover, waiving the 2030 target for a 70% reduction follows from the scale of the investment required and the overriding need for a reliable power grid, it said.
Duke should instead strive to meet that target by “the earliest possible date,” and keep the commission informed via the next revision of the resource plan, it said.
The commission ruling drew strong criticism from Jim Warren, executive director of the NC WARN environmental group. The commission “gave Duke essentially everything it wanted – as usual – in its order issued late Friday. They’re expanding fossil fuels and suppressing renewables – exactly backward from the demands of climate scientists.
“Duke and the commission seem anti-science – and they’re planning to take this state in the wrong direction for decades to come.”
In July, Duke, the Utilities Commission’s Public Staff, Walmart and the Carolinas Clean Energy Business Association reached a broad settlement on most of the topics at issue in the long-range plan. The Public Staff’s role is to represent ratepayers in utility matters.
In a concurring opinion, commission member Jeffrey Hughes said while the approved plan “will lead to a number of positive outcomes,” state and utility commission ought to give more weight to externalities as they discuss cost.
“While a delay in capital investments may lead to a lower customer bill in the short term, it also likely carries an increase in cost in terms of climate warming impact,” he said.
Duke voiced satisfaction with the approval.
“We believe this is a constructive outcome that allows us to deploy increasingly clean energy resources at a pace that protects affordability and reliability for our customers,” it said. The order confirms the importance of a diverse, ‘all of the above’ approach that is essential for long-term resource planning and helps us meet the energy needs of our region’s growing economy.”
Unlike NC WARN, another group, the Environmental Defense Fund, saw both good and bad in the order.
It believes Duke can meet the 70% target by 2032 if it moves more aggressively to invest in offshore wind generation, said Will Scott, its southeast climate and clean energy director. The order directed Duke to issue a request for information that could set the stage for the development of up to 2.4 gigawatts of capacity, phased to reach that by 2035.
Duke officials signaled clear reluctance about the technology, citing leasing and supply chain issues even though neighboring Dominion Energy has a wind farm under construction about 27 miles east of Virginia Beach.
Scott, however, said Duke can capitalize on the Carolina Long Bay leases south of Bald Head Island.
“In our view, there’s just going to be increased demand for electricity,” he said. “We’re going to need a lot more clean energy to meet our interim target and long- term target. We just need to take advantage of the options the state has, and luckily there are a number of good ones on the table.
The commission requires Duke to update the Carolinas Resource Plan every two years. The one just approved was filed in August 2023, so the company is slated to file a new plan next summer.
