Wednesday, July 24, 2024

Ethics commissioners own Duke stock as former president, current lawmaker pushes permit reform legislation

Duke Energy remains a powerful force in the General Assembly as a lawmaker who receives income from the utility pushes legislation to expedite permit reviews for its proposed natural gas plants. Meanwhile, appointed officials charged with overseeing potential conflicts of interest own stock in the company. (Port City Daily)

NORTH CAROLINA — Duke Energy remains a powerful force in the General Assembly as a lawmaker who receives income from the utility pushes legislation to expedite permit reviews for its proposed natural gas plants. Meanwhile, appointed officials charged with overseeing potential conflicts of interest own stock in the company. 

READ MORE: NC nonprofit argues Duke opposes rooftop solar due to profitability, proposes alternative carbon plan

ALSO: Environmentalist groups oppose Rouzer’s water permit reform bill, which helps some of his campaign donors

Duke is one of the largest investor-owned utilities in the country. It is a legal monopoly in North Carolina and one of the state’s top political spenders, leading critics to express concern over its extensive influence.

“Duke Energy is not merely one of many voices seeking to shape public policy,” former NC GOP executive director R. Lee Currie Jr. wrote in a 2022 Raleigh News & Observer op-ed. “Instead it’s a regional financial behemoth with richly-rewarded executives and lobbyists that is largely shielded from competition by its financial status as a regulated legacy monopoly.”

H.B. 951, a 2021 state law, requires Duke to reach carbon neutrality by 2050 and reduce carbon dioxide emissions to 2005 levels by 2030. The company’s most recent plan, introduced in January, includes replacing coal with natural gas infrastructure as its largest energy source over the next decade. The NC Utilities Commission is currently reviewing the plan and expected to reject or approve it in November. 

Earlier this month, the Senate Agriculture, Energy, and Environment Committee passed House Bill 385 with an amendment introduced by Sen. Paul Newton (R-Cabarrus). It would enforce a new 30-day limit for the North Carolina Department of Environmental Quality to determine if a water permit application is sufficient. If DEQ decides to hold a public hearing on a permit request, staff would have 90 additional days to decide; the agency would have 60 days if a hearing is not held.

The provision applies specifically to permit applications for new projects at an existing or former energy generating facility. Duke — which plans to convert its six coal-fired power plants to natural gas facilities as part of its carbon plan proposal  — supports Newton’s permit amendment.

PCD reached out to Duke to ask if there were any other issues in its legislative agenda for the short session beyond H.B. 385. A Duke spokesperson said there was nothing to add beyond statements recently reported by the Raleigh News & Observer:

“We support an efficient and constructive regulatory process and thank legislators for helping us provide cleaner energy to meet the power needs of our growing state. We are committed to ensuring the public and environment around our power plants remain protected, as they are today.”

Newton worked for Duke Energy for 25 years. He led regulatory and lobbying efforts for two years as the company’s state president before departing in 2015 to join the General Assembly. Duke political action committees and employees have donated $148,750 to his campaign and his financial disclosures state he has been paid an amount over $5,000 from Duke every year since 2016.

The Agriculture, Energy, and Environment Committee’s chair Brent Jackson (R-Pender) is also financially connected to the utility. He owns over $10,000 in Duke stock and has received $45,600 in campaign donations from Duke Carolinas PAC. 

The Utilities Commission

The Utilities Commission’s review process for Duke’s carbon plan includes public hearings throughout the state. During an April hearing at New Hanover County Courthouse, over 20 residents expressed concerns about the proposal’s expansion of natural gas infrastructure and requested a more urgent transition to renewable energy sources.

Duke argues a diverse energy mix, including a large expansion in renewable energy, is necessary to meet surging energy demand in the state. In an August 2023 post, the utility stated replacing coal plants with natural gas is one component of a broader strategy to limit negative environmental effects of energy production.

Duke’s near-term action plan includes: 

  • Increasing natural gas production by 8,925 MW by 2033
  • Increasing solar energy by 6,460 megawatts by 2031
  • Increasing battery storage by 2,700 MW by 2031 
  • Expanding hydroelectric storage by 1,834 MW by 2034 
  • Adding 600 MW of advanced nuclear power by 2035 

Critics of Duke’s plan, such as Carolinas Clean Energy Business Alliance executive director Chris Carmody, argue natural gas will increase in costs in coming years while policy incentives and technological advancements make renewables more affordable. He told PCD he came across misconceptions that Duke’s renewable investments have caused recent rate hikes despite commodity price fluctuations being the driving cause.

Durham-based nonprofit NC Warn similarly argued in favor of a greater emphasis on solar energy in a recent proposal, citing methane leaks among its reasons for opposing a broad expansion of natural gas infrastructure.

A month before submitting its revised carbon plan in January, Duke entered agreements to purchase gas from the proposed Mountain Valley Pipeline Southgate pipeline extension in Rockingham County to help fuel new infrastructure. The pipeline has faced over $2 million in fines for mire than 300 water quality violations in West Virginia and Virginia. DEQ has denied water certifications for the proposed MVP Southgate extension in North Carolina.

Bobby Jones, president of Down East Coal Ash and Environmental and Social Justice Coalition, told PCD Friday he believes Duke’s carbon plan continues a pattern of environmental degradation; in 2015, the company pleaded guilty to criminal violations of the Clean Water Act for widespread coal ash contamination in North Carolina.

“Five years ago I thought it couldn’t get any worse,” he said. “But it has and it keeps getting worse. Duke keeps building more plants, burning more methane, and pretty much doing what they want to do.”

Three utility commissioners — William Brawley, Floyd McKissick, and Tommy Tucker — were previously state lawmakers who voted on coal ash clean up legislation. They each voted in favor of the Coal Management Act of 2014, which required Duke to stop disposing of coal ash in ponds near waterways among other regulatory requirements, but was criticized by environmentalists for not including comprehensive clean ups of contaminated sites.

The three former lawmakers also voted in support of H.B. 630 in 2016, which changed the method used to classify coal ash sites as low risk. Southern Environmental Law Center senior attorney Frank Holleman described it as the “Duke Bailout Bill” in a 2016 post:

“Following closed door meetings, the North Carolina Senate today moved to change state law to delay and provide Duke Energy loopholes to avoid coal ash cleanups. This coal ash bill is damning proof that the families and communities of North Carolina can’t rely on state politicians to protect their drinking water supplies from Duke Energy’s coal ash pollution.”

The three received campaign donations from Duke PACs and officials during their time as elected officials:

  • William Brawley: $31,100
  • Floyd McKissick: $14,500
  • Tommy Tucker: $8,000

Duke’s influence extends beyond the state’s legislative and regulatory bodies. A December Center for Public Integrity investigation found Supreme Court chief Paul Newby — who ruled in favor of Duke on cases involving coal ash cleanup among other issues — invests over $10,000 in Duke.

A March PCD review found the spouse of a second Supreme Court justice, Tamara Barringer, also owns more than $10,000 in Duke stock. Fred Jarrett Jr. — an alternate member of the Judicial Standards Commission, which provides oversight of the state’s judiciary branch — also owns at least $10,000 in Duke stock.

Ethics Commission

While the Utilities Commission is the primary body charged with overseeing Duke, the Ethics Commission is responsible for interpreting and enforcing the State Government Ethics Act, which encompasses conflicts-of-interest policy for lawmakers and public officials.

In 2019, Durham-based nonprofit NC Warn submitted a complaint alleging an improper relationship between Duke and senate minority leader Dan Blue (D-Wake) to the Ethics Commission. 

Blue’s law firm represented Duke Energy while he simultaneously sponsored a controversial bill supported by the utility. H.B. 559 would have allowed advanced approval of multi-year investment plans and rate hikes. 

The commission found the complaint met sufficient standards to move forward to an evidence-gathering stage in 2020, but no apparent action has been taken since. Blue remains the senate minority leader; Duke officials have donated at least $17,650 to his campaign since 2020.

PCD reached out to the Ethics Commission to ask the status of the complaint, if other complaints involving Duke have been submitted, and if commissioners recused themselves from any related reviews. The Commission responded Monday:

“Any information related to an Ethics Act complaint which may or may not have been filed with the State Ethics Commission are strictly confidential and not matters of public record. Please review G.S. 138A-12(g) for more details.”

The Ethics Commission issues advisory opinions to help regulate ethics policy. A 2014 opinion found stock holdings over $10,000 would not be a conflict of interest unless a state official’s regulatory actions could reasonably impact the companies’ financial status or stock value.

Three officials among the eight-member Ethics Commission own over $10,000 in Duke stock, including:

  • Thomas Keith
  • James Baker
  • Carl Stewart

A fourth commissioner, Larry Yarborough, is a former state representative who received $9,500 in political contributions from Duke. He introduced S.B. 630, the Drinking Water Protection/Coal Ash Clean Up Act, in 2016. The bill was criticized by environmentalist groups, such as the North Carolina League of Conservation Voters, which argued the legislation was a product of intensive lobbying that should have been titled “The Duke Energy Protection Act.”

[Update: This article has been updated to include a statement from the NC Ethics Commission and to note at least one member of the Judicial Standards Commission owns over $10,000 in Duke stock.]


Tips or comments? Email journalist Peter Castagno at peter@localdailymedia.com.

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