Monday, June 24, 2024

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

A prominent clean energy nonprofit issued a new proposal to revise Duke Energy’s carbon plan to expand rooftop solar throughout the state, arguing the strategy would address climate change and result in lower costs for ratepayers. (Courtesy Port City Daily/Peter Castagno)

NORTH CAROLINA — A prominent clean energy nonprofit issued a new proposal to revise Duke Energy’s carbon plan to expand rooftop solar throughout the state, arguing the strategy would address climate change and result in lower costs for ratepayers.

READ MORE: Residents call for more clean energy, rate decreases at Duke Energy hearing in New Hanover

NC WARN is a Durham-based nonprofit focused on promoting the clean energy transition in North Carolina. On Tuesday, the group introduced its “Shared Solar” proposal focused on a broad expansion of rooftop solar paired with on-site storage, known as solar plus-storage (SPS).

Under the 2021 state law HB 951, Duke must reach carbon neutrality by 2050 and reduce carbon dioxide emissions to 2005 levels by 2030. The company introduced an updated carbon plan in accordance with the law in January, which includes natural gas expansion as its largest energy source over the next decade. New infrastructure would produce 8,925 megawatts of gas power by 2031 versus 6,640 MW of solar by the same year. 

Duke estimates infrastructure development from the current proposal would increase ratepayers’ monthly bills over $50 by 2033 and $80 by 2038.

The NC Utilities Commission is currently reviewing the plan and expected to amend, reject, or approve it in November. The review process involves public hearings for feedback from ratepayers, including a meeting at New Hanover County Courthouse last month. More than 20 residents criticized the plan for its emphasis on natural gas and excessive rate increase projections. 

Duke argues natural gas is a necessary component of the carbon plan because economic growth in the state is driving a major increase in energy demand.

“Meeting the energy needs of a growing and economically vibrant state, while delivering a path to cleaner energy that protects reliability and affordability for our customers, requires a diverse, all of the above approach including next-generation nuclear, natural gas, solar, wind and storage resources,” spokesperson Bill Norton told Port City Daily.

The Shared Solar Plan

Although Duke’s current carbon plan already includes a major expansion in solar power, NC WARN argues it excessively focuses on large-scale infrastructure that will take years to build. The group believes emphasizing localized SPS would be a more immediate solution and potentially save billions in transmission infrastructure costs required from reliance on large-scale solar farms.

Under the proposal, customers could choose whether or not to build SPS at their homes. Installation would be funded by the utility and ratepayers, and Duke would pay customers for the right to use excess SPS energy shared to the grid when necessary. 

Advocates argue solar and other renewables will progressively lower costs in coming years as fossil fuels sources become more expensive. NC WARN has cited research such as a 2014 study by investment research firm Sanford Bernstein & Co., which found rooftop solar lowers market prices for electricity by reducing peak demand.

Chris Carmody, executive director for Carolinas Clean Energy Business Alliance, told PCD Duke’s recent rate hikes are often mistakenly attributed to renewables, but natural gas and other commodity price fluctuations were the cause of its 11.7% rate hike last year. He also cited an April study of NC Utility Commission data by Cary-based consultant EQ Research that found natural gas plants caused 67% of Duke Energy Carolina’s rate increases since 2017.

NC WARN notes they are open to variations of their preferred approach but believe SPS should be given open and fair consideration by the North Carolina Utilities Commission. They argue Duke would still earn a fair return on its investments in solar power and the plan would serve as a boon to the state’s solar companies and workforce. 

Duke spokesperson Bill Norton said the company does support rooftop solar, citing an incentive program that opened last week and currently has more than 400 applicants.

“North Carolina is already number four in the nation for solar, and rooftop solar plus storage is poised to grow even more thanks to Duke Energy’s new Power Pair program recently approved by the North Carolina Utilities Commission,” he said. “Developed in conjunction with solar developers and many other stakeholders, this new incentive helps make a home solar-plus-battery system more affordable for customers.”

Robert Parker — COO of Wilmington-based Cape Fear Solar Systems — praised Duke’s Power Pair initiative after the New Hanover County hearing last month, but argued it will fill up quickly and should be modified into a permanent program. He added it should expand to commercial clients, as it currently only serves residential customers.

Alternatively, NC WARN executive director Jim Warren views the incentive program as a public relations stunt. He differentiated the “Shared Solar” proposal from Duke’s incentive program, noting NC WARN’s effort would have no up-front costs and focus on expanding affordable energy to low- and middle-income people throughout the state, as well as businesses and nonprofits.

“They basically rolled out this pilot program to mask the damage being done to the rooftop solar industry,” Warren said. “Duke does pilot programs to get PR value and then they kill them. It doesn’t matter how successful they are.”

Duke and rooftop solar

NC WARN and other advocacy groups have long-argued utilities such as Duke oppose expanding rooftop solar because it would reduce ratepayer revenue generated from large-scale infrastructure projects and by sharing power earnings with households. 

Duke rejects the claim.

“We cannot meet the needs of North Carolina’s growing economy on solar alone,” Norton said. “That’s the key driver, not other factors.” 

Warren pointed to NC WARN’s involvement in an ongoing lawsuit against Duke over “net-metering,” a system often used in renewable energy markets to allocate costs and revenue of production. Under NC’s program, customers are given credits and reduced costs for their contributions to the grid.

In March 2023, the Utilities Commission approved Duke’s request to put a monthly fee, up to $28, on rooftop solar users and reduce credits from contributions to the grid. The utility argued it was paying too much for rooftop solar energy and passing costs to non-solar ratepayers.

NC WARN’s appeal against the decision is the most recent chapter in a years-long fight with the utility company over the state’s solar policy. In 2015, Duke requested the NC Utilities Commission fine NC WARN $1,000 a day for installing solar panels and selling energy to a Greensboro church, as the company has a legal monopoly in the state.   

Third-party solar sales remain illegal in NC, although a 2017 law, HB 589, authorized solar leasing among other provisions deemed beneficial to the industry by the NC Sustainable Energy Association. Residential solar installations expanded rapidly in the years following its passage, but fell by over 15% in 2023 after the NCUC approved Duke’s request for reduced net-metering credits, according to NCSEA.

“We’ve got good companies and a lot of workers who are now really worried and beginning to struggle, and there’s already layoffs,” Warren said. “But we could be ramping up those types of companies in small towns and cities around the state quickly. No new technology needed. All we need is less domination of the process by corporate and political leaders who are pretending we’re on the right track.” 

NC WARN argues Duke’s commitments to shareholders and profits have also influenced their modeling and projections of solar costs. While HB 589 requires the NCUC to carry out independent cost-and-benefit analyses for net-metering changes, regulators allowed Duke to carry out their own study. 

Attorney General Josh Stein also criticized Duke’s solar modeling in his September testimony to reject Duke’s carbon plan proposal. Stein noted recent clean energy incentives included in the Inflation Reduction Act made cost proposals for Duke’s solar plans outdated.

HB 951 requires Duke to open 45% of solar and battery bids to third-party producers, limiting revenue compared to other forms of energy infrastructure it can fully own and charge to its rate base. 

Anti-solar lobbying

NC WARN and other advocacy groups, such as the Energy and Policy Institute, argue state utilities’ solar expansions have been impeded by fossil fuel industry-linked organizations’ influence campaigns.

EPI cites a February legislative report from the State Policy Network — the central organization in a network of corporate-funded think tanks throughout the country — which stated it will work to “prevent states from adopting unreliable, intermittent” energy sources, such as solar and wind.

Duke is a member of several influential SPN affiliates involved in a coordinated campaign to rollback state net-metering programs throughout the country, such as the American Legislative Exchange Council and the Edison Electric Institute, the country’s most powerful lobbying group for investor-owned utilities.

Disclosures reviewed by Port City Daily show 16 North Carolina General Assembly members attended the ALEC NC State Night Dinner in Scottsdale, Arizona in November 2023. Duke paid $2,500 to sponsor the event; PCD asked a Duke spokesperson what the meeting was about but did not receive a comment. 

ALEC has been a prominent influence on state utilities’ solar policies throughout the country, including Arizona. The nonprofit worked with the Edison Electric Institute to draft model state legislation to limit net-metering and distributed it in states including North Carolina from 2013 to 2015. 

Ted Craver, who is on Duke’s board of directors and is the company’s corporate governance chair, was EEI’s chair at the time. Duke’s CEO Lynn Good was EEI’s chair from 2018-2019.

During an August 2023 hearing before Arizona’s largest utility, utility consultant Roger Morin admitted utilities around the country have opposed rooftop solar because it threatens their profits. 

Morin has served as an expert witness to support Duke Energy’s rate increase requests at multiple hearings before the NC Utilities Commission. 

The Edison Electric Institute, which Duke paid $576,158 in the first half of 2023, played an instrumental lobbying role in the EPA’s recent decision to delay emission standards for natural gas plants, according to analyses by Sludge and Politico’s E&E News

Duke Energy similarly called for a natural gas exemption in a December 2023 letter to the EPA, listing it among top issues on its $2,280,000 first quarter lobbying disclosure.

Duke’s updated NC carbon plan submitted in January contains far more natural gas production than its original plan submitted in August. The company cited higher-than expected energy demand as its reason for the update but also entered contractual obligations with new pipelines in the period.

According to SEC and Federal Energy Regulatory Commission filings, Duke completed negotiations in December for agreements to purchase gas from the Mountain Valley Project Southgate, and a February filing shows Duke Energy Carolinas is the biggest contractor for Transco’s Southeast Supply Enhancement project.

Dukes’ fossil-fuel affiliations have led some shareholders to push for greater transparency and disclosure requirements out of concern the company’s political spending contradicts its public commitments to clean energy. 

NC WARN led a petition in 2021 raising similar issues in North Carolina. In response, the NC Utilities Commission issued new rules to prevent Duke from charging ratepayers for lobbying and campaign finance expenses but did not address contributions from out-of-state Duke shareholders. 

Veteran campaign finance journalist Bob Hall stated it was “impossible” to trace all of the methods Duke uses to facilitate political spending in an August 2021 report, noting state regulators had to examine expense accounts to find $2.2 million in lobbying spending improperly charged to ratepayers. 

Hall’s 2021 report highlighted Citizens for a Responsible Energy Future as a Duke front group focused on attack ads against targeted legislators. IRS filings show the group’s most recent contribution from Duke was $200,000 in December 2023.


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

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