A three-judge panel in North Carolina upheld Duke Energy’s reduced payments to rooftop solar owners on Tuesday, unanimously rejecting claims from climate justice advocates that the smaller credits run afoul of state law.

The ruling upholds for now a scheme that took effect last October after Duke, some of the state’s oldest solar installers, and multiple clean energy groups reached a complicated truce to avoid the bruising battles over net metering seen in other states.

NC WARN, Environmental Working Group, and others opposed to the compromise argued that regulators adopted it without conducting their own analysis of the costs and benefits of net metering, a requirement of a 2017 statute. Such studies typically show that rooftop solar offers net benefits to the grid, contrary to utility claims.

The appellants rested their argument in part on a statement from one of the 2017 law’s authors, John Szoka, a Fayetteville Republican who served in the state House of Representatives for a decade. An Energy News Network article quoted in the appeal describes Szoka as “adamant” that the Utilities Commission, not Duke, should conduct the study.

The appeals court panel agreed, based on the plain text of the law. 

“The commission erred in concluding that it was not required to perform an investigation of the costs and benefits of customer-sited generation,” Judge Hunter Murphy, a Republican, wrote. 

But in a disappointing twist for the challengers, he continued, “however, the record reveals that the commission de facto performed such an investigation when it opened an investigation docket in response to [Duke’s] proposed revised net energy metering rates; permitted all interested parties to intervene; and accepted, compiled, and reviewed over 1,000 pages of evidence.”

Joined by two Democrats, Judges John Arrowood and Toby Hampson, Murphy’s opinion also rejected arguments that the commission erred by failing to consider all of the benefits of rooftop solar and by forcing solar owners to migrate to time-variable rates instead of allowing flat rates to stand.

“The commission properly considered the evidence before it and made appropriate findings of fact and conclusions of law,” Murphy wrote.

Many solar installers saw a dip in sales and interest in the last quarter of 2023 when the lower net metering credits took effect. But they were also hopeful about a new Duke program that rolled out this spring, which offers solar customers incentives to pair their arrays with home batteries.

Jim Warren, NC WARN executive director and an outspoken Duke critic, said in a press release that he and his allies would weigh an appeal to the state’s Supreme Court. 

“This ruling directly harms our once-growing solar power industry and the communities constantly battered by climate change driven by polluters like Duke Energy,” he said.

North Carolina appeals court upholds Duke Energy’s lower net metering rates is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

An array of critics came out swinging in January when Duke Energy first filed its plans in North Carolina for one of the largest fossil fuel investments in the country.  

But as the months have dragged on in the development of the company’s biennial carbon-reduction plan, some notable detractors have relented. 

Just before expert witness testimony was set to begin in Raleigh late last month, the state-sanctioned ratepayer advocate, Public Staff, and Walmart endorsed a settlement with Duke on its blueprint, which includes building 9 gigawatts of new natural gas plants that the utility says could be converted to run on hydrogen in the future.

A few days later, the Carolinas Clean Energy Business Association, a consortium of solar and wind developers, announced it had signed on too.  

The agreement, which contains some small concessions from the utility, led to low-key hearings that ended in less than two weeks. It makes it more likely that Duke will get what it wants from regulators by year’s end, including a greenlight, if not final approval, for three large new natural gas plants in the near term.

Chris Carmody, executive director of the Carolinas Clean Energy Business Association, says the proposed compromise also helps lock in forward progress on solar energy and batteries, however incremental. 

“It’s a more aggressive solar spend. It’s a more aggressive storage spend,” he said. “Certainly, we would like to see more. But first of all, we like to see it going in the right direction.” 

Clean energy advocates believe Duke’s push for new gas plants will harm the climate, since the plants’ associated releases of planet-warming methane will cancel out any benefits of reduced carbon pollution from smokestacks. At the same time, they say the investments could become useless by midcentury or sooner, before their book life is over, saddling ratepayers with costs that bring no benefits.

“There’s not much in it for their customers except unnecessary risk, cost, and more pollution,” Will Scott, southeast climate and clean energy director for the Environmental Defense Fund, wrote in a blog last month. 

But Duke’s gas bubble has proved hard to burst. For one, the company’s predictions of massive future demand from new data centers are based in part on confidential business dealings that are challenging to rebut from the outside. 

Unlike two years ago, when Duke proposed its first carbon reduction plan, no groups produced an independent model showing how Duke could meet demand without building new gas. 

“We can talk about costs, or market conditions,” said Carmody. But, he said, “we did not do any modeling.”

Public Staff ran its own numbers and has urged more caution on new gas plants than Duke proposes. But the agency is unwavering that at least some are needed.

New Biden administration rules haven’t yet proved the death knell for gas that some expected. Duke is suing to overturn the rule, but it insists that building new plants that will run at half capacity is the most economical plan for compliance.

And even as Duke is proffering more gas, it’s also undeniably proposing more solar.

Clean energy backers still object to annual constraints on solar development the utility says are necessary. But the limits have increased from less than 1,000 megawatts per year in 2022 to over 1,300 megawatts. And the settlement would result in another 240 megawatts of solar than Duke had first proposed.

“It’s an iterative improvement,” said Carmody. 

What’s more, the settlement opens a discussion with Duke about the scores of 5-megawatt solar projects across the state whose initial contracts will soon expire. A proposal for how to refit them could come in April of next year. 

“This is a really important issue to our members,” said Carmody.  “These are projects that could be repowered. They could be upgraded with storage. They could have significantly more efficient solar technology than was on them 15 or 20 years ago.” 

Still, Carmody said his group tried to word the settlement in a way that left room for clean energy advocates to continue to advocate for less gas and steeper emissions cuts sooner — and that’s certainly their plan. 

“Three power plants that will be really expensive to build and then operate for only a few years is just a ridiculous proposal,” the settlement notwithstanding, said Maggie Shober, research director for the Southern Alliance for Clean Energy. 

“We remain hopeful that there’s a lot that the [commission] can do in this carbon plan proceeding and in their final order, to move us forward on a clean energy trajectory.”

Nick Jimenez, senior attorney for the Southern Environmental Law Center, acknowledges the settlement stacks the deck somewhat against his clients. 

“Historically, the commission approves a lot of settlements,” he said. “It likes to see parties settle, especially when Duke and the Public Staff are involved.”

Former critics start to coalesce around Duke Energy’s plans for more gas, solar in N.C. is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

North Carolina regulators have approved a controversial green tariff proposal from Duke Energy, rejecting protests from critics who argue it won’t bolster the company’s transition to zero-carbon electricity. 

Originally designed as a way for large electric customers to chip in extra for renewable energy projects Duke is already mandated to build, an amended tariff offered in April could allow some customers to speed up construction of new solar farms by about two years.

The revision appeared to help sway the Utilities Commission. The change, the panel said in its Jul. 31 order, is an “improvement” because the change “adds additional accelerated capacity” of renewable energy. 

The revised tariff, called Green Source Advantage Choice, has backing from the Carolina Industrial Group for Fair Utility Rates, an association of some of Duke’s largest customers. The utility says it plans to formalize the program soon in the wake of the regulators’ order. 

“The [commission] didn’t give us a deadline but asked that we do so when reasonably feasible,” spokesperson Logan Stewart said over email, “so it will be in the coming weeks. In conjunction, we will be working on updating the Green Source Advantage public webpage to include the new program details.” 

A question of ‘regulatory surplus’ 

For large customers with 100% clean energy commitments, a green tariff is a necessity in North Carolina, where Duke has a monopoly and cities, data centers and the like can’t buy clean energy directly from solar farms.  

In theory, a green tariff allows a company such as Google or Amazon to spur a new supply of clean energy equal to their electric demand, with Duke acting as an administrative go-between. An earlier iteration of Green Source Advantage more or less did just that. 

But the accounting got more complicated in 2021, when a bipartisan state law required Duke to cut its carbon pollution at least 95% by 2050. If the company is legally required to build scores of solar farms anyway, can a large customer legitimately claim its sponsorship of one project makes a difference? 

This question of “regulatory surplus” sparked a flurry of arguments and counter-arguments before the commission for some 18 months. Duke initially claimed such “additionality” was neither feasible nor necessary, and some businesses said chipping in to support the clean energy transition was good enough for them. More than a dozen local chambers of commerce and potential customers wrote regulators in support of the original program.  

But Google, the U.S. Department of Defense, and other large customers joined clean energy advocates to flag the problem of regulatory surplus, as did the Center for Resource Solutions, the nonprofit that certifies voluntary renewable energy purchase programs. Duke University, which has no connection to the utility, said it wouldn’t participate in the tariff.  

‘A small step in the right direction’ 

The debate, along with prodding from commissioners, prompted Duke to add a “resource acceleration option” to its proposal. The alternative allows large customers to advance about 150 megawatts of solar energy each year by sponsoring projects not selected in the company’s annual competitive bidding process. Every two years, Duke gets retroactive credit for this “extra” solar as part of its compliance with the 2021 law.

Clean energy advocates believe the new option is a “small step in the right direction.” But they note it accounts for 1 gigawatt of clean energy over ten years, a fifth of the entire program. Customers who lay claim to the remaining 4 gigawatts would not be impacting the state’s transition to clean electricity, they say. 

“If you’re the customer of a business who claims to support our state’s clean energy transition by participating in the program, you’re going to expect that business to be making a difference – not just subsidizing what Duke was going to do anyway,” said Nick Jimenez, senior attorney at the Southern Environmental Law Center. 

The Carolinas Clean Energy Business Alliance, a group of clean energy suppliers, also criticized the acceleration option. And though the Carolina Utility Customers Association, another group of large industrial customers, didn’t oppose the amended proposed tariff, it registered skepticism. 

“[Our] members have little interest in the Resource Acceleration Option,” the group said in a letter to regulators, “which would deliver electricity at a premium cost without providing the benefit of regulatory surplus-based environmental attributes that would be useful in meeting corporate environmental, social, and governance goals.” 

Cause for hope? 

While advocates see little good in the commission’s approval of the Green Source Advantage Choice program, they still have some faint cause for hope. 

One is the so-called Clean Transition Tariff, which Duke could propose later this year. An outgrowth of a May agreement between the utility and Amazon, Google, Microsoft, and Nucor, that program could allow participating customers to spur new projects, such as solar-battery storage combos or small nuclear energy, that provide carbon-free electricity around the clock. 

“This is not within the order,” said Jimenez, but the May memorandum of understanding, “is the big opportunity for something better.” 

Duke says the Clean Transition Tariff would be another voluntary option for customers, not a replacement for the one just greenlighted. “We see the approval of Green Source Advantage Choice as a first step,” the company’s Stewart said, “enabling us to move forward with new tariffs like the Clean Transition Tariff.” 

Maggie Shober, research director at the Southern Alliance for Clean Energy, agrees the memorandum of understanding is cause for some optimism. But she also notes that it’s only “an agreement to talk about something. It could be an opportunity,” she said, “or it could be a missed opportunity. “ 

And no matter what, the Clean Transition Tariff won’t cater to municipalities and other midsize customers with climate commitments. If these customers decline to pursue Green Source Advantage Choice, their only option is to wait for Duke to adjust.  

Commissioner Jeff Hughes pointed to that possibility in a concurring opinion. 

“Once the program offerings are launched, it will quickly become clear whether the program is as attractive as Duke asserts,” Hughes wrote. “If concerns continue and interest is modest from the outset, it is my hope that Duke will work quickly on new programs that will have a greater impact.”

N.C. regulators approve controversial Duke Energy plan that lets large customers chip in for solar projects is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Before pivotal hearings that begin Monday, Duke Energy has made a few small concessions to its plans for a giant fossil fuel buildout in North Carolina, winning over the once-skeptical state-sanctioned ratepayer advocate.

Duke’s proposed settlement with Public Staff and Walmart needs approval from the state’s Utilities Commission to take effect. It comes as dozens of experts plan to appear before the panel to debate the company’s biennial carbon plan, including its controversial bid to invest in 9 new gigawatts of natural gas plants and punt on a key state climate deadline.

The agreement still shows Duke determined to construct five large combined-cycle gas plants in the coming decade, but only three would get a preliminary blessing for now. Public Staff earlier had wanted only one such plant to be considered “reasonable for planning purposes.”

While state law requires Duke to cut its carbon emissions 70% by 2030, in line with scientists’ recommendations for avoiding catastrophic global warming, the agreement stipulates that a pollution cut of that magnitude by decade’s end is “unachievable and presents unacceptable risks to the reliability of the grid.” 

Duke also agrees to study the $250 billion Energy Infrastructure Reinvestment Program it had earlier eschewed, though the settlement’s wording seems to reject what experts say is the program’s best use: financing up to 80% of new clean energy projects and remaining debt on retiring coal units with government loans. 

Apart from a few other changes around the edges, the settlement is aligned with the plan Duke filed in January. And while the deal means the utility and Public Staff won’t spend time debating each other next week in Raleigh, clean energy groups and other intervenors still have plenty to litigate.

‘A risk of stranded investments?’

Perhaps most notable, critics say the January blueprint, combined with Duke’s spirited defense of it in hundreds of pages of testimony filed July 1, runs headlong into a new federal rule on coal and gas plants finalized in April.

In effect, the rule forces any new large gas plants to run no more than 40% of the time beginning in 2032. Public Staff, the office of the Attorney General and clean energy groups had urged Duke to reconsider its plan in light of the new regulation, perhaps by replacing some or all of the planned gas with renewables or rolling out new initiatives to reduce electric demand.

Duke is suing to try to overturn the new rule, which is now final. But the company avowed that if the regulation remains, its only option was still to build five new, combined-cycle turbines, even if they only ran at half their potential capacity. 

Having placed manual constraints on renewables and battery storage in its computer forecasting program, Duke said in its testimony, “the model is not able to shift this ‘lost’ gas generation to renewable resources.” 

Instead, the company asserted it would have to generate more power from its existing gas and coal plants, causing 4 more million tons of carbon pollution in the year 2035, a “likely delay” in 70% pollution cuts to 2036 or later, “and an increase in the total system cost of more than $600 million.”

In its July 1 filing, Duke also brushed aside doubt from Public Staff and clean energy groups that its new gas plants could ultimately run on emissions-free hydrogen fuel, which is not yet commercially viable and many experts say may never be practical.

“Several parties incorrectly assume that the addition of new gas resources will subject customers to the risk of stranded investments,” the company wrote in its testimony, “but fail to consider the critical value of these resources over the planning horizon and lack detailed analysis regarding how such a risk would actually materialize three decades from now.”

‘A desperate attempt’

The question of timing also still looms large. Though approval of the settlement would foreclose a 2030 compliance date, clean energy advocates still hold out hope that Duke will make deep pollution cuts consistent with climate science and not delay them until late in the next decade.

In fact, the North Carolina Sustainable Energy Association and three groups represented by the Southern Environmental Law Center were so dismayed by Duke’s July 1 testimony that last week they moved for regulators to declare that they wouldn’t approve a plan that violated state or federal law, before the meat of next week’s expert witness hearings begin.

That provoked a blistering countermotion from Duke. The groups, said the utility, “were inexcusably dilatory in filing their motion, and their desperate attempt to introduce legal and procedural complexity into this proceeding at the 11th hour should be stricken.”

The commission denied both motions.

Before key hearings in North Carolina, Duke Energy makes tiny concessions to big gas ambitions is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.

Duke Energy has been laying the groundwork for a new gas power plant in North Carolina’s Person County for years, touting it as the “next generation” of electricity production and lining up support from local politicians eager to hold on to the utility’s tax dollars. 

With acknowledgement from regulators and even some clean energy experts that new gas infrastructure may be needed as Duke shutters its coal fleet, the long-planned gas turbines once seemed like an inevitability.

But now, the 1,360 megawatt combined-cycle facility poised to replace the company’s aging coal smokestacks on Hyco Lake has become a major point of contention. And while the odds still favor Duke, community members and advocates alike say they have cause for hope.

First, there’s the reality of new Biden administration rules on fossil fuel power plants. Beginning in 2032, any new large, combined-cycle plant like that proposed in Person County must either cut its carbon emissions drastically or run 40% of the time or less. 

Because North Carolina’s geology isn’t suited to carbon sequestration and emissions-free hydrogen fuel isn’t yet viable, the company would have to limit the plant’s operations — either making it unavailable at key times or requiring costly startups and shutdowns, said Ridge Graham, the North Carolina program manager for Appalachian Voices.

“Either of these options make this combined cycle plant a bad investment and a much more expensive form of electricity generation than clean or renewable energy sources,” Graham told commissioners at a public hearing in Roxboro last month. “This is especially true for Duke customers as the purchase of gas fuel is passed on and has led to multiple rate increases through riders on electricity bills since 2017.”

Bolstering that concern, Public Staff, the state’s ratepayer advocate, notes that Duke lists a proposed new pipeline to transport gas to the plant as an operating cost that would “presumably” be recovered through the fuel rider.

Even if the actual fuel costs were cut in half, engineers for the agency said, “total transportation charges would mostly be unchanged within the ‘Fuel’ category because of the significant pipeline costs that would be necessary to provide natural gas service to the Roxboro site.”

In addition to these charges, ratepayers would also have to pay the full cost of the plant, amortized over 35 years, plus Duke’s regulator-approved profit margin, energy analyst Elizabeth Stanton said in written testimony on behalf of Sierra Club, Southern Alliance for Clean Energy, and the Natural Resources Defense Council.  

What’s more, she noted, ratepayers would cover whatever “replacement resources” were needed to meet demand “after the facility’s expected generation was decreased.”

In contrast, Stanton says, Duke’s estimated costs for ratepayers assume the plant will run at over 40% capacity through 2042 — a scenario squarely at odds with the new Biden administration regulation. 

“Duke needs to account for the rule in their planning, and they have not done that,” Mikaela Curry, a North Carolina-based campaign manager at the Sierra Club, said in an interview. “Who pays for a gas plant that can only run 40% of the time?”

While Public Staff supports the new plant, it also asserts in testimony that Duke hasn’t developed a plan for how it will comply with the new federal rule.

“We have concerns about the impact and implementation of the recently issued [Clean Air Act] Rule,” engineers Dustin Metz and Evan Lawrence wrote. “We cannot yet identify how [the] proposed Roxboro facility may be impacted and to what extent.”

‘That modeling … was flawed’ 

The agency also hasn’t seen a comprehensive analysis from Duke to justify the location for the combined cycle unit. “The Public Staff cannot say definitively that the proposed Roxboro… project is least cost for [Duke’s] ratepayers,” Metz and Lawrence said in their testimony.

Other critics also question whether the gas plant is Duke’s most economical option, though for different reasons.

In testimony for the environmental groups, Stanton asserts that Duke artificially limits renewables in its carbon-reduction models; assumes clean energy is 60% costlier than industry standards; and, in the plan that most quickly transitions the company away from fossil fuels, makes all resources 20% more expensive. Plus, new generation built before 2030 — which would be mostly solar — gets an 8% penalty.

“Duke’s rationale for requesting the [Hyco Lake plant… is the] selection of gas resources in its least-cost modeling,” Stanton wrote. “That modeling, however, was flawed, including multiple biases for gas resources and against renewable resources.”

Detractors also doubt the company’s plan to convert the gas plant to run on emissions-free hydrogen as late as 2049 – just in time to comply with state law. That “presumption,” said consultant Bill McAleb in testimony on behalf of the Environmental Defense Fund, “is not based on substantive evidence presented in this docket proceeding.”

Detailing an array of challenges, including uncertainty from equipment manufacturers, McAleb concludes a zero-carbon, hydrogen-fueled facility, “is not only speculative but unlikely.”

‘A very nuanced topic’ 

While advocates wage a legal campaign against the gas plant, activists are reaching out to the people of Person County face-to-face, knocking doors on the roads surrounding the existing coal facility.

Juhi Modi, North Carolina field coordinator for Appalachian Voices, says the canvassing effort so far has identified more opponents than not – surprisingly so. 

“Given that it’s a very nuanced topic, and the fact that people appreciate Duke’s economic presence in the county,” Modi said, “it’s been really meaningful to just hear what they think.” 

Referencing the yearslong campaign to get Duke to excavate its leaking coal ash pits, Modi added: 

“These people were also impacted by coal ash contaminating their well water and were part of a long fight to get their water cleaned up, and still have a lot of skepticism about Duke’s ability to responsibly operate in this community.”

Along an existing pipeline right-of-way, the new pipeline Dominion Energy plans to transport gas to Duke and other customers has also given some in the community pause. Activists say it appears to pass dangerously close to Woodland Elementary School in Semora.

“What would happen if there is an accident? If there is a fire or an explosion?” Modi said. “It’s a real concern for the children, the teachers and the staff that work in the school.”

While cleaner than coal in terms of smog-and soot-forming air pollution, the gas plant’s emissions of methane — a potent greenhouse gas — will negate its climate benefits, said Katie Moore, an air quality researcher who lives in Roxboro.  

“Not only do we not have enough time to use [gas] as a ‘bridge fuel,’” she said,  but it doesn’t even make sense because the climate impacts are the same, essentially, as coal.”

Moore also believes there’s an incorrect assumption that either Duke replaces its Hyco Lake coal units with gas or the company leaves the county altogether.

“Those are not the only two options,” said Moore, who grew up in neighboring Durham County and moved to slower-paced Person 2.5 years ago. “I don’t want people to be out of jobs and I don’t want to lose 20% of the tax base. But that’s not an inevitability. I think there are lots of ways that we could embrace renewables in this county.” 

Long odds remain

Still, at an in-person public hearing last month, Moore and other locals against the plant were outnumbered by supporters, who ranged from tourism boosters to local elected officials to the superintendent of Person County Schools, Rodney Peterson. 

“A school district like ours could not recover from the loss of our local tax base,” said Peterson, who noted he was appearing in a personal capacity. “I ask you to remember our students, our parents, our teachers in Person County.” 

Besides support from many community leaders, many other factors still weigh in Duke’s favor.  

Notwithstanding its concerns about the plant’s cost and its compliance with the new Biden administration rules, Public Staff believes the energy it will provide will be vital as the company works to reduce its carbon pollution as required by law.

“There is a need for [combined cycle and combustion turbine] natural gas generation in [Duke’s] service territories,” the engineers wrote in their testimony. Denying the company a permit to build the plant, they asserted, “could delay interim carbon emissions reduction compliance and coal plant retirements set forth in the Carbon Plan Order.”

While solar combined with battery storage could in theory provide similar economic and energy benefits as the gas plant, Person County leaders would have to repeal a 2022 ordinance that effectively bans large-scale solar farms. 

Meanwhile, Duke is eschewing an Inflation Reduction Act loan program meant to encourage clean energy investments in communities with retired coal plants.

And even though the commission is dominated by appointments from Gov. Roy Cooper, a Democrat who’s embraced the clean energy economy and criticized fossil fuels, the panel has so far exhibited little resistance to the utility’s gas expansion plans.

“It just makes me feel sad,” said Crystal Cavalier-Keck, the co-founder of the Indigenous activist group Seven Directions of Service, referencing how the panel approved Duke’s last carbon reduction plan with few edits. “It’s disheartening.”

A spokesperson for Duke declined to comment for this story, but the company’s formal responses to Public Staff and clean energy advocates intervening in the case are due later this month. An expert witness hearing is expected as soon as early August.

In the meantime, organizers like Cavalier-Keck say they’ll keep getting the word out. “We’re just going to continue to knock on all the doors,” she said, “and continue to educate people.”

Can a long-planned Duke Energy gas plant in North Carolina be defeated? is an article from Energy News Network, a nonprofit news service covering the clean energy transition. If you would like to support us please make a donation.