Stifling solar: Duke Energy’s long war against North Carolina clean energy

Duke Energy is asking North Carolina utility regulators to approve a plan that could stifle the growth of renewable solar power in the state while hiking ratepayers’ bills – the latest in the monopoly utility’s almost decade-long fight against clean energy in the state.

The North Carolina Utilities Commission, or NCUC, is reviewing Duke’s proposed new rooftop solar program. It’s based on an energy tariff settlement – more like a rush to judgment – that Duke’s monopoly utility subsidiaries Duke Energy Carolinas and Duke Energy Progress signed in November with solar industry associations and solar advocacy organizations.

If adopted, the program would reduce the value of solar for customers by 30 percent or more. That’s why EWG and others are pushing back against this plot to halt clean energy.

Three solar installers, which broke with their trade associations, and utility expert Bill Powers, commissioned by ratepayer advocacy NC WARN and the groups North Carolina Climate Solutions Coalition and Sunrise Movement Durham Hub, all oppose the plan.

EWG, along with advocacy organizations 350 Triangle, 350 Charlotte, and North Carolina Alliance to Protect Our People and the Places We Live, also filed comments against the plan.

EWG also commissioned utility expert Karl Rábago to file comments on the best approach to assessing the costs and benefits of customer-owned, rooftop solar.

The serious flaws with Duke’s effort to throttle solar:

  • It violates state law

State law requires that Duke perform a rooftop solar cost-benefit analysis. The utility cites a rate design study in a separate NCUC proceeding as satisfying this mandate, but that’s not the required analysis. As the state attorney general’s office has said, Duke must investigate the potential benefits of rooftop solar, not just the costs. These benefits include avoided electric system infrastructure costs; avoided power generation costs; avoided carbon and other emissions harmful to public health; enhanced electric system resilience to keep the lights on during severe storms or drought; economic development and job creation; and systemwide lower costs for all ratepayers.

State law also requires a least-cost electric system and the avoidance of unnecessary power plants and infrastructure investments. Undermining customer-owned solar investments gives Duke license to expand the electric system beyond what would otherwise be needed, resulting in a high-cost, not a least-cost, power system.

  • It makes energy more expensive for ratepayers

Duke’s plan would add other fixed charges to customer bills and fails to compensate ratepayers fairly for power they export to the electric system. This punishes solar customers for using less power than other ratepayers do. If a solar user’s bill is lower than Duke’s fixed minimums of $22 for Duke Energy Carolinas and $28 for Duke Energy Progress, they still must pay Duke the difference.

Rather than compensate customers fairly with an export rate that reflects the true benefits of customer-owned solar, Duke proposes a drastically lower rate that reduces customers’ incentive to invest in solar.

  • It uses flawed logic for setting rates

Duke also proposes rates that vary according to the time of day, also called time-of-use rates. The cost to deliver power varies during the day, depending on the electric demand on the system. But Duke requests time-of-use rates that set the higher time-of-use rate two hours later than the hours of the day when electric demand is actually the highest, further reducing the value of solar to customers. Instead of beginning at 4 p.m., as the higher rates should, Duke proposes 6 p.m., when solar panels produce little to no power.

Duke’s current assault on rooftop solar reflects ongoing efforts by the company for the better part of decade to undermine customer-owned solar through high fixed charges. Indeed, in its annual filings with the Securities and Exchange Commission, Duke Energy consistently points to rooftop solar and energy efficiency as threats to its bottom line.

Throttling rooftop solar as much as possible is part of a greater effort by the company to ensure a high-cost electric system that increases the power company’s profits.

Early in the 2010s, Duke abandoned wind power in the Carolinas for being too difficult to site and faulted solar for needing subsidies. Instead, the utility invested in an overbuilt, expensive natural power plant fleet – apparently ignoring the substantial and continuing declines in cost for wind and solar and the fact that fossil fuels also get subsidies.

Recently, Duke embraced NuScale’s modular nuclear power unit design, which will not be available for over a decade and which has experienced $3 billion in cost overruns already in the design phase. Because Duke appears to have decided that nuclear is going to be its next misguided energy investment, the utility’s war on solar is likely only to increase, not abate.

As with the proposal NCUC is considering, Duke is expected to keep attacking solar plus battery storage and energy efficiency investments to justify the need for modular nuclear units that will never be able to compete with these clean energy technologies.

North Carolina state law says energy rates and charges should be “just and reasonable . . . without unfair or destructive competitive practices . . . by avoiding wasteful, uneconomic, and inefficient uses of energy” – yet Duke’s plans violate all these restrictions.

The company has mounted an incessant assault on ratepayer savings through rate designs and data manipulation inimical to energy efficiency and solar investments. These are “destructive competitive practices” against ratepayers that thwart least-cost, clean and reliable solar.

Duke is systematically pursuing the legislative and regulatory fixes it needs to slowly throttle its competition, and setting a pace of change that adheres to its business plan. The utility uses every chance it can get to cement control over the electric power system, eliminate competition and protect its existing investment while making plans for additional high-cost power generation options and boosts to its stock price – no matter the cost to ratepayers or the climate.

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