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Doing the math on Duke Energy’s “climate strategy” — and its campaign contributions

[1]Duke Energy calls its new net-zero carbon emissions plan a “directional beacon,” but for critics of the utility, the proposal is blind to the drivers of climate change.

Tuesday’s announcement [2] from the energy titan offered no hard-and-fast numbers in which to hold the utility accountable, stating only that by 2050, Duke will have phased out coal. The company will still use natural gas. The utility also said it “hopes to have a new set of generation resources that are low- to no-carbon. These include new nuclear technologies, longer-lasting energy storage and other options we haven’t even considered yet.”

But the utility’s plan ignores an inevitable increase in methane — a potent greenhouse gas even more destructive than carbon dioxide — from an increased use of natural gas. Nor does the plan address how the utility will offset a projected 5.5 million tons in additional carbon emissions each year from just two of its natural gas plants.

Critics point to Duke’s recent Integrated Resource Plan — a 15-year road map for the utility’s energy sourcing: natural gas, coal, nuclear power, hydroelectric, battery storage, solar and wind.

The IRP, filed Sept. 3 with the NC Utilities Commission, shows a 22 percent increase of fracked natural gas over last year’s plan. Jim Warren, executive director of NC WARN [3], a frequent critic of Duke Energy, added that the IRP indicated “a continuing, pathetic commitment to renewable energy and battery storage.”

Duke plans to generate just 9 percent of its power from renewable sources in the Carolinas by 2034.

Recent scientific analysis has shown that methane leakage rates from natural gas infrastructure is as much as 4 percent. Duke plans to expand its use of natural gas; it also co-owns the $8 billion Atlantic Coast Pipeline, which is years behind schedule because of successful court challenges.

“Even if methane weren’t leaking and venting at horrifying levels, building fossil fuel plants in 2020 is morally criminal,” Warren said.

Duke spokeswoman Erin Culbert said the utility is investing in technology to “substantially reduce methane emissions,” beyond the 45 percent decreases since 2005.

Culbert said the utility has replaced 1,500 miles of old cast-iron piping, which contributed to the leaks.  The majority of the gas system is new plastic or protected steel, she said.

“These improvements and replacements have dramatically reduced leaks or potential leaks across all our natural gas service territories.”

Although demand for natural gas in North Carolina has decreased — there is an oversupply — Culbert said Duke expects to rely on the fossil fuel to “speed the retirement of coal units” and to “complement the growing portfolio of renewable energy that we envision. This speaks to the applications we’ve submitted for more operational flexibility on some of our gas units to support renewables.”

That “operational flexibility” would emit an additional 5.5 million tons of carbon dioxide each year at just two of Duke’s natural gas plants. It’s unclear how that additional tonnage squares with the company’s near-term goal of cutting their 2005 carbon dioxide emissions in half or more by 2030.

In two permit applications filed this year with the NC Department of Environmental Quality (DEQ), the utility asked to emit more pollution from its Rockingham County Combustion Turbine Facility [4] in Reidsville and the HF Lee plant [5] in Goldsboro, in Wayne County.

The additional annual carbon emissions at the two plants total more than all of the “avoided” carbon — the amount not emitted — in one year, statewide. According to DEQ, the state recorded 4.7 million tons of avoided carbon in 2018, in part because of the state’s Renewable Energy Portfolio Standard.

The utility says the unpredictable nature of solar energy affects how Duke dispatches its electricity; specifically at the Rockingham and Lee plants, where solar energy loads change how the gas turbines are powered up and down. In turn, those ramp ups and ramp downs, as they’re called,  require extra operational time. And during the ramping period, the facilities are less efficient and emit more pollution.

In its permit application, Duke ruled out other options for managing solar energy’s uncertainty, including battery storage. While acknowledging that technology’s promise, the utility discounted it as a “near-term viable alternative.”

But that’s not an exhaustive list of alternatives to balance the system-wide energy load, said Warren.

Duke already has backup storage capacity of 2,300 megawatts, equivalent to the energy produced by two and a half nuclear power plants, Warren said. Duke also has a little-known hydroelectric plant at the North Carolina-South Carolina border, which can accommodate the variability in solar energy.

That facility features two nearby lakes, one at a higher elevation. When there is a demand for electricity, water flows from the upper basin to the lower basin, generating power. When they have “excess juice on the system,” Warren said, the utility can use the electricity to pump the water back uphill.

Not only does this system avoid carbon emissions, but, Warren said, “the system can be turned on and off quickly,” eliminating the ramping up and down problem.


Duke Energy PAC flouted law in its campaign contributions

The utility is also being scrutinized for more than $40,000 in campaign contributions made earlier this year to the legislative co-sponsors of Senate Bill 559 [6], which Duke Energy helped craft.

SB 559, which includes a controversial section authorizing the state Utilities Commission to allow Duke to set multi-year rates [7] — and thus potentially increasing energy costs for residential, commercial and industrial customers — is in a conference committee. The House demoted the controversial section to a study, but the Senate has yet to agree to the change.

Campaign finance watchdog Bob Hall, who led the advocacy organization Democracy NC [8] before his 2017 retirement, analyzed disclosure reports filed by Duke Energy’s PAC in July. Those reports covered the first six months of 2019. Eight contributions went to legislative leadership and the co-sponsors of SB 559 on Jan. 2, 2019, the eve of the session’s convening.

When Hall cross-referenced Duke’s report with those of the lawmakers, he noted that all eight of them had returned the checks. But Duke had not reported the refunds.

Duke acknowledged the PAC had written the checks in 2018, while the session was happening, but didn’t want the money credited until 2019.  It’s illegal for PACs to contribute to campaigns during legislative sessions, or even date checks that coincide with them. In addition, Duke’s PAC had already maxed out its contributions to the candidates — $5,200 each — so additional monies would have been illegal in 2018.

That’s why the contributions were “made” in 2019.

“Duke took steps to get the money back,” Hall said, “and they did it so quickly they wouldn’t be penalized.”

The problem, Hall said, is “Duke covered it up.” The PAC didn’t record the refund. “Instead of clearly stating it, they’re not disclosing, and trying to mask the wrongdoing and slip under the radar.”

Hall filed a formal complaint with North Carolina’s Board of Elections Wednesday morning.

Should the board pursue a civil penalty, the maximum amount is three times the contributions, or about $125,000.

Duke Energy spokeswoman Meredith Archie told Policy Watch that the utility “will review the complaint once we’ve received it and will reply accordingly with the State Board of Elections. The claim that we made illegal contributions is false and misleading. We are committed to remaining transparent with our employee PAC contributions.”

Rory McIlmoil, senior energy analyst for the environmental advocacy group Appalachian Voices, said Hall’s complaint “exposes the depth to which Duke Energy is willing to go to push its rate-making bill through the legislature, which is not surprising, given the hundreds of millions, if not billions of additional profits, that Duke stands to make if it passes.”