Five of Duke Energy’s seven coal-fired plants in North Carolina would be closed by 2030 and replaced with energy storage and a 900-MW simple-cycle natural gas plant under a bill given an initial public hearing before the state House Energy and Public Utilities Committee Thursday (H.B. 951).

The 47-page bill, which also calls for 5,000 MW of solar, is the result of months of negotiations with a group of industry stakeholders, led by the committee’s chairs Rep. Dean Arp and Rep. John Szoka, both Republicans.

But clean energy advocates have said the bill is the result of closed-door meetings — a claim Szoka rebutted in his opening statement at the hearing. The bill may not be perfect, he said, but “in my belief, everyone’s viewpoints were included in this process, even if they weren’t physically in the room.”

He pointed to the more than 5,000 MW of solar the bill would add to the state’s grid as being about “five to one” the capacity of the 900-MW natural gas peaker Duke would install to replace the 760-MW Marshall Units 1 and 2 coal plants.

But Maggie Shober, director of utility reform at the Southern Alliance for Clean Energy, said Szoka’s claim to inclusivity “just doesn’t fly” and, she said, the bill is “too prescriptive.”

“Why do we have a process to do an IRP [integrated resource plan] that’s overseen by a commission, which I’ll note is appointed by a Democratic governor,” Shober said in a phone interview with NetZero Insider. “Why go through all this, if the legislature is going to prescribe exactly how much of each resource that the utility needs to either retire or build?”

The bill specifically states that its provisions are “generally consistent with the electric public utilities’ current integrated resource plans,” that is, the IRPs submitted by Duke’s two North Carolina utilities, Duke Energy Progress and Duke Energy Carolinas. The plans have sparked wide opposition from environmental and energy organizations and have yet to be approved by the North Carolina Utilities Commission (NCUC). (See Outspoken Public Pushes for Duke to Lead on Climate.)

The South Carolina Public Service Commission on Thursday sent back Duke’s IRP for the state, which parallels the utility’s North Carolina plans, requesting modifications.

Performance-based Regulation

The coal plant closures are among the bill’s topline selling points, aimed at cutting carbon emissions from the state’s power sector by 61% from 2005 levels by 2030. Gov. Roy Cooper (D) has targeted a 70% cut by 2030 and net zero by 2050. Arp argued the lower figure, and additional natural gas, would balance the need for serious emissions reductions and grid reliability.

“God forbid that we are in a Texas situation where things froze over, or rolling blackouts like in California,” he said. “We don’t envision new technology that comes on that preserves the same dispatchability and reliability” as the coal plants.

Duke has also committed to a net-zero system by 2050, but its interim goal for 2030 has been a 50% reduction, and the utility’s IRP would keep 3,050 MW of coal and natural gas generation on the grid through 2035.

Other provisions in the bill include:

• Coal retirements: The five plants to be retired are the Allen plant, by the end of 2023; the Roxboro plant, by the end of 2024; Marshall Units 1 and 2, by the end of 2026; and Cliffside Unit 5 and the Mayo plant, both by Sept. 1, 2027. In addition to the 900 MW of natural gas at the Marshall units, replacements for the Allen plant would be 20 MW/80 MWh of energy storage.
• Renewable energy: Duke would be required to procure 777 MW of renewable energy per year through 2026, with 45% coming from third parties and 55% utility-owned projects.
• Nuclear: The bill directs Duke to submit license extensions to the Nuclear Regulatory Commission for its six nuclear plants in the state. It also authorizes the utility to spend up to $50 million to apply for an “early site permit” to develop an advanced nuclear plant.
• Performance-based regulation: The NCUC could approve performance-based regulation (PBR) that would decouple utility revenues and energy consumption, while providing incentives for “performance in targeted areas consistent with policy goals.”
• Multi-year rate plans:  PBR would also include multi-year rate plans, under which the NCUC could approve a utility’s base rate for three years, with up to a 4% increase allowed each year without additional approvals.

Speaking at the hearing, Kendal Bowman, Duke’s vice president of regulatory affairs and policy, said H.B. 951 represents “collaboration and compromise.” The PBR and multi-year rate plans would “hold the utility accountable for investments that support the policy of North Carolina, as we help facilitate the energy transition at the right pace,” she said.

Why No Wind?

But Tyler Fitch, Vote Solar’s regulatory director for the Carolinas, called the bill an “attempted power grab by Duke Energy. … It erodes the ability of state regulators to provide oversight over Duke’s investments and their rate hikes,” he said in a statement to NetZero Insider. “We all know more solar power would benefit North Carolinians, and there are ways to do that without handing Duke a blank check.”

Peter Daniel, director of government affairs for the North Carolina Chamber, came out in support of the bill. The Chamber has “historically supported an all-of-the-above energy approach that supports grid modernization and improves access to a sensible mix of energy resources, such as natural gas, nuclear, renewables, biomass and others,” he said. “This forward-thinking bill is the all-of-the-above approach we need at this moment.”

Kevin O’Donnell, of the Carolina Utility Customers Association, said the 4% rate increases in the multi-year rate plans could add up to 50% over a decade. His solution: cut costs by having all of North Carolina join an RTO, such as PJM, which already serves the northeast corner of the state. Allowing large industrial customers to “shop the market and bring power in” would also reduce congestion on the system, he said.

Committee members also raised concerns. Rep. Zach Hawkins (D) questioned the “mandate to move toward gas versus open source or all source” procurements. Rep. Jimmy Dixon (R) said the thousands of megawatts of solar in the bill could result in the “probably indeterminable cost of excellent farmland. We have to give some consideration to a more definitive understanding of the end of life on these facilities,” he said.

Rep. Beck Carney (D) wanted to know why wind power was not part of the equation for coal plant replacements and pushed Arp and Szoka to increase the bill’s carbon reduction target to Cooper’s 70%. “I hope as this bill moves forward, to get buy-in from a lot more people, we move closer to that 70%,” Carney said. “That is important to a lot of us.”