Opinion: IRA should push NC regulators to review Duke’s carbon plan | Daily News Byte

The following commentary was written by Steve Smith, former chairman of the NC Environmental Management Commission. See our commenting guidelines for more information.

This summer, as the North Carolina Public Utilities Commission prepared to hear testimony from Duke Energy and others on a state carbon plan the commission must issue by the end of this year, something unexpected happened: After months of stonewalling, Sen. Joe Manchin ( DV.V.) agreed to compromise on federal climate finance.

Shortly thereafter, on August 16, President Joe Biden signed the Inflation Reduction Act (IRA), which is estimated to send $391 billion in climate and clean energy spending into the economy over the next 10 years. The law is a game changer that was not expected when Duke Energy proposed a plan to the Commission in May to reduce carbon dioxide emissions by 70% below 2005 levels by 2030 and achieve net zero CO2 emissions by 2050.

The federal government has yet to issue guidance on some provisions of the IRA, and it is impossible to predict exactly what impact this surge in clean energy investment will have. But it will be significant and will further undermine Duke Energy’s claim that new fossil gas infrastructure should be part of the state’s carbon plan.

A number of litigants have already argued that new gas is not needed and that renewables and energy storage and conservation programs could achieve the goals at “least cost,” a criterion the Commission must meet.

The IRA could very well offset the new gas from the carbon plan in full. Here’s how:

• Duke argues that gas is needed for backup solar and wind power, but acknowledges that batteries and other types of energy storage serve the same purpose. The IRA offers a 30% tax credit not only for solar and wind farms, but also for storage, and the credit can go up to 70% for projects that meet other criteria. This dramatically reduces storage costs compared to gas.
• The IRA is directing $7 billion through state and local governments to enable zero-emission technologies in low-income communities. Duke could partner with installers, homeowners and property managers to install solar and batteries in low-income residences, providing those homes with power during outages and giving Duke a large inventory of batteries to power the grid during periods of peak demand, reducing the amount of gas that needs to be burned.
• The IRA makes low-interest loans available to shut down coal-fired power plants. Duke plans to close all of its coal plants by 2035, but could do so sooner and save customers money by using these funds.
• Two IRA programs to be administered by state agencies offer grants and rebates to homeowners and businesses to install energy-efficient appliances and weatherproof buildings. During the carbon planning process, Duke claimed that energy efficiency programs could reduce retail load by just 1%. Other parties and commissioners have pushed for higher levels, making the IRA more feasible than ever.
• The IRA is introducing a methane emissions fee between 2024 and 2026 that will likely increase the price Duke will pay for fossil gas.

Wind and solar power are already the cheapest forms of energy, and battery costs are falling rapidly. Everything in an IRA is designed to make those resources even more accessible.

Meanwhile, the price of gas has gone up this year, sending our electric bills through the roof. Duke’s increasing reliance on gas risks customers paying billions more than necessary, while making it harder to meet carbon reduction targets required by law.

Announcing another alarming climate report in April, UN Secretary-General Antonio Guterres said: “Investing in new fossil fuel infrastructure is moral and economic madness.

The commission shouldn’t commit North Carolina to the new gas frenzy in a climate-challenged world that’s putting its money toward renewables and efficiency.