At first blush, North Carolina’s new bipartisan energy law is straightforward and far-reaching — directing regulators to make hefty pollution cuts from Duke Energy power plants in the next decade and whittle them down to near-zero by midcentury.
The targets are aligned with expert recommendations on how to avoid the most catastrophic impacts of climate change — a notable concession for the GOP-led General Assembly — and they match those long promoted by Gov. Roy Cooper, a Democrat.
But many believe the law contains errors and ambiguities that could at best lead to lengthy court battles — and at worst give Duke the reins to build a raft of fossil gas plants in place of solar and wind farms.
From Cooper to legislative leaders to Duke, nearly everyone involved in crafting the compromise insists there is no question that regulators — not the utility — will control how the targets are met.
But lawmakers declined to amend the bill to make that clearer as it moved rapidly through the legislature this month, and they remain iffy on whether a technical corrections bill — a clean-up mechanism that typically comes at the end of the legislative session — will include changes to the law formally known as House Bill 951.
“I don’t know about a technical corrections bill,” Cooper said at a ceremony when he signed the legislation, flanked by Republican and Democrat leaders from both chambers of the General Assembly. “What I believe would happen is that we would all need to agree on any such thing. I’m open to talking to these four leaders about that if it’s necessary.”
‘Inartful drafting’
A rewrite of a heavily criticized measure that squeaked out of the House this summer, House Bill 951 cements into law the goals of the state’s Clean Energy Plan, a 2019 document crafted by the Cooper administration after months of public meetings and stakeholder input.
The statute aims to cut pollution from Duke’s power plants 70% by 2030, compared to 2005 levels. By 2050, the company must cut its emissions by at least 95% and offset the rest by planting trees or taking other actions to achieve full carbon neutrality.
Tasked with taking “all reasonable steps” to achieve the reductions is the North Carolina Utilities Commission, a seven-member panel composed of six Cooper appointees, with a seventh awaiting confirmation from the General Assembly.
Critics blanch at the language that comes next, which first directs the commission to, “develop a plan, no later than December 31, 2022, with the electric public utilities, including stakeholder input, for the utilities to achieve the authorized reduction goals…” Five lines later, the law says that the Carbon Plan, “shall be reviewed every two years and may be adjusted as necessary, in the determination of the Commission and the electric public utilities.”
At best, the text leaves to the beholder how much control Duke utilities have over the formulation and the tweaking of the plan. At worst, it gives Duke authority equal to its regulator.
“It’s inartful drafting,” admitted Sen. Julie Mayfield, an Asheville Democrat who helped negotiate the compromise and co-directs the environmental advocacy group MountainTrue. “And it’s groups that don’t trust Duke, understandably, reading this with an eye toward how Duke can twist this to their advantage.”
Vastly different energy futures
Duke has demonstrated a clear preference for building new fossil fuel gas plants and minimizing renewables. Early this year, the company presented two scenarios to the commission for reducing its pollution 70% by 2030. Both 15-year plans forecast over 6 gigawatts of new gas plants, and they were up to 20% more costly than the company’s preferred course of reducing its emissions by 60%.
Last year, the company also laid out its vision for carbon neutrality by 2050 for its entire six-state territory. That document showed the company was banking on renewables supplying just 36% of electricity in mid-century, while a suite of not-yet-commercially viable or untested technologies made up almost a third. As in its 15-year plan, Duke also banked on a fleet of new gas units that would have to be mothballed in less than two decades — early retirements that would cost ratepayers.
Clean energy businesses and advocates criticized these blueprints and commissioned their own independent pollution-reduction plans. One, by Synapse Energy Economics, found Duke could cut its pollution 74% by 2030 without building any new gas plants — relying instead on 17.8 gigawatts of large solar, 11.8 gigawatts of new battery storage, 2.5 gigawatts of land-based wind farms, and 750 megawatts of offshore wind. Compared to Duke’s preferred plan, the blueprint includes significantly more solar, over three times as much onshore wind, and five times as much battery storage — all for $7.5 billion less.
The sharply different scenarios raise the stakes for how the law will be interpreted. But lawmakers who crafted the compromise maintain that regulators are supposed to be in control. “We’re not putting Duke on par with the Utilities Commission,” Mayfield told Energy News Network. “That’s not ever what we’re doing.”
Public assurances vs. the law’s ‘plain meaning’
Sen. Paul Newton, a Republican of Cabarrus County, a former Duke Energy North Carolina president, and another chief negotiator, said something similar as the compromise moved through the legislature. “The commission is the ultimate determiner of whether the plan gets adjusted,” he told fellow senators at one committee meeting.
Duke itself weighed in with a letter to Dionne Delli-Gatti, the North Carolina Clean Energy Director under Cooper. “H951 does not, in any way, give Duke Energy equal footing with the Commission or veto power over Commission decisions with respect to the Carbon Plan,” the letter said. “The legislation does not suggest, nor would Duke Energy ever assert, that Duke Energy is a co-equal of the Commission with respect to decision-making authority under the legislation.”
Cooper echoed that view at the bill-signing ceremony. “There is no doubt that the Utilities Commission controls this process,” he told reporters. “They make the final decision.”
But critics say what matters is the text of the law itself. North Carolina case law says courts must first look at the plain meaning of the statute, and only examine legislative intent if the language is ambiguous. While some observers believe the Carbon Plan unambiguously gives Duke veto power, the matter would no doubt provoke a lengthy court battle if the company tried to exert it.
Technical corrections on the horizon?
The Carbon Plan provision isn’t the only worry. The Carolinas Clean Energy Business Association, a trade group for the state’s renewables industry, believes other drafting errors and ambiguities could unintentionally raise costs, stymy solar or allow Duke to cut into the share of solar projects allotted to private developers — currently at 45%.
“Other stakeholders from customers to environmentalists have raised similar concerns about vagaries and potential loopholes in this new law,” Chris Carmody, the group’s director, said over email.
To be sure, correcting these deficiencies wouldn’t satisfy all the law’s opponents, who say it leaves low-income ratepayers in the cold and includes other wiggle words that Duke could use to delay the clean energy transition. But the changes would at least help ease its implementation — already a hefty task — and avoid unnecessary delays.
“Addressing these concerns now would save ratepayers a significant amount of money and avoid unnecessary work for the… Utilities Commission and the [ratepayer advocate] Public Staff,” Carmody said.
Rather than entertain amendments on the bill to address these issues, Newton indicated in one committee they could be solved by the annual “technical corrections bill,” an amalgam of typo corrections that usually appears at the end of lawmakers’ session.
But Newton appeared to drop the idea later when presenting House Bill 951 to the full Senate. And the day the measure was signed into law, Cooper and legislative leaders hedged about the prospect.
“The ink is not dry on this bill,” quipped President Pro Tempore Phil Berger, Republican of Rockingham County. “Obviously we’re going to see how things proceed from today forward, and if there are changes that need to be made, we’ll look at those.”
If lawmakers do propose a cleanup bill, it will have to wait until after they resolve at least two other weighty matters: reaching agreement on a two-year state budget and drawing legislative districts.
“We haven’t determined about technical corrections bills yet,” said House Speaker Tim Moore, Republican of Cleveland County. “That’s normally something we do at the end of the session, and unfortunately, we’re nowhere near the end of the session.”