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Commentary: Federal climate law should prompt N.C. regulators to reconsider Duke carbon plan
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The following commentary was written by Steve Smith, former chair of the N.C. Environmental Management Commission. See our commentary guidelines for more information.
This summer, as the North Carolina Utilities Commission prepared to hear testimony from Duke Energy and other parties on the state carbon plan that the Commission must issue by the end of this year, something unexpected happened: After months of stonewalling, Sen. Joe Manchin (D-W.V.) agreed to a compromise on federal climate funding.
Soon after, on Aug. 16, President Joe Biden signed the Inflation Reduction Act (IRA), which will send an estimated $391 billion for climate and clean energy coursing through the economy over the next 10 years. The law is a game-changer that could not have been anticipated when Duke Energy proposed a plan to the Commission in May for reducing its carbon dioxide emissions 70% below 2005 levels by 2030 and achieving net zero CO2 emissions by 2050.
The federal government still needs to issue guidance on some IRA provisions and it is impossible to predict exactly what impact this surge of clean energy investment will have. But it will be significant and will further undermine Duke Energy’s contention that new fossil gas infrastructure should be part of the state’s carbon plan.
Numerous parties to the proceeding already argued that no new gas is needed and that renewables plus energy storage and energy-saving programs could achieve the goals at “least cost,” a criterion the Commission is obligated to meet.
The IRA could very well price new gas out of the carbon plan entirely. Here’s how:
Wind and solar are already the cheapest forms of energy, and battery costs are rapidly declining. Everything in the IRA is designed to make those resources even more affordable.
Meanwhile, the cost of gas has spiked this year, sending our power bills through the roof. Duke’s increasing reliance on gas risks customers paying billions more than they need to, while making it harder to hit the carbon reduction targets required by law.
In announcing yet another alarming climate report in April, UN Secretary General António Guterres said: “Investing in new fossil fuels infrastructure is moral and economic madness.”
The Commission should not commit North Carolina to the madness of new gas in a climate-challenged world that is putting its money on renewables and efficiency.
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