Is Duke Energy planning our power grid or are they just guessing? – SACE | Southern Alliance for Clean EnergySACE

The nation’s third-largest energy company says it’s trying to meet carbon reduction standards, but Duke’s actions don’t seem to match his words.

Ben Adams | 5 September 2024

| North Carolina, South Carolina, transmission, utilities

In its final power transmission planning meeting on August 12, Duke Energy made a startling revelation: They are not Planning new modelling to determine the relative costs and benefits of new power lines over the next ten years.

This may sound technical, but it’s a big deal for anyone who pays an electricity bill.

Planning an electric grid is difficult, and the stakes are high. The power lines that utilities build affect how much pollution they put into the air, how often the power goes out, and how much we pay for some of our basic needs. Decisions about which lines to build where are based on a number of factors, including regulations, prices, energy flows, and more.

Electricity transmission lines can easily pay for themselves, but you have to do the math about where and when to build them to get the most bang for your buck. If you choose not to do the math, you’re in trouble. And unfortunately, that’s where we are.

Duke is America’s third-largest energy company, spanning six states, including large parts of the Carolinas and Florida. The consequences of Duke’s planning – or lack thereof – will be felt throughout the Southeast.

background

In 2011, the Federal Energy Regulatory Commission (FERC) issued FERC Order 1000, which, among other things, requires regional planning of electricity transmission to ensure that our power stays on, that we can survive hurricanes with minimal disruption, and that we are not left out of pocket at the end of the bill.

Order 1000 also requires Duke to plan its cross-state power grid to comply with the laws of the affected states and municipalities. This includes North Carolina’s Carbon Plan, which requires the state, and Duke Energy in particular, to achieve a 70% reduction in carbon dioxide emissions by 2030 compared to 2005 levels. Duke says it is doing its best to meet that goal. But its recent actions don’t seem to match its words.

Duke Energy says they are compliant, but a closer look at their efforts raises some troubling questions.

In its state-approved tariff, Duke has created a process called the Carolinas Transmission Planning Collaborative (CTPC) to comply with these and other FERC rules. But in its recent hearings before the North Carolina Utilities Commission (NCUC), Duke indicated that it not The state has committed to meeting North Carolina’s carbon plan by 2030 (though it still has six years to do so) and has asked for an additional five years to comply with the law, even though the law itself allows for a maximum grace period of two years.

Then, last week, during Duke’s recent CTPC meeting with stakeholders, they unveiled their latest draft transmission study plans. For the second time in a matter of weeks, Duke appeared to be planning less than it claims: Duke’s planning documents show it will study three scenarios for energy supply over the next decade, measuring six potential benefits of new transmission lines. (This is below the 20-year time frame and seven benefits required by FERC’s newly issued Order 1920, which covers regional planning. While the CTPC is a local process and therefore does not have to comply with 1920, the broader regional planning process will ultimately rely on Duke’s research and modeling work.)

Only one of the three scenarios appeared to generate enough carbon-free electricity to reach the 70 percent reduction threshold—and Duke ruled that scenario out as too expensive, in part because of a suspiciously high cost estimate. Duke apparently favors a different scenario for achieving a 70 percent reduction by 2035, based primarily on an aggressive buildout of new nuclear power plants. But that year is well outside the ten-year window of Duke’s current plan.

SACE was among the groups that asked Duke to consider a scenario in which all nuclear energy was not used, but Duke refused.

Duke recommends estimating the benefit rather than modeling it

Finally – and perhaps most damningly – Duke indicated during the CTPC meeting that it will not conduct new production cost modeling for its three future scenarios. In effect, this means that Duke does not have a clear idea of ​​all the costs associated with building new transmission lines, particularly whether those lines will pay for themselves in the form of cheaper power, fewer repairs, greater choice and flexibility for customers, less line congestion, or any of the numerous other economic and non-economic benefits the new lines may bring.

When asked about this point, Duke said it will use the results of existing zone models (created for Duke’s annual Integrated Resource Plan, a separate process that does not address transmission) to derive costs for its future scenarios. Zone-based electricity prices are generally considered less accurate than more detailed “node pricing” used by nearly all transmission planning groups in America, including the Mid-Atlantic states, New England, Texas, California, New York and the Midwest.

Put more simply, however, Duke concludes that the transmission Cost from a matter other than the transmission Plans. This makes about as much sense as trying to design a new house based on the floor plan of the house next door. It just doesn’t work unless you’re extraordinarily lucky or don’t mind asking half the family to sleep on the floor (which means overcharging them for electricity, not being able to handle blackouts and winter storms, etc.).

It doesn’t have to be that way

Electric transmission planning is a technical and often abstract matter, and it’s difficult to know what effective planning looks like. But it’s instructive to compare Duke’s process with that of peers. At MISO, the organization responsible for electric transmission planning in the upper Midwest and neighboring states of Louisiana, Arkansas, and Mississippi, a very different process takes place: MISO’s regional planning considers eight different benefits identified through stakeholder feedback. The planning spans a 20-year period, and it also creates node production cost models with and without the specific transmission solutions to get an accurate estimate of the benefits of those solutions.

Much of Duke’s planning work is proprietary, so we don’t know exactly what assumptions are being made, how decisions are being made, what information is being collected and quantified, or how the information that isn’t collected is being handled. Perhaps, as Duke keeps telling us, its planning process is the most efficient use of its considerable resources. But there is clearly a need for those of us affected by its decisions – the electric customers, the legislators and energy buyers, the public – to take a look at the data and decide for ourselves. If we don’t, we are choosing to trust them and, when the time comes, pay the bill.