North Carolina Tries To Clean Up Its Electricity

By Dan Charles

Published June 29, 2019 at 5:49 AM PDT

Emissions rise from the Duke Energy coal-fired Asheville Power Plant ahead of Hurricane Florence in Arden, N.C., in September 2018. Regulators are supposed to make sure Duke Energy delivers reliable power at the lowest possible cost — and that's always been interpreted as cost to the consumer, not cost to the environment.

Let's say you want to help stop global warming and kick your gasoline habit.

You buy an electric car. And then you go to charge it up and you think: Wait, where's this electricity coming from?

Nationwide, 60% of it comes from power plants burning coal and natural gas, belching carbon dioxide. And across the country, energy experts are trying to figure out what might persuade these electric utilities to change.

It's a hot issue in North Carolina. Last fall, Gov. Roy Cooper declared that the state would try to reduce its greenhouse emissions by 40% by 2025, compared 2005 levels.

The state can do this most quickly and easily at power plants, replacing coal and gas with wind and solar power. So energy experts now are trying to hammer out a plan for how to do it. The goal is controversial, but the debate isn't nearly as partisan as it used to be. That's mainly because wind and solar power have become much cheaper.

They've won over state legislator John Szoka. "I would describe myself as a conservative Republican who has come to believe in renewable energy based on the economic facts behind it," he says.

There's now a whole industry pushing clean power. "We've got low-cost clean energy that's like fruit falling off the trees. It's laying on the ground, it's been rotting for 10 years, and let's just pick it up!" says Ivan Urlaub, from the North Carolina Sustainable Energy Association, which represents some wind and solar companies.

Others, like Democratic state Rep. Pricey Harrison, mainly want to fight climate change. "I would like us to move away from fossil fuel dependency completely," she says.

All this pressure is aimed at one company, Duke Energy. It's the electricity provider in most of North Carolina. It's owned by shareholders, but regulated by the North Carolina Utilities Commission. This is a very common arrangement across the country.

Duke Energy occupies an office tower in downtown Charlotte. It's the second-highest building in North Carolina. The view from the 36th floor is spectacular.

Randy Wheeless, a company spokesman, lays out some of the basic facts about his company: It's one of the largest electric utilities in the country, covering six states, delivering electricity to 7 million customers.

It also released 105 million tons of carbon dioxide last year.

That's equal to the total greenhouse emissions of a small country, like Greece or Chile. Wheeless points out that the company generates a third of that electricity from nuclear plants, with no greenhouse emissions. Also, the company's emissions are falling. Duke Energy's been shutting down coal-burning power plants, switching over to natural gas, which is cheaper and releases less carbon.

It plans to keep doing this, reducing emissions by another 40% over the next 15 years. Yet this plan also means a big investment in natural gas plants — and those plants still release a lot of heat-trapping carbon dioxide. According to the Intergovernmental Panel on Climate Change, avoiding the worst effects of climate change will require shutting down greenhouse emissions from the power sector almost completely in the coming decades.

"What would it take for Duke Energy to cut [its emissions] by 90 percent?" I ask.

"That's going to be tough," Wheeless says. "I think what you're looking [at], you're going to have to have some sort of carbon capture; some sort of new technology that's not really on the table right now."

I press him on this. Couldn't they do more with technology that's available now?

Wheeless says they can't. Going faster, he says, would make electricity more expensive. "I think a lot of environmentalists talk about the end of the world, but there are a lot of people still worried about the end of the month, and how to pay bills," he says.

For everybody in the state who's been pushing for a big quick shift to clean energy, this is frustrating. In February, dozens of North Carolinians showed up at a meeting of the utilities commission, demanding that the regulators reject Duke Energy's plans.

"It is critical to move to a just transition to 100 percent renewable energy fast, y'all, with the urgency of the crisis that we are in," said Karen Bearden, from Raleigh.

It's not clear what regulators will do, though. Under North Carolina law, they're supposed to make sure that Duke Energy delivers reliable power at the lowest possible cost — and that's always been interpreted as cost to the consumer, not cost to the environment.

It's a puzzle that people are trying to figure out all over the country. How do you get electric utilities to go green?

States in the Northeast are forcing them in that direction with a "cap-and-trade" system that's intended to make burning fossil fuels steadily more expensive.

In North Carolina, some are calling for more competition in the energy business. They include Jim Warren, executive director of an environmental justice organization called NC WARN. Warren thinks that if other companies had a chance to offer Duke Energy's customers a better deal, they'd prove that clean energy is cheaper. "What we would really like to see is the monopoly be restructured where we have competition, and then let the marketplace figure it out," he says.

Others, though, say that regulated monopolies like Duke Energy can be motivated to cut carbon emissions drastically. According to Cara Goldenberg, a senior associate at the Rocky Mountain Institute, a nonprofit energy consulting group, it's just a matter of giving these utilities the right incentives. "You don't necessarily need to use sticks all the time," she says. "There's also carrots, right? There are these business model incentives to bring the utility along in this transition."

For instance, she says, regulators can change the rules so utilities don't just earn money selling electricity; they can also get paid for cutting their greenhouse emissions. "Give the utility a goal. If you meet that goal, you'll get rewarded. If you don't meet that goal, there could be a penalty," she says.

Regulators also could let a utility charge its customers higher rates to recover the cost of upgrading its electrical grid, so that it's ready to handle electricity generated by solar arrays on millions of people's homes. Regulators could let utilities charge customers for the costs of managing the demand for power, rather than just supply. Conceivably, a utility could control its customers' hot water heaters or electric car chargers, turning them on and off so that demand for electricity always matches what's being generated by the wind and the sun, hour by hour.

Goldenberg says that these financial tools do work. Some states, like Colorado and Hawaii, are using them successfully, turning utilities into partisans of clean power.