North Carolina approves controversial … by Duke Energy

A question from ​‘Regulatory surplus’

For major customers with 100Given the 1.5% clean energy commitment, a green tariff is a necessity in North Carolina because Duke has a monopoly there and cities, data centers and the like cannot buy clean energy directly from solar farms.

In theory, a green tariff allows companies like Google or Amazon to source a new supply of clean energy equal to their electricity needs, with Duke acting as an administrative intermediary. An earlier version of Green Source Advantage did more or less exactly that.

But accounting became more complicated in 2021when a bipartisan state law required Duke to reduce its carbon emissions by at least 95% from 2050If the company is already legally obliged to build numerous solar parks, can a major customer rightly claim that its support for a single project makes a difference?

This question from ​“Regulatory excess” triggered a flood of arguments and counterarguments before the Commission. 18 months. Duke initially claimed that ​“Additionality was neither feasible nor necessary, and some companies said it was enough for them to contribute to supporting the energy transition. More than a dozen local chambers of commerce and prospective customers wrote to regulators to support the original program.

But Google, the U.S. Department of Defense and other major customers joined clean energy advocates in calling attention to the problem of regulatory overkill, as did the Center for Resource Solutions, a nonprofit that certifies voluntary renewable energy purchasing programs. Duke University, which has no ties to the utility, said it would not participate in the tariffs.

‘A small step in the right direction’

The debate and the Commissioners’ suggestions prompted Duke Energy to ​“The alternative allows large customers to gain about $100 million in resources, 150 Megawatts of solar energy per year by funding projects that were not selected in the company’s annual tender process. Duke receives a retroactive credit for this every two years. ​“extra” Solar as part of compliance with 2021 Law.

Clean energy advocates believe the new option is a ​“small step in the right direction.” But they note that it is 1 Gigawatts of clean energy over 10 years, one fifth of the entire program. Customers who are entitled to the remaining 4 They say that a capacity of several gigawatts would have no impact on the state’s transition to clean electricity.

​““If you are a customer of a company that claims to be supporting our state’s energy transition by participating in the program, you expect the company to actually make a difference and not just subsidize what Duke would do anyway,” says Nick Jimenez, senior attorney at the Southern Environmental Law Center.

The Carolinas Clean Energy Business Alliance, a group of clean energy providers, also criticized the acceleration option. And while the Carolina Utility Customers Association, another group of large industrial customers, did not oppose the revised rate proposal, it expressed skepticism.

“(Our) members have little interest in the Resource Acceleration Option,” the group said in a letter to regulators. ​“This would deliver electricity at a higher price without realising the environmental benefits based on regulatory surpluses that would be useful for achieving companies’ environmental, social and governance objectives.”

Reason for hope?

While supporters have little to be happy about the Commission’s approval of the Green Source Advantage Choice program, they still have a faint reason for hope.

One of these is the so-called Clean Transition Tariff, which Duke could propose later this year. An outgrowth of an agreement reached in May between the energy supplier and Amazon, Google, Microsoft and Nucor, this program could enable participating customers to initiate new projects, such as combinations of solar and battery storage or small nuclear power plants that provide carbon-free electricity around the clock.

​“This is not within the scope of the order,” Jimenez said, but the May Memorandum of Understanding, ​“is the great opportunity for something better.”

Duke says the Clean Transition Tariff is another voluntary option for customers and not a replacement for the option just given the green light. ​“We see the approval of Green Source Advantage Choice as a first step,” said the company’s Stewart. ​“This allows us to move forward with new tariffs such as the Clean Transition Tariff.”

Maggie Shober, research director at the Southern Alliance for Clean Energy, agrees that the Memorandum of Understanding is cause for optimism. However, she also notes that it is only ​“an agreement to talk about something. It could be an opportunity,” she said. ​“or it could be a missed opportunity.”

And no matter what happens, the Clean Transition Tariff will not include municipalities and other mid-sized customers with climate commitments. If those customers refuse to take the Green Source Advantage Choice, their only option will be to wait for Duke to adjust.

Commissioner Jeffrey A. Hughes pointed out this possibility in a concurring statement.

​“Once the program is launched, it will quickly become clear whether the program is as attractive as Duke claims,” Hughes wrote. ​“If concerns persist and interest is modest to begin with, I hope Duke will quickly move forward with new programs that will have a greater impact.”