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Duke opposes NC legislation to study power market reform


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Duke opposes NC legislation to study power market reform

Duke Energy Corp. opposes North Carolina legislation to study power market structures that could lead to more competition for energy generation across the state through a regional transmission organization.

"We do not see the need for a study at the time, and believe the collective focus on our state's clean energy transition should not be hindered by counterproductive initiatives," Duke Energy spokesperson Grace Rountree said.

The legislation, House Bill 611, resembles a bill passed by South Carolina in 2020 to study electricity market reform and potential benefits for customers, including a potential RTO.

State Rep. Larry Strickland, a Republican who represents parts of Johnston and Harnett counties, along with a bipartisan group of legislators, introduced the North Carolina bill.

Duke Energy supported South Carolina's legislation, but Rountree said the states are in different phases of their energy transitions and have different systems in place.

"North Carolina is poised to make great progress towards modernizing our state's energy plans under a regulated model that holds energy providers accountable for reliable power and investing appropriately for the state's needs now and in the future," she said.

South Carolina's legislature already laid the groundwork for energy transition policy, Rountree said. South Carolina lawmakers "specifically identified the importance of examining the state's energy transition by establishing a process that will look at all aspects of the current way electricity is produced and delivered to customers," she added, and Duke Energy plans to continue to work with the state to move those goals forward.

Legislation examining wholesale power markets is being introduced as major Southeastern utilities have embarked on a process to establish what they have dubbed the Southeast Energy Exchange Market, or SEEM. The proposed market would, according to the utilities, led by Southern Co., save millions by modernizing an existing bilateral trading system that allows utilities to supply excess power through spare transmission capacity.

Earlier in May, the Federal Energy Regulatory Commission responded to a request by the group of utilities to establish the market with a deficiency letter asking a list of questions about how it would operate. Specifically, FERC sought information about processes related to governance, potential market manipulation and how the market might interact with neighboring transmission systems.

Strickland's power market study bill in North Carolina has become the target of negative advertisements circulating primarily on social media. The ads include lines like, "Tell Rep. Larry Strickland, 'Don't raise my power bill,'" suggested the legislation could harm North Carolina energy customers and called RTOs a "Really Terrible Option."

The group that launched the campaign ads, Citizens for a Responsible Energy Future, was founded by former Duke Energy executives and received $500,000 in donations from Duke Energy Carolinas LLC during the state's primary elections, according to an April 2020 report by Energy News Network.

South Carolina Republican Sen. Tom Davis, the sponsor of the study bill there, in a May 20 tweet, said Duke Energy was "acting clandestinely via an insipid 'citizens group' account to attack" Strickland.

Duke Energy declined to comment on the negative ads. Strickland's office also declined to comment on May 25.

An anticipated larger legislation package for North Carolina's energy future is still in the works. On a call earlier in May, Duke Energy Chair, President and CEO Lynn Good told analysts the company expects North Carolina legislators to pass a package in 2021 that would affect the state's clean energy transition. That legislation has not yet been introduced, and so far, most work on it has been out of the public eye.

"We remain optimistic for comprehensive energy legislation this year, aligned with our shared goals of generation transition and regulatory reforms needed to enable that change," Good said on the call.

Rountree said the timing for when the broader energy bill may be introduced "is in the hands of legislative leadership."