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NC regulators approve Duke, Dominion resource plans, but want more coal data

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NC regulators approve Duke, Dominion resource plans, but want more coal data

North Carolina utility regulators approved the latest 15-year integrated resource plans for the state's three investor-owned utilities. However, Duke Energy Corp. utilities will have to submit more data on retiring coal-fired plants early.

In an Aug. 27 order, the North Carolina Utilities Commission ruled that the 2018 resource plans for Duke Energy Carolinas LLC, Duke Energy Progress LLC and Dominion Energy North Carolina, known legally as Virginia Electric and Power Co., were "adequate for planning purposes" and therefore accepted. However, the commission has raised concerns about the Duke utilities' plan to continue using their coal fleet until they have been fully depreciated because those plants' current capacity factors "are substantially lower than the historical capacity."

"It does not appear from the information in the IRPs that [Duke Energy Carolinas] and [Duke Energy Progress] have fully considered early retirement of any of these coal plants by replacing their contributions with other alternative generation resources or with energy efficiency and demand-side management resources," the commission's public staff wrote in the order.

Duke Energy Carolinas and Duke Energy Progress will need to send in an analysis that examines if operating their remaining coal-fired units is the least cost alternative compared to supply-side or demand-side resources, or if the coal capacity "fulfills some other purpose that cannot be achieved in a different manner."

In addition, the Duke Energy utilities will need to include in their 2020 resource plan a scenario that does not assume that coal will be part of their generation portfolio until the energy facilities are fully depreciated. The utility commission instead wants the companies to model the plants' continued operation "under least cost principles" and include coal ash cleanup costs in any cost comparison with alternative generation resources.

"If such analysis concludes that continued operation of the utilities' existing coal-fired units until they are fully depreciated is the least cost resource alternative, then the utilities' 2020 IRPs shall separately model an alternative scenario premised on advanced retirement of one or more of such units and shall include in that alternative scenario an analysis of the difference in cost from the base case and preferred case scenarios," the commission's public staff wrote.

Duke Energy Carolinas' resource plan included retiring all five units at the 1,130-MW G.G. Allen coal plant by December 2028, and assumes the retirement of the 546-MW unit 5 at the Cliffside coal plant in December 2032. Duke Energy Progress' plan included retiring the 384-MW Asheville coal plant in November 2019 and replacing it with the 586.4-MW Asheville combined-cycle gas plant as part of its more than $1 billion Western Carolinas Modernization Project. It also called for the retirement of the two oldest units at its four-unit Roxboro coal plant, representing 1,053 MW of capacity, in December 2028.

North Carolina has stepped up efforts to boost clean energy in the state through policy initiatives; the state's Department of Environmental Quality recently released the state's draft clean energy plan that suggests the power sector could reduce emissions by between 60% and 70% below 2005 baseline levels by 2030 through accelerated coal plant retirements, more aggressive renewables targets and either a carbon reduction or cap target. The initial recommendations stem from Gov. Roy Cooper's 2018 executive order for the state to address climate change and embrace a clean energy future.

Both Duke Energy and Dominion Energy North Carolina's parent company, Dominion Energy Inc., have emphasized investments in clean energy and emission reductions. Duke Energy's current five-year $37 billion growth capital plan includes $28.8 billion on electric utilities, including regulated renewables, and $1.5 billion for commercial renewables. In March, Dominion announced the company would target a 55% reduction in carbon emissions and a 50% cut in methane emissions by 2030 while shutting down fossil fuel units and ramping up renewable resource investments. (NCUC Docket No. E-100, SUB 157)