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North Carolina Tries To Clean Up Its Electricity

Jun 29, 2019

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.

Copyright 2019 NPR. To see more, visit https://www.npr.org.

SARAH MCCAMMON, HOST:

Let's say you want to help stop global warming by using less gasoline. You get an electric car. You go charge it up. And then you think, wait, where's this electricity coming from? Nationwide, 60% of it comes from power plants burning coal and natural gas, which produce carbon dioxide. So can the companies that provide our electricity change that? NPR's Dan Charles went to North Carolina to find out.

DAN CHARLES, BYLINE: North Carolina's governor, Roy Cooper, made a big announcement last fall.

(SOUNDBITE OF ARCHIVED RECORDING)

ROY COOPER: Today, I will sign an unprecedented executive order that sets the goal for our state to achieve a 40% reduction in greenhouse gas emissions by the year 2025.

CHARLES: The place where the state can do that most quickly and easily is at power plants - replace coal and gas with wind and solar, which is controversial, but it's not as much a partisan issue as it used to be. Because wind and solar are so much cheaper now, it changed the mind of John Szoka, a 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.

CHARLES: There are big companies pushing clean power now. Ivan Urlaub from the North Carolina Sustainable Energy Association represents some of them.

IVAN URLAUB: We've got low-cost clean energy that's like fruit that's falling off the tree, it's laying on the ground, it's been rotting for 10 years. And let's just pick it up.

CHARLES: And there are people saying we've got to stop climate change, like Democratic state legislator Pricey Harrison.

PRICEY HARRISON: I would like to see us move away from fossil fuel dependency completely.

CHARLES: And all this pressure is aimed at one company - Duke Energy. It's the electricity provider in most of North Carolina, owned by shareholders, regulated by the state utilities commission. This is a very common arrangement across the country. So I went to meet Duke Energy in an office tower in downtown Charlotte, the second-highest building in North Carolina.

I mean, look at this view - just...

RANDY WHEELESS: Yeah, so this is the convention center there. And there's the NASCAR Hall of Fame there.

CHARLES: Randy Wheeless is a spokesman for the company.

WHEELESS: Duke Energy's one of the largest electric utilities in the nation. We cover six states, a little over 7 million customers.

CHARLES: As for how much carbon dioxide the company releases every year...

WHEELESS: We are 105 million tons.

CHARLES: Of CO2.

WHEELESS: Right.

CHARLES: That's more than the total emissions of a small country, like Greece or Chile. Now, about a third of the company's electricity comes without any greenhouse emissions at all. It's from nuclear plants. And carbon emissions from its other power plants have been falling. It's been shutting down the ones that burn coal, mainly switching over to natural gas, which is cheaper and releases less carbon. It plans to keep doing this, reducing emissions by 40% over the next 15 years. But even natural gas still releases a lot of heat-trapping carbon dioxide.

What would it take for Duke Energy to cut that number by 90%?

WHEELESS: That's going to be tough. I think what you're looking there is 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.

CHARLES: I press him on this. Could they do more with the technology that's available now? Wheeless says no, going faster would make electricity more expensive.

WHEELESS: You know, I think a lot of environmentalists talk about the end of the world, but there a lot of people still worried about the end of the month and how to pay bills.

CHARLES: For everybody in the state who's been pushing for a big, quick shift to clean energy, this is frustrating. Dozens of North Carolinians showed up at a meeting of the state utilities commission in February, demanding that the regulators step in and reject Duke Energy's plans. Here's Karen Bearden from Raleigh.

(SOUNDBITE OF ARCHIVED RECORDING)

KAREN BEARDEN: It is critical to move to a just transition to 100% renewable energy fast, y'all, with the urgency of the crisis that we are in.

CHARLES: But it's not clear what regulators will do. Under North Carolina law, they're supposed to make sure that Duke Energy delivers reliable power at the lowest possible cost, and that's cost to consumers, 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 to, making it steadily more expensive to burn fossil fuels. In North Carolina, some people are saying let's bring in competition, like Jim Warren, director of an environmental justice organization called NC WARN - warn as in warning. He thinks if other companies had a chance to offer Duke Energy's customers a better deal, they'd prove clean energy is cheaper.

JIM WARREN: What we really would like to see is that, you know, the monopoly be restructured and we have a situation where we have competition. And then let's let the marketplace figure it out.

CHARLES: Others, though, say a regulated monopoly can do a great job cutting carbon emissions. Cara Goldenberg, a senior associate at the Rocky Mountain Institute, a nonprofit energy consulting group, says it's just a matter of giving those utilities the right incentives.

CARA GOLDENBERG: You don't necessarily need to use sticks all the time, but there's also carrots, right? There's also these new business model incentives that can bring the utility along in this transition.

CHARLES: For instance, she says, regulators can change the rules so utilities don't just earn money selling electricity. They can get paid for cutting their greenhouse emissions.

GOLDENBERG: Give the utility a goal. If you meet that goal, we're going to reward you. If you don't meet that goal, there could be a penalty.

CHARLES: Regulators could also let a utility charge higher rates for upgrading its electrical grid so it's ready to handle electricity generated by solar arrays on millions of people's homes. Or you could let utilities charge customers for the costs of managing the demand for power.

Conceivably, a utility could control its customer's hot water heaters or electric car chargers, turn them on and off, so the demand for electricity always matches what's being generated by the wind and the sun, hour by hour. Goldenberg says some states, like Colorado and Massachusetts, are already using these tools, and it's turning some electric utilities into partisans of clean power. Dan Charles, NPR News. Transcript provided by NPR, Copyright NPR.