NC lawmakers gave Duke Energy new climate goals 4 years ago. Now they want to undo them

Duke Energy would no longer have to comply with a carbon reduction goal the legislature instituted just four years ago, under a new bill filed Monday.

The proposal, Senate Bill 261, is sponsored by top-ranking Republican Senate leaders — including Sen. Paul Newton, a former president of Duke Energy’s North Carolina operations — and is being fast-tracked at the GOP-controlled legislature. A Senate committee is scheduled to debate the bill Tuesday morning.

The bill would also let Duke and other utilities start charging customers for new natural gas or nuclear plants while they’re still under construction, through a financing mechanism known as Construction Work in Progress. That means customers could be footing the bill for projects that are delayed or never completed — a system that has led to multibillion-dollar losses for ratepayers in other states when projects failed.

In a news release, Newton and other bill sponsors focused on the part of the bill that eliminates carbon reduction goals, saying the changes are necessary to keep energy affordable.

“When utility companies are forced to initiate expensive, short-term solutions, North Carolinians have to pay the price,” Newton said. “Removing the interim carbon reduction goal will help keep electric rates stable and affordable.” He thinks the measure could save North Carolina ratepayers hundreds of millions of dollars on generation projects already approved by state regulators.

In 2021, lawmakers cut a deal with Duke as part of House Bill 951, giving the utility more freedom to raise rates with less state oversight in exchange for concessions to fight climate change. Duke agreed to phase out coal-fired plants, cut carbon emissions by 70% by 2030, and achieve carbon neutrality by 2050.

Former Democratic Gov. Roy Cooper worked with Republican lawmakers in 2021 to back the deal this new bill targets, specifically because of the climate-focused concessions it won from Duke.

In recent months, however, Duke has said it can’t meet the 2030 goal. And the North Carolina Utilities Commission has already allowed the company to delay its timeline — granting flexibility of up to two years under the current law.

Senate Bill 261 would go even further, completely eliminating the 2030 deadline and leaving only the 2050 target in place.

“We should be focused on ensuring our energy sources will meet carbon reduction requirements while remaining reliable and affordable,” Berger said in a news release.

Matt Abele, the executive director of the North Carolina Sustainable Energy Association, said the bill guts the state’s landmark climate plan and could lead to more expensive technologies, delaying North Carolina’s shift to cleaner energy sources. And while the bill sponsors said it would lower costs, Abele said the opposite is true.

"Energy resources like solar and battery storage continue to be the lowest cost home-grown options available in North Carolina," he said. "The bill introduced today would hinder connecting more affordable resources to the grid in favor of technologies that pose a greater financial risk to ratepayers."

While the new proposal would keep in place current requirements for a mix of utility-owned and third-party solar projects, some clean energy groups worry that eliminating the near-term carbon goal could slow investment in renewable energy and lock in fossil fuel infrastructure for decades.

If passed, the bill would mark a major shift in North Carolina’s approach to energy and climate policy, giving Duke and other utilities more time and flexibility — but less pressure — to cut emissions in the next decade.

“We’re focused on making substantial investments in our critical infrastructure to ensure reliability and keep costs as low and predictable as possible for our customers," Garrett Poorman, a Duke spokesman, said in a statement late Monday. "We are supportive of policies that enable us to meet the state’s growing energy needs, including those that advance efficient and always-on baseload generation resources.”

The company has been moving ahead with its plans to phase out coal-fired plants, in many cases replacing them with natural gas plants — a cleaner option, but not as clean as the renewable energy sources some advocates want to see. In January, the company won approval for construction of two new gas-fired plants in Person and Catawba counties.

“As we did at the existing coal plants, we will use the best available technology to reduce emissions, which will be significantly lower than the coal units that are retiring,” a Duke Energy spokesman said at the time. “We will meet all state and federal regulations to ensure surrounding neighbors and the environment remain protected.”