South Carolina electric utility regulators have rejected plans by Duke Energy to shut down several coal-fueled power plants in 2030, replacing them with wind and solar power, with battery back-up, that the utility would either build or contract for.
The South Carolina Public Service Commission (SCPSC) directed Duke Energy to decide which of its integrated resource plans (IRPs) it preferred and to submit that plan for approval in the summer of 2021.
Duke Energy ultimately developed nine such options before submitting its preferred option to the SCPUC, which Duke referred to as its “earliest practicable” plan. This plan would have shuttered several large coal-fueled power plants by 2030, replacing them with wind and solar. Duke estimated its preferred plan would cost an estimated $82.4 billion.
The SCPUC rejected this plan in December 2021, choosing a less expensive option which defers some coal plants retirements until 2035, reduced by half the amount of solar power Duke proposed bringing online from approximately 10,000 Megawatts (Mw) to just 5,000 Mw, and cutting the utility’s proposed addition of 1,350 megawatts of onshore wind and 400 megawatts of battery storage.
The SCPSC cited data showing South Carolina was a relatively low wind state as the reason for rejecting Duke’s proposed wind power additions. Under the SCPSC approved plan, the estimated cost of Duke’s operations in South Carolina through 2035 would be approximately $78.6 billion
Different States, Different Paths
Like Dominion Resources in Virginia and Florida-based NextEra Energy Resources, Duke Energy has become an enthusiastic backer of renewable energy.
Duke’s preferred option was structured to align with the environmental standards of North Carolina’s recently enacted House Bill 951. Among other things, HB 951 mandates a 70 percent decrease in carbon emissions by 2030 from 2005 levels.
Because Duke operates utilities in both states, it was seeking to have similar IRPs in place in North Carolina and South Carolina, with HB 951’s provisions serving as the template.
The SCPSC refused to be guided by a law passed in another state, finding the 70 percent carbon-emissions reduction goal established in North Carolina’s HB 951 in no way binding on South Carolina.
The SCPSC’s decision means Duke can no longer plan on operating similar energy portfolios in the adjacent states. The company has until 2023 to submit its final IRPs to the two states’ respective regulatory authorities.
Plan Protects Ratepayers
Building big wind and solar industrial facilities makes utilities and cost ratepayers big money, says David Wojick, Ph.D., a Virginia-based energy analyst, who serves as a policy advisor to The Heartland Institute, which co-publishes Environment & Climate News.
“The big utilities are hot for renewables because, unlike a normal business, the more money they spend, the more profit they make,” said Wojick. “Expensive, intermittent solar and wind generators are replacing fully depreciated, but still reliable, coal-fired power.
“Plus, if this drives up what the customers have to pay for electricity, the utility makes even more money,” Wojick said. “The utilities are gambling their grids will not become unreliable, which is a bad bet, especially for the ratepayers.”
South Carolina regulators have acted in the best interest of their state’s ratepayers, says Jane Shaw Stroup, a Raleigh, North Carolina-based economist and emeritus senior fellow of the Property and Environment Research Center.
“The situation shows how the push for drastic cutbacks in carbon dioxide emissions has unexpected consequences,” said Shaw Stroup. “In this case, Duke Energy seems eager to go along with North Carolina’s mandate of reducing emissions by 70 percent by 2030, even if it means poor ratepayers in South Carolina face price hikes.
“Luckily, South Carolina’s regulatory commission is more sensitive to costs and may also be skeptical about the effectiveness of wind and solar power, as it should be,” Shaw Stroup said.
Nuclear, Natural Gas Over Renewables
South Carolina’s utility regulators have made the right decision, because one doesn’t need large scale renewables to provide low emission electric power, says Amy Oliver Cooke, CEO the John Locke Foundation.
“It’s appropriate for the South Carolina PSC to do what’s in the best interest of its residents and to reject all utility-scale renewables,” said Oliver Cooke. “The good news is that North Carolina can reduce emissions without unreliable wind and solar, as well.
“Nuclear has long been an energy work horse in North Carolina, and nuclear and natural gas together account for 63 percent of our energy portfolio,” Oliver Cooke said.
Because North Carolina relies so much on nuclear power and increasingly natural gas for its electric power, emissions of pollutants and greenhouse gases have declined significantly since 2000, says Oliver Cooke.
“Because nuclear and natural gas provide the lion’s share of electric power in North Carolina, its greenhouse gas emissions have decreased significantly since 2000, with emissions of carbon dioxide declining by more than 40.4 percent or 54.1 percent per capita,” said Oliver Cooke. “Emissions of traditional air pollutants have declined as well with nitrogen oxides declining 74.2 percent or 81.1 percent per capita and sulfur dioxides decreasing by 92.9 percent or 94.6 percent per capita.
“By continuing the nuclear and natural gas mix, Duke can achieve North Carolina’s emissions goal, while helping provide South Carolina with affordable, abundant, clean, safe power, as well,” Oliver Cooke said.
Bonner R. Cohen, Ph.D., (email@example.com) is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with the Committee for a Constructive Tomorrow.