HomeMy WebLinkAboutAgenda - 02-02-2021 Virtual Board Meeting; 8-h - Public Comment Submission to the NC Utilities Commission on Duke Energy's 2020 Integrated Resource Plan 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: February 2, 2021
Action Agenda
Item No. 8-h
SUBJECT: Public Comment Submission to the NC Utilities Commission on Duke Energy's
2020 Integrated Resource Plan
DEPARTMENT: Asset Management Services
ATTACHMENT(S): INFORMATION CONTACT:
Draft NC Local Government Duke IRP Brennan Bouma, (919) 245-2626
Letter
PURPOSE: To:
• Authorize the Chair to sign a letter created in collaboration with several other NC local
governments with recommendations for Duke Energy's 2020 Integrated Resource Plan
(IRP); and
• Direct staff to join with other local governments in submitting a single copy of the letter
signed by all interested local governments to the NC Utilities Commission during the period
for initial public comments.
BACKGROUND: Every two years, Duke Energy submits an Integrated Resource Plan (IRP) to
communicate strategies for delivering reliable electricity at the lowest cost (typically a 10 to 20
year horizon). This is the first IRP that has been published since Duke Energy adopted a goal of
net-zero carbon emissions from electric generation by 2050. This goal aligns with the goals that
Orange County adopted in 2017 to reduce greenhouse gas emissions community-wide by 26%
by 2025 and transition to a 100% renewable energy-based economy by 2050.
Duke Energy's 2020 IRP models potential pathways to accelerate renewable energy deployment,
and to facilitate this deployment reform of state policy is required. This is an opportunity to
advocate for such reform. The North Carolina Utilities Commission (NCUC) hosts statutory IRP
reviews for approval, and is currently accepting public comments. The deadline for initial public
comments is February 26, 2021.
Acknowledging the critical role that utility partners play in the ongoing transition to renewable
energy sources, and the alignment of Duke Energy's climate goals with those of local
governments across the state, Orange County's sustainability staff joined with a group of
sustainability staff from several other local governments to determine how to engage in the IRP
process. This group met weekly to discuss shared interests and recommendations, and to write
and revise the joint letter (attached). This group of staff benefitted from free technical assistance
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from the Rocky Mountain Institute and the World Resources Institute, helping to ensure that the
joint comments letter advocated for policies and practices that are feasible and advance thw
shared renewable energy and climate goals. The Rocky Mountain Institute is a nonprofit that
engages businesses, communities, institutions, and entrepreneurs to accelerate the adoption of
market-based solutions that cost-effectively shift from fossil fuels to efficiency and renewables.
World Resources Institute is a global research organization that spans more than 60 countries,
and aims to turn big ideas into action at the nexus of environment, economic opportunity and
human well-being.
Other NC local governments who were engaged in the process of creating and refining these
comments who are now considering signing this letter include the following:
• Town of Chapel Hill
• Durham County
• City of Durham
• City of Wilmington
• Town of Boone
Other local governments may decide to sign on as well. The group of sustainability staff who
collaborated on drafting this letter understands that the North Carolina Utilities Commission
(NCUC) tends to give greater weight to public comments by representatives of large groups of
utility customers such as local governments, especially when submitted jointly.
FINANCIAL IMPACT: There is no financial impact associated with this item.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable
to this item:
• GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY
The creation and preservation of infrastructure, policies, programs and funding necessary
for residents to provide shelter, food, clothing and medical care for themselves and their
dependents.
Transitioning to renewable energy infrastructure and reducing fossil fuel emissions are directly
linked to economic sustainability. As renewable energy sources continue to decline significantly
in cost, new investments in fossil fuel electrical generation are becoming less affordable. As the
impacts of climate change progress, the full costs to health and quality of life associated with the
burning of fossil fuels in the near future are going to increase. The County's utility providers are
key partners in accelerating this energy transition to preserve the economic self-sufficiency of our
residents.
• GOAL: ESTABLISH SUSTAINABLE AND EQUITABLE LAND-USE AND
ENVIRONMENTAL POLICIES
The fair treatment and meaningful involvement of people of all races, cultures, incomes
and educational levels with respect to the development and enforcement of environmental
laws, regulations, policies, and decisions. Fair treatment means that no group of people
should bear a disproportionate share of the negative environmental consequences
resulting from industrial, governmental and commercial operations or policies.
Engaging in the IRP process is a way to collaborate with the County's utility providers to accelerate
the transition to renewable energy to preserve the economic self-sufficiency of our residents.
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ENVIRONMENTAL IMPACT: The following Orange County Environmental Responsibility Goal
impact is applicable to this item:
• ENERGY EFFICIENCY AND WASTE REDUCTION
Initiate policies and programs that: 1) conserve energy; 2) reduce resource consumption;
3) increase the use of recycled and renewable resources; and 4) minimize waste stream
impacts on the environment.
Showing support for additional climate change mitigation actions by Duke Energy will help
conserve energy, reduce resource consumption, and increase the use of renewable resources.
RECOMMENDATION(S): The Manager recommends that the Board
• Authorize the Chair to sign a letter created in collaboration with several other NC local
governments with recommendations for Duke Energy's 2020 Integrated Resource Plan.
• Direct staff to join with other local governments in submitting a single copy of the letter
signed by all interested local governments to the NC Utilities Commission during the period
for initial public comments.
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February X, 2021 DRAFT
Mrs. Kimberley A Campbell, Chief Clerk
North Carolina Utilities Commission
Dobbs Building, Fifth Floor
430 North Salisbury Street
Raleigh, North Carolina 27602
RE: Duke Energy Progress'and Duke Energy Carolina'jointly submitted 2020 Biennial Integrated Resource
Plan, Docket No. E-100, Sub 165
Dear Chair Mitchell and Commission Members:
The cities of A, B, and C and the counties of X and Y (subsequently referred to as "the undersigned")
respectfully submit the following comments on the Duke Energy Progress and Duke Energy Carolinas 2020
Biennial Integrated Resource Plan (IRP) filed on September 3rd, 2020. These comments were drafted
alongside other North Carolina local governments in addition to those undersigned in this letter, as a
collective effort to advance our governments' renewable energy and greenhouse gas reduction targets.
The undersigned are some of the largest Duke Energy customers and our local governments collectively
serve more than X million North Carolina residents. Combined, our community-wide and government
operations constitute approximately X MWh/year of energy demand. Accelerating a transition to a clean
energy economy is a shared priority for our communities, and the decisions made in this 2020 Biennial
IRP process, including the decisions made regarding generation, transmission, and energy efficiency, will
critically impact our ability to meet the targets below. While our individual renewable energy goals and
GHG reduction goals vary, the undersigned all share a vision of a reliable, affordable, resilient, and
equitable energy system.
Undersigned Local Government Renewable Energy and Greenhouse Gas(GHG) Reduction Targets
• Town of Chapel Hill adopted a resolution in 2019 to create a Climate Action Plan and achieve 80%
clean, renewable energy communitywide by 2030, and 100% by 2050. The Town also has a goal
of reducing communitywide greenhouse gas emissions 26-28% by 2025.
• Orange County adopted goals to reduce greenhouse gas emissions community-wide by 26% by
2025 and transition to a 100% renewable energy-based economy by 2050.
• Durham County and the City of Durham adopted a climate action plan in 2007 with goals to reduce
government GHGs by 50% and the community by 30% by 2030. In addition, the County adopted
a resolution to work towards 80%renewable energy by 2030 and 100%by 2050 in our operations.
• The City of Durham has set a goal to achieve carbon neutrality in municipal buildings and
operations by 2040. The city recently signed a Memorandum of Understanding with Duke Energy
to work together on sustainability issues.
• The City of Wilmington adopted a resolution in 2009 establishing a municipal operations
greenhouse gas reduction goal of 58% by 2050.
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• The Town of Boone adopted a resolution establishing the goals of climate neutrality in municipal
operations by 2030, 100% clean renewable energy used in municipal operations by 2040, and
100%clean renewable energy used in the entire Town of Boone by 2050.
Several elements of the shared vision described above echo Duke Energy and the Commission's
considerations to ensure affordable, adequate, and reliable electric service. Alongside these,the
Commission has the opportunity to consider how the IRP's long-term planning goals can be met while
also aligning with and helping to advance many local government and community-wide goals across
North Carolina. The IRP is also an opportunity for Duke Energy to chart a course for how the utility will
work directly with local governments to (1) prevent disproportionate and adverse health impacts to the
customers already most impacted, and (2) offer energy efficiency and renewable energy programs that
help achieve our shared equity goals.
Duke Energy has been and will continue to be an essential partner for implementing our climate and clean
energy plans and related priorities. To date, the undersigned have established strong partnerships with
Duke Energy through individual and group initiatives and the undersigned appreciate Duke Energy's
efforts to model six unique IRP scenarios with various pathways to a clean energy future.The undersigned
see the 2020 Biennial IRP as another pivotal opportunity to collaborate and achieve more together. We
appreciate that the IRP begins to address our long-term renewable energy goals and GHG emission
reduction goals as Duke Energy aims to meet their goal of net-zero carbon by 2050. Due to the urgency
of climate change and the implications to the wellbeing of all, there are additional actions that should be
considered to affordably and equitably reduce GHG emissions at a faster pace than currently outlined.
Given this,the undersigned ask that the Commission direct Duke Energy to:
1. Retire its coal power plants as soon as possible to improve the health and public
benefits of our communities and use all-source procurement for any replacement
and expansion generation.
Our concerns with keeping coal power plants online any longer than absolutely necessary are due to their
negative impacts on public health, the economy and the climate. Given these concerns, the undersigned
commend Duke Energy's plans for retiring coal units"Allen 1-5" by 2025 in both the"Most Economic"and
"Earliest Practicable"2020 IRP scenarios and are encouraged by Duke Energy's"Earliest Practicable"2020
IRP scenario that has all coal units set to retire by 2030. However, the undersigned have concerns about
plans to primarily replace capacity with natural gas power plants, which are heavy emitters and could
eventually become stranded assets due to the dramatic decline in the cost of renewable energy and
maturation of storage.
All-source procurement can help ensure that Duke Energy's customers are receiving the best solutions
the market can offer and benefiting from increased competition among suppliers that can lead to lower
prices. All-source procurement is a type of request for proposals (RFP) that is technology agnostic,
allowing a full range of potential resources to compete on equal footing, and can create a fair process for
renewable energy, energy efficiency, demand-side management, and storage to play a more critical role
in addressing future energy and capacity needs. Because it typically delivers a suite of technologies and
solutions, all-source procurement can also increase the grid's resilience in the face of unexpected natural
disasters and reduce probabilities of outages.
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A financial tool like rate-payer backed securitization, when made available in North Carolina, can address
the challenge of recovering undepreciated value of the coal plants through the low-cost refinancing of
that value through the issuance of low-risk bonds backed by customers paying their utility bills. The
undersigned strongly encourage Duke Energy to meet the coal retirement dates they have outlined in
the "Earliest Practicable" scenario and replace any needed generation through all-source procurement
with an aim towards a combination of renewables, efficiency, demand response, and storage that can
provide the same services as fossil gas plants at lower costs.
2. Update analysis methods to fully value the contribution of energy efficiency
programs that help local governments and customers address affordability and
climate concerns.
The undersigned are glad to see inclusion of energy efficiency in each of the IRP scenarios. Local
governments work with Duke Energy on energy efficiency programs in our own facilities as well as
promoting them in our communities. Energy burden is defined as the percentage of household income
that goes toward paying electricity and/or natural gas bills. Households that spend 6%or more of their
income on energy bills are considered to have a high energy burden. In 2018, 49% and 42% of
household in DEP and DEC, respectively, had median energy burdens greater than 6%. When just
looking at electricity bills, 31%of households in DEP territory and 26%of households in DEC territory
had median electricity burden at or greater than 6%. Minority groups are disproportionately shouldering
these high energy burdens.Recognizing that efficiency not only reduces emissions but also saves
customers money, we see it as a very important component of meeting our climate and equity goals.
In its IRP, Duke Energy uses an energy efficiency and demand side management Market Potential Study
(MPS) to analyze how much energy efficiency is available as a resource in Duke's service territory. The
MPS uses the 'total resource cost test' (TRC),which includes costs to participants, but not their
attendant benefits, eliminating valuable energy efficiency that could provide value to the system as a
whole. As part of that study,we recommend using the Utility Cost Test (UCT), which the Commission
directed be used as the primary test.The TRC study also relies on historic program participation data
from Duke's current suite of program delivery and marketing methods to determine customer
participation levels.This limits potential by missing critical tools like on-bill financing, which Duke does
not currently offer.
Although the IRP details its income-qualified program offerings and the company describes it
stakeholder engagement approach on the Duke website, it is not clear how or whether historically
disadvantaged communities participated in decisonmaking about those programs,which may have led
to underutilized/misprepresented assumptions about program use. Successful and durable low-income
programs engage these communities so that programs benefit all. Going forward,we encourage Duke
Energy to clearly articulate how it has engaged historically disadvantaged communities in developing
its IRP, and which of their recommendations are incorporated into the plan.
Our local governments encourage the Commission to review Duke Energy's assumptions in the Market
Potential Study and request that Duke Energy submit updated scenarios that use a Utility Cost Test,
use customer adoption models that include the full range of potential methods, including a range of
financing tools. These changes would enable Duke Energy to prioritize energy efficiency as a least cost
resource for the system that delivers health, comfort, and affordability benefits to our communities.
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3. Expand the distributed generation and utility-scale renewable energy solutions
offered to help directly address our local government renewable energy, climate,
and and equity goals
As currently proposed in the IRP, renewable energy plays varying roles across the six IRP scenarios. The
undersigned applaud scenarios C-F where both solar and wind play a more substantial role. The
undersigned also note that depending on the scenario selected, additional renewable energy will be
needed to meet our collective governmental and community-wide renewable energy targets, either
through the basegrid service mix or participation in additional customer programs. Duke Energy's
renewable grid mix of 14% in the Carbon Policy scenario is too low for local governments to reach our
renewable energy targets.Accordingly,the undersigned request the Commission consider our collective
goals when reviewing the proposed scenarios and as needed, request Duke Energy to utilize additional
renewable energy resources or develop subsequent customer programs that allow local governments
to reach stated goals.
Given the significant portion of our communities that are confronted with energy burden as referenced
above,the undersigned believe that it is ever more important to increase renewable energy procurements
and collaborate on removing barriers to LMI programs. We look forward to collaborating with and
supporting Duke Energy in the design and implementation of renewable energy programs such as new
local renewable resources for municipal load and community-wide load, as well as community solar
offerings with an emphasis on low-income customers.
4. Conduct a robust technological and economic analysis of the transmission
investments needed to enable more renewables in future portfolios
A reliable and cost-effective electric grid distribution and transmission infrastructure is critical to enabling
a dramatic increase in renewable energy generation in North Carolina. Conventional power systems
planning and Duke's analysis suggest that significant investments in the transmission system are necessary
to enable higher penetrations of renewable energy.The undersigned local governments encourage a cost-
effective and systematic transmission expansion approach that enables a cleaner electricity system that
includes potential transmission upgrades and has transparent assumptions. There should also be more
consideration of the potential transmission benefits of operating DEC and DEP as a single balancing
authority or the impact of North Carolina's commitment to the SMART-POWER memorandum. Thus the
undersigned recommend that Duke Energy undertake a more comprehensive and robust technological
and economic analysis, including a substantial investigation of potential transmission alternatives, the
repurposing of existing transmission corridors, and the economies of scale gained through large utility-
scale renewable projects or joint balancing area planning.
5. Reassess EV penetration rate and take a proactive approach to growing electrical
load through transportation electrification offerings
Transportation electrification paired with clean energy portfolios will support the undersigned local
governments' decarbonization goals and is in the public interest. Electrification will also provide value to
Duke Energy through new revenue streams for the utility to grow its profits, as noted in the IRP. In the
IRP,the assumed electric vehicle penetration rate is 7.3%by 2035,which might be too conservative,given
major automakers' ambitious EV efforts. The undersigned commend Duke Energy's efforts through the
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Electric Transportation Pilot Program, approved by the Commission in December 2020 and encourage
them to build on that pilot to hasten the adoption of EVs. The undersigned recommend Duke Energy
consider automakers' EV rollouts and Governor Cooper's Executive Order 80 to better forecast EV
penetration, improve utility planning and actively promote EV adoption through incentives and rate
design.
In conclusion,the undersigned local governments have a commitment to the health,economic wellbeing,
and resiliency of our communities. While our specific goals vary, we are all committed to a clean energy
transition. The long-range plans proposed by Duke Energy will have a profound impact on our ability to
meet these goals. Continuing to rely on fossil fuel-based electricity generation runs counter to our goals,
is economically risky, and has adverse health impacts, especially for historically disadvantaged
communities.
In summary,the undersigned request:
• Duke Energy retire coal plants as soon as possible via the "Earliest Practicable" IRP scenario to
improve health and public benefits of NC communities, and to use all-source procurement for
replacement and future generation expansion.
• Duke Energy submit updated scenarios that use a Utility Cost Test and use customer adoption models
that include the full range of potential methods, including a range of financing tools to fully value the
contribution of energy efficiency programs that help local governments and customers address
affordability and climate concerns.
• The Commission consider our collective goals when reviewing the proposed IRP scenarios, and as
needed, request Duke Energy expand the distributed generation and utility-scale renewable energy
solutions offered to help directly address our local government renewable energy, climate, and and
equity goals.
• Duke Energy conduct a robust technological and economic analysis of the transmission investments
needed to enable more renewables in future portfolios.
• Duke Energy reassess EV penetration rate and take a proactive approach to growing electrical load
through transportation electrification offerings.
• Duke Energy clearly articulate how it has engaged historically disadvantaged communities in
developing its IRP, and which of their recommendations are incorporated into the plan.
The undersigned local governments have a history of partnering with Duke Energy on energy programs
that benefit our residents, businesses, and local government operations. We look forward to and are
committed to working with Duke Energy to enable the above solutions that we believe will accelerate a
more affordable, clean, equitable, resilient, and reliable energy system. Through continued partnership,
we can demonstrate to both North Carolinians and the nation what collaborative clean energy leadership
looks like.
Thank you for the opportunity to provide comments.
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