Back
Duke Energy’s plan to zero out its carbon pollution all but ignores a federal loan program that could save ratepayers hundreds of millions of dollars and enable more clean energy, the state’s ratepayer advocate said in recent filings.
And since the loans run out in September 2026, state Public Staff and clean energy advocates say time is running out for Duke to correct course.
“This is a singular bite at the apple that they’re going to get,” said Jeremy Fisher, principal adviser for climate and energy at the Sierra Club. “So, we’re not in a position to sit here and say, ‘hey Duke, in your next [long-term plan], you should model it.’ This is the moment.”
Public Staff called attention to the $250 billion federal Energy Infrastructure Reinvestment Program in its assessment of Duke’s proposed biennial carbon reduction plan, the first of which was approved by state regulators at the end of 2022, months after the surprise passage of the Inflation Reduction Act.
In accepting Duke’s plan that year, regulators noted: “it is appropriate for Duke to incorporate the impacts of the Inflation Reduction Act… and other future legislative changes… into its [Carbon Plan and long-range generation] proposal that it will file with the Commission on or before September 1, 2023.”
But Public Staff and other intervenors say the utility did not fully do so, at least when it comes to the Energy Infrastructure Reinvestment Program.
“The Public Staff has concerns regarding Duke’s failure to model the [loan] program,” wrote Jeff Thomas, an engineer with the agency. The program, he added later, “represents a significant opportunity for cost savings for ratepayers tied to the deployment of new clean energy resources.”
The loans are perhaps less well known than the Inflation Reduction Act’s tax incentives for everything from electric vehicles to solar panels to offshore wind turbines.
But they’re just as important, if not more so, especially in light of the North Carolina law that requires Duke to reduce its carbon emissions in a “least cost” manner.
Fisher said utilities can take advantage of the program to varying degrees, with proportionate savings for ratepayers.
In the “ideal use of this program,” Fisher said, utilities can refinance outstanding loans for their retiring coal plants and combine them with new clean energy investments, all for a low interest rate. Then there’s a “lesser version,” in which a utility doesn’t transfer its balance on old coal plants but does finance new clean energy projects through the federal government. Finally, he said, there’s “one more step down.” That’s where a company like Duke essentially switches to the government debt it would otherwise owe a bank.
In a recent paper, the clean energy think tank Rocky Mountain Institute explained why this last option is least desirable for ratepayers.
“If utilities do nothing more than use [Energy Infrastructure Reinvestment] loans to displace corporate debt,” researchers wrote, “overall ratepayer savings will be minimal, since most utilities can already borrow at reasonably attractive interest rates without the added complication and expense of participating in a government program.”
Yet, Fisher said, testimony from the state-sanctioned customer advocate suggests this “stepped down” version of the loan program is what Duke envisions.
Michelle Boswell, director of Public Staff’s accounting division, relayed an example of a Missouri utility that could maximize the Energy Infrastructure Reinvestment program and save its customers over $900 million. “While these ratepayer benefits come at the expense of lower earnings for the utility,” Boswell noted, “they are consistent with the least-cost mandate contained in [state law].”
At a technical hearing last week before regulators, Thomas reiterated that position. “As the ratepayer advocate, cost is a major concern,” he said. “We believe there are ways to control costs. One proposal is that Duke should take aggressive advantage of the Energy Infrastructure Reinvestment loan program.”
Doing so could save ratepayers more than $400 million through 2032, Thomas said last week, and lead to increased renewable and storage deployment.
Testifying on behalf of Attorney General Josh Stein, expert witness Edward Burgess stressed the loan program could be utilized to cover transmission upgrades needed to connect more solar and storage to the grid.
“Reconductoring of transmission lines could allow for significantly greater renewable resource availability,” Burgess wrote. “This could be done much more cost-effectively with assistance from the Energy Infrastructure Reinvestment program.”
Indeed, advocates say the federal program doesn’t just promise to lower ratepayer costs for the clean energy Duke currently proposes. By changing the economic calculus, the loans could spur the company to invest in more storage and solar and retire its coal plants sooner.
Duke’s proposed 1,360-megawatt gas plant outside Roxboro in Person County is a case in point.
In theory, rather than replace coal smokestacks on Hyco Lake with gas-fired units, Duke could build battery storage and clean energy on the site instead.
That investment would qualify the utility for an additional 10% federal tax incentive, since it would be located within 30 miles of a retiring coal plant. Much of the outstanding debt on the old fossil fuel plant and the solar and battery investments could be leveraged into a low-interest loan through the federal government.
Testifying for several clean energy advocacy groups, expert witness Maria Roumpani said that Duke may not be taking full advantage of this additional 10% incentive, since it assumes that 60% of its new standalone batteries will be sited at retired coal sites.
“Although the approach seems reasonable,” Roumpani wrote, “it might lead to the analysis overlooking certain opportunities to replace coal capacity.”
The Energy Infrastructure Reinvestment Program and the 10% bonus credit for former coal plant communities could also work in concert with so-called securitization of Duke’s coal-fired power plants, in which the remaining book value of plants is paid off through bonds backed by ratepayers.
The same state law requiring Duke to zero out its carbon pollution also calls for only half of the book value of its least efficient coal plants to be securitized. Theoretically, advocates say, the remainder could be paid off through the federal loan program.
Asked about Public Staff’s assertion that the utility didn’t account for the federal loan program in its latest proposal for phasing out carbon, spokesperson Bill Norton said Duke was still reviewing the filing.
He added, “we have already engaged with the Department of Energy and other utilities to learn more about the… program and see if it provides benefits to our customers. We will pursue all federal funding that we believe can reduce energy transition costs for our customers in a manner that protects reliability, supports our coal plant communities and accommodates North Carolina’s growing economy.”
Public Staff and others say time is of the essence. The loan program has a limited amount of funds, and records suggest other utilities have already applied for nearly half the total. That means Duke needs to begin applying for the loans as soon as possible, and, critics argue, should have already started.
“By failing to examine this option,” the attorney general said in its filing, “Duke may be missing out on a once-in-a-decade opportunity to save millions for its customers.”
WIND: The 924 MW Sunrise Wind project receives final approval from federal ocean energy officials to be built off the Long Island coast. (news release)
ALSO:
FOSSIL FUELS:
COURTS: Maine’s attorney general seeks to dismiss a lawsuit from youth and environmental advocates claiming officials have failed to follow the state’s 2019 carbon emissions reduction law. (Maine Morning Star)
SOLAR:
TRANSIT: A number of state lawmakers who oppose the now-indefinitely paused Manhattan traffic congestion tolling program weren’t able to provide an alternative plan for funding New York City’s transit agency. (New York Focus)
FINANCE: Federal energy officials issue $45 million in grants to Washington, D.C., Pennsylvania and Vermont, among other states, to form energy efficiency revolving loan funds to reduce the cost of clean energy projects. (news release)
ELECTRIC VEHICLES: New Haven, Connecticut, will kick off a new short-term e-bike rental program later this summer, although details haven’t been finalized yet. (New Haven Independent)
WORKFORCE: A western Massachusetts community college receives an over $832,000 state grant to boost its programming for electric vehicle charging station installation, energy auditing, solar installation and other green jobs. (Daily Hampshire Gazette)
UTILITIES: An open at-large seat on the Delaware Electric Cooperative’s board attracts five candidates; the election will be held in August. (news release)
WIND: Dominion Energy showcases its use of environmentally friendly bubble curtains and vibrations to set monopiles as it moves forward with construction of a $9.8 billion offshore wind farm near Virginia. (Virginia Mercury)
ELECTRIC VEHICLES:
SOLAR:
UTILITIES: Clean energy advocates tell North Carolina regulators they should push Duke Energy to build more renewables and dial back its plans for new gas plants to meet an anticipated spike in power demand. (WFAE)
OIL & GAS:
PIPELINES:
GRID:
COMMENTARY:
GRID: Grid operator MISO says it could face a capacity shortfall starting next summer in its northern and central regions without swift efforts to add new generation or delay retirements. (Utility Dive)
OHIO: Lt. Gov. Jon Husted allegedly helped lead the charge with now-indicted FirstEnergy executives to pass House Bill 6, which became the subject of a major bribery scheme, text messages show. (WEWS)
SOLAR:
COAL: DTE Energy completes the demolition of a southeastern Michigan coal plant where the utility plans to build a large battery storage facility. (Associated Press)
ELECTRIFICATION: Evanston, Illinois, is among U.S. communities banning gasoline-powered leaf blowers to cut down on noise and pollution, drawing pushback from the landscaping industry. (Associated Press)
CLIMATE: Researchers say climate-driven weather patterns are contributing to temporary price spikes for food and raise the risks of long-term inflation. (Washington Post)
OIL & GAS: North Dakota officials approve a $32 million loan for a processing facility that will convert natural gas into liquid hydrocarbon products. (North Dakota Monitor)
BATTERIES: A struggling Michigan battery startup enters into a strategic partnership with manufacturing giant Foxconn to help scale up production. (Crain’s Detroit, subscription)
BIOGAS: Two companies partner to develop a renewable natural gas facility at an eastern Illinois landfill that backers say will improve local air quality. (WCCU)
EMISSIONS: A large office furniture manufacturer based in western Michigan plans to cut carbon emissions 90% by 2050, which executives say gives it a competitive advantage and helps suppliers meet their own climate targets. (Crain’s Grand Rapids, subscription)
COMMENTARY:
COAL: Coal-fired power plants are becoming increasingly unreliable because of deferred maintenance, increased cycling and other factors, according to the North American Electric Reliability Corp. (Utility Dive)
CLIMATE:
OIL & GAS: In New Mexico, oil and gas giants partnered with environmentalists and politicians to develop an abandoned well cleanup bill, but turned against the final product and claimed it would “destroy” the state. (ProPublica)
ELECTRIFICATION:
SOLAR: A Wyoming economic development official proposes installing solar arrays on reclaimed Powder River Basin mines to replace lost coal tax revenue and jobs but runs into opposition from residents loyal to fossil fuels. (Inside Climate News)
GRID:
EFFICIENCY: Honeywell debuts a plug-level energy monitor that could help offices realize the energy savings of unplugging devices when they’re not being used. (Utility Dive)
WIND:
ELECTRIC VEHICLES: An organization representing gas station chains calls on Florida officials to begin taking applications for funding to build electric vehicle charging stations. (Tampa Bay Times)
POLITICS: Observers expect West Virginia’s longstanding influence on federal energy policy to fade this fall as Sen. Joe Manchin steps down and is likely replaced by a pro-fossil fuel Republican. (Inside Climate News)
Along with new tax breaks for families and businesses in return for investing in clean and more efficient energy, the federal government is for the first time offering support to schools and other nonprofits that make those investments.
“Direct support” payments from the Internal Revenue Service will pay back school districts, churches and other nonprofit organizations for part of what they spend on energy renovations that cut their energy use and replace fossil fuels.
For schools the program represents an opportunity to make energy upgrades that many have had to skimp on, according to Nathan Ugoretz, secretary-treasurer of the Wisconsin Education Association Council.
As state school funding falls behind the rising costs public school districts face, “funding for maintenance and improvements have been put on the chopping block,” Ugoretz said Thursday. School districts across Wisconsin have held referendum votes to raise property taxes to support ongoing expenses.
“This leaves no resources for overhauling outdated electrical systems or investments to cut energy costs,” Ugoretz said.
Ugoretz spoke at Forest Edge Elementary School, a Fitchburg school that has been singled out for its strides in improving energy efficiency. In 2021, the school, after operating for just one year, was recognized as the first Net Zero Energy school in Wisconsin — producing and returning to the power grid as much energy as it used.
The BlueGreen Alliance, an advocacy group that combines the interests of the labor and environmental movements, chose the school Thursday for a presentation on how clean energy and energy efficiency tax credits under the 2022 Inflation Reduction Act are available to more than just taxpayers, whether individuals or businesses.
Direct IRS support that passes those tax credits on to nonprofits will help accelerate the spread of green technology to more users, participants in Thursday’s event said.
“That is a really, really big deal — not only because we get to model for our students what a clean energy economy looks like, but because utility costs for schools are one of the biggest demands on school budgets,” said Kristina Costa, deputy assistant to President Joe Biden for clean energy innovation and implementation. “And when energy costs go up, that leaves fewer resources available for everything else that students need to do.”
Cutting those costs by boosting energy efficiency “frees up those precious dollars to improve our schools and in other ways to enrich our kids’ education,” Costa added.
Spurred by the Inflation Reduction Act, businesses have invested $1.7 billion on clean power projects in Wisconsin through May 2024, according to the White House.
“This is a win, win, win,” said Rep. Mark Pocan (D-Town of Vermont) — for improving education resources, for labor and “more professional job development to have good wages and benefits. Pocan praised the Biden administration for taking “the high road,” adding, “it’s a win for the environment because ultimately we’re addressing climate change through addressing the rising cost of energy.”
Forest Edge school was built well before the Inflation Reduction Act was signed into law, but as Wisconsin’s first net-zero energy school, “it’s an example of what’s possible for schools across the state,” state Carly Eaton, Wisconsin policy manager for BlueGreen Alliance.
From the start the Oregon School District facility was developed to be as energy efficient and clean-energy focused as possible, school district officials said.
A total of 1,704 solar panels line the flat rooftops of the building, providing enough electricity that the district is able to sell some of it back to the power grid, according to Andy Weiland, Oregon School District business manager. Walls of glass maximize natural light in the building, while the panes are specially treated to darken automatically in sunlight to prevent the building interior from heating up.
Geothermal energy, which draws heat from deep below the earth’s surface, and heat pump technology warm the school — and also keep it cool when the weather outside is warm.
“For the most part we don’t have to use any fossil fuels at all,” Weiland said as he gave a tour of the building Thursday.
Had the district been able to use the Inflation Reduction Act’s direct support program when it was building the school, the savings, Weiland speculated, “would have been several million dollars.”
Beyond the savings that the act promises for people and organizations that use its incentives to upgrade their energy systems, the legislation has also been championed for provisions that require contractors to pay employees prevailing local wages on projects that qualify for the full values of tax credits. It also requires projects to employ participants in licensed apprenticeship programs.
The two requirements help stabilize the construction workforce, said Emily Pritzkow, executive director of the Wisconsin Building Trades Council, which represents about 40,000 Wisconsin members in several construction unions.
“By utilizing competitive labor standards, including an area’s standard wages, benefits and training opportunities, we are ensuring the economic impact of these projects stays in our local community for generations to come,” Pritzkow said.
The recent expansion of a groundbreaking transportation law in Minnesota means all major highway projects in the state will soon be scrutinized for their impact on climate emissions.
A year ago, the state legislature made headlines with a new law requiring the state transportation department and the Twin Cities’ regional planning agency to begin assessing whether highway expansion projects are consistent with state climate goals, including Minnesota’s aim for 20% reduction in driving by 2050.
A follow-up bill passed this spring expands the 2023 law to include all major highway projects statewide that exceed a $15 million budget in the Twin Cities or $5 million outside the metro, regardless of whether or not they would add new driving lanes. The updated legislation also established a technical advisory committee and a state fund to recommend and help pay for mitigation projects.
“It allows for some evolution of the law,” said Sam Rockwell, executive director of Move Minnesota, a nonprofit advocacy group that supported the legislation. “There’s more flexibility.”
The law requires transportation project planners to offset projected increases in greenhouse gas emissions and vehicle miles traveled to qualify for state or federal highway dollars. Those mitigation efforts might include incorporating funding for transit, bicycle or pedestrian programs or environmental restoration projects.
Altogether, the law will now cover more than 12,000 miles of state trunk highways that account for more than 60% of all miles driven in the state. One high-profile project that may not have been covered under the initial law is the upcoming reconstruction of Interstate 94 between Minneapolis and St. Paul, which will now need to account for climate impacts.
The changes come as advocates and officials seek solutions to reverse the continued growth of transportation emissions, which surpassed electricity generation almost a decade ago as the state’s largest source of greenhouse gas emissions and are a major reason why Minnesota is not on track to meet its climate goals.
A disconnect has long existed between even progressive states’ climate goals and the status quo of highway construction, which has long focused on maximizing efficiency for drivers. The new Minnesota law is an attempt to integrate climate action into state and local transportation planning, and to recognize that electric vehicles alone won’t be enough to achieve climate targets.
Under the law, the Twin Cities’ regional planning agency, the Metropolitan Council, must include strategies for reducing greenhouse gas emissions and vehicle miles driven in its next 25-year regional plan in 2026. All metro area communities will then use that plan as the basis for their local comprehensive plans, which are due to the regional council in 2028.
“It’s a waterfall effect here,” Rockwell said.
The Met Council’s last planning document, Thrive 2040, already outlined a focus on multimodal travel options, encouraging walking and biking options while setting a goal of decreasing vehicle miles traveled per capita by 20% by 2050, in line with the state’s official goal.
Many metro area communities are already having conversations about how to reduce dependency on driving. Abby Finis, a consultant who has helped several communities draft climate action plans, said reducing driving can bring broader benefits than simply focusing on electric vehicles.
“It offers more active lifestyles, more opportunities to incorporate nature, and has less impact on natural resources needed for electric vehicles,” she said.
Most communities focus on increasing the ability of residents to walk and bicycle for short trips by adding bike lanes, pedestrian islands and safer crosswalks, she said. Some cities see telecommuting and co-working spaces as options for reducing commutes.
But transforming the suburbs will be challenging, Finis said. Sustaining transit service often requires denser development, which continues to be politically controversial in many communities.
“I have yet to see any community push hard on those strategies in a way that meets what is necessary to reduce [vehicle miles traveled] and adapt to climate change,” Finis said.
For example, Minnetonka, a western suburb of Minneapolis with more than 52,000 residents, boasts a considerable bicycling community. But transit ridership is low except for a modest ridership at the regional mall, one commercial development area, and park-and-ride lots, said Minnetonka’s Community Development Director Julie Wischnack.
Developed in the 1950s and 1960s, Minnetonka’s current land use is a barrier to fixed route transit. But the city is among a collection of suburbs along Interstate 494 that has been pushing for transit and other commuting options, including telework.
Another member of that commission, Bloomington, faces many of the same challenges. The city has a few dense neighborhoods near transit stops and the Mall of America, but much of the community remains single-family homes and small apartments. A recent report Bloomington commissioned on transportation found that 75% of trips by residents were more than 10 miles.
Transit, biking, and other modes could replace trips that are less than 10 miles, said Bloomington Sustainability Coordinator Emma Struss. A recent city transportation study suggested several strategies to decrease driving, including transit-oriented development, free bus and rail passes, bike parking, subsidized e-bikes and more transit. Removing barriers to walking and biking were highlighted.
“We’re hearing more and more from residents that they want safe ways to get around the community without needing to take a car,” Struss said.
St. Paul has made changes to create denser neighborhoods, including removing parking minimums for new development and letting up-to-four-unit complexes be built in single-family neighborhoods. The biggest challenge continues to be the spread-out nature of the region, which forces people to drive to suburban jobs and big-box merchants.
“The fundamental nature of those trips is hard to serve with anything but driving in the car,” said Russ Stark, St. Paul’s chief resilience officer.
Minneapolis has focused less on vehicle miles and more on “mode shift,” or decreasing trips, said the city’s Public Works Director Tim Sexton. The goal is to replace three of five trips by car with walking, biking, or other modes. A city transportation action plan features more than 100 strategies, including creating around 60 mobility hubs where residents can rent e-bikes, scooters or electric vehicles, or take transit.
Patrick Hanlon, the city’s deputy commissioner of sustainability, healthy homes and the environment, pointed out that Minneapolis has one of the country’s best-developed bike networks, which continues to grow. The city’s comprehensive plan drew national attention for removing barriers preventing denser development, which typically leads to fewer transportation emissions. Several transportation corridors now feature bus rapid transit lines.
What Finis described as a “patchwork” of conversations around developments like these are expected to become more comprehensive as the state law’s planning requirements take effect in the coming years.
The legislation has also made Minnesota a national inspiration for other states looking to make progressive changes to highway planning, Rockwell said.
“We know of a number of other states that are looking at trying to replicate parts of this (law), which is great,” he said. “We’ve been on the phone with folks from New York, Michigan, Illinois and Maryland who are trying to bring some pieces of this into their legislative sessions and their legal framework. That’s exciting.”
GRID: Large tech companies are betting on atomic fusion and other unproven energy technologies to power AI data centers, which critics say are already increasing reliance on fossil fuels. (Washington Post)
ALSO:
OIL & GAS:
RENEWABLES: University of Wisconsin researchers map millions of acres of abandoned U.S. farmland that could potentially be reused for renewable energy projects. (Journal Sentinel)
SOLAR: Korean solar company Qcells expands its deal with a developer to provide 2 GW of modules from its Georgia factory for community solar projects by 2027, in what the company says is the largest community solar partnership in U.S. history. (Korea Herald, news release)
HYDROGEN: The oil and gas industry’s lawsuit against the U.S. EPA questioning the process of developing clean hydrogen as a fuel for long-haul trucks grinds against efforts by Exxon Mobil and Chevron to champion the new technology. (Houston Chronicle)
ELECTRIFICATION: A study finds California utilities could save about $20 billion over the next two decades by electrifying clusters of buildings instead of replacing their aging natural gas pipelines. (Utility Dive)
CLIMATE:
COAL: A federal watchdog’s report finds an agency’s process for distributing funding to states and tribes to clean up old coal mines is plagued by problems that have resulted in delays, poor tracking and confusion. (E&E News)
SOLAR: Korean solar company Qcells expands its deal with a developer to provide 2 GW of modules from its Georgia factory for community solar projects by 2027 — the largest community solar partnership in U.S. history. (Korea Herald, news release)
ALSO:
OIL & GAS:
WIND: Dominion Energy begins installing turbine foundations as it continues building its 176-turbine offshore wind farm near Virginia. (WHRO)
RENEWABLES: A California firm agrees to purchase stakes in a 250 MW solar farm, a 226 MW wind farm and a 350 MW wind farm, all located in Texas. (Renewables Now)
HYDROGEN: The oil and gas industry’s lawsuit against the U.S. EPA questioning the process of developing clean hydrogen as a fuel for long-haul trucks grinds against efforts by Exxon Mobil and Chevron to champion the new technology. (Houston Chronicle)
COAL: A federal watchdog releases a report finding an agency’s process for distributing funding to states and tribes to clean up old coal mines is plagued by problems that have resulted in delays, poor tracking and confusion over the process. (E&E News)
NUCLEAR: West Virginia U.S. Sen. Shelley Moore Capito calls on state officials to ensure they’ve prepared sites for the construction of small modular nuclear reactors after her legislation heads to President Biden for his signature. (WV News)
BUILDINGS: A North Carolina developer constructs 11 new homes built to federal Zero Energy Ready Home standards that are priced for first-time homebuyers. (WSOC)
ELECTRIC VEHICLES: A Texas school district will purchase 15 electric buses with $6.1 million in federal funding. (KXAS)
GRID:
CLIMATE:
COMMENTARY: Louisiana should engage communities around ports and leverage federal funding to reduce toxic emissions, environmental injustice and the potential for lawsuits, writes an activist. (The Advocate)
CLIMATE: Hawaii recognizes children’s constitutional right to a life-sustaining climate and steps up efforts to reach a goal of net-negative emissions by 2045 to settle a youths’ lawsuit targeting the state’s fossil fuel-friendly policies. (Associated Press)
HYDROPOWER: A rural Alaska community prepares to use federal funding to construct a run-of-the-river hydropower project aimed at reducing the village’s reliance on diesel generators. (KTOO)
ELECTRIFICATION: A study finds California utilities could save about $20 billion over the next two decades by electrifying clusters of buildings instead of replacing their aging natural gas pipelines. (Utility Dive)
STORAGE:
UTILITIES:
ELECTRIC VEHICLES:
OIL & GAS:
PUBLIC LANDS: A federal Bureau of Land Management plan to expand protections on some public lands in western Colorado while leaving 855,300 acres open to oil and gas leasing draws mixed reviews from advocates. (news release)
GRID: California’s grid operator begins shifting governance of its extended day-ahead power market to an independent entity. (RTO Insider, subscription)
BIOFUELS: Nevada researchers find prickly pear cactus fruit are a climate-resilient source of biomass for fuel production. (news release)
COAL: A Wyoming explosives maker says declining Powder River Basin coal production has driven down its sales by 19% this year. (Cowboy State Daily)
COMMENTARY: A California editorial board calls on state lawmakers to require cooling equipment in residential rental units to keep occupants safe during increasingly frequent climate change-exacerbated heat events. (Los Angeles Times)
.svg)
