Thread by @ThadCulley

Alright, a little H.951 thread, by unpopular demand.

Carbon goal? Carbon mandate? Well, 951 requires the Commission to "take all reasonable steps to achieve a 70% reduction...from electric generating facilities owned or operated by electric public utilities [by 2030]."

So we are reducing Duke fleet emissions by 70% by 2030, not the electric sector in NC. What prevents Duke from selling its fossil fleet and entering long-term PPAs with the new owners? Is Duke still operating these plants for purposes of the law? I don't believe this will happen.

But... it's worth a thought, no? Like any utility, Duke has incentive to own and operate their generation fleet, but who is to say, at some point, it might make sense to simply offload some rarely used fossil plants and enter contracts with them as a reliability backstop.

While I don't think that sort of gaming is likely, it doesn't seem like it would be completely impossible to remove carbon emissions from the fleet without reducing carbon emissions in the state. But this isn't my biggest question.

My biggest question is: who pays for failure? There are no penalties for the utility in the law. The Commission is told to "take all reasonable steps," so long as those steps "comply with current law and practice with respect to least cost planning for generation." This is...

...a lot of discretion on the part of regulators to justify non-compliance. And there is the rub: where is the discretion in the law to enforce compliance with any carbon plan? The Commission has to rely on its inherent authority to supervise utilities if it fashions penalties...

It seems likely that the forthcoming PBR docket is the place to explore the extent of the Commission's discretion to reward/penalize as it relates to meeting the carbon plan. BTW, comments/intervention are due in 3 weeks. Folks, this might be the whole ball game.

But any penalty and any reward through a PIMs are bound by the carbon plan adherence to least cost planning. SO, the phrase "least cost planning" is going to be doing A LOT of lifting in how this law pans out. Also, "current law and practice?!?"

By 12/31/22, the Commission shall develop a plan. So this won't be a utility application or even an IRP-like filing. This is supposed to be a comprehensive road map that the Commission develops by that date "with the electric public utilities" "including stakeholder input."

Achieving the authorized goals can consider, "generation, transmission and distribution, grid modernization, storage, energy efficiency measures, demand-side management, and the latest technological breakthroughs..." SO, here is where I am an optimist...

The law makes it explicit that carbon should be considered across the full spectrum of utility programs and practices. This is new. This is fucking important. Traditional measures must be considered against non-traditional measures that provide superior carbon reduction.

Energy efficiency and demand-side measures, including behind-the-meter solar and solar+storage, are load reduction measures that can achieve multiple objectives in the PIMs context. EE/DSM incentives are excluded from the 1% of revenue requirement limit on PIM penalty/reward.

Customer programs--and I believe Duke is earnest in their desire to leverage better rate design and customer programs to improve the system--can and should play an outsized role in meeting the carbon reductions.

But how do we reconcile electrification and expansion of EV load with 951 carbon requirements? Duke won't get credit for reducing carbon by fuel switching to heat pumps or EVs. This will make compliance even more challenging by having even more load that needs to be met.

For my buck, this means we should be meeting new load (EVs/heat pumps) with onsite clean energy that has always been treated as a decrement to load in IRPs. So, while I said I wasn't crazy about 951, I have to caveat that there is still opportunity for DERs to save the day.

I know an awful lot of people on all sides of the spectrum of the 951 debate and I am not attacking any of them here. I am simply trying to sound the alarm that this law won't do anything you like unless you get involved and fight like hell for your interests at the Commission.

There are a ton of aspects to H.951 I didn't touch here. I have really been wrestling with whether we should be celebrating this or panning it. I think we leave the celebration for later. Like all things in life, nothing is guaranteed. Advocates have to make this reality.