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Tuesday, July 8, 2014

Solar energy in North Carolina: Gone in a puff of smoke?

Posted By on Tue, Jul 8, 2014 at 11:40 AM

UPDATE: See below for Duke Energy's response to our questions.

It’s the kind of TV ad that pulls you in pretty easily, via a totally camera-friendly spokesman with pearly whites who greets you with a big smile, saying, “Here at Duke Energy, we’re committed to solar power.” But then he turns slightly to the camera, and drops the bomb over his lowered shoulder, saying with a tilted eyebrow, “Committed to keeping it OUT of North Carolina.” Boom! Say what?

It’s the latest commercial from Durham advocacy group NC Warn, a frequent Duke critic, released late last week in advance of a state utilities commission hearing Monday, in which the energy company is attempting to change the way the game is played here, lowering the amount it pays to those who supply it with solar energy. It’s not the kind of move you’d expect of a giant corporation that’s taken the public relations hits Duke’s experienced this year, following the disastrous coal-ash spill into the Dan River in February, and the accompanying criticism of what appeared to have been an inappropriately “cozy” relationship with the governor’s office and the state regulatory agencies charged with checking its behavior. But that’s exactly what’s happening.

So while the commission is studying the request from Duke, here’s what you need to know: According to the Solar Electric Power Association, Duke Energy Progress and Duke Energy Carolinas ranked in the top 10 nationally for new solar capacity installed in 2013 — something you’d assume would be a very good thing, considering the need for clean, carbon-free, energy-independent alternatives to our current system? But Jim Warren, NC Warn’s executive director, told me Monday that that very success is at the heart of the problem.

“What’s happening is that the growth in solar is pretty impressive in North Carolina; it’s so strong that the utilities see it as cutting in to their bottom line too much, not just in this quarter or fiscal year, but for their long-term business plan. Duke makes its money by building plants and selling as much juice as it can, so every new solar farm chips away from its sales, and its arguments that it needs more coal-fired plants, and any other kinds of energy, like nuclear.”

In earlier press releases, Duke talks about the growth in the solar industry in the state, but that begs the point, if, by that “success,” they’re now saying they need to reduce what they pay to those from whom they purchase that power. Why would they need to do that, unless, as NC Warn charges, they’re worried about losing their control of the energy industry here, and want to limit any further solar growth, or, worse, want to put the burgeoning solar industry out of business altogether?

As for the utilities commission, some news reports suggest some members may not be in favor of granting Duke’s request.

After this blog published on Tuesday, Duke Energy spokesman Randy Wheeless called me from Raleigh, where he’s been attending the Utilities Commission hearings that began Monday, regarding Duke’s request that the prices it pays to the producers of solar energy in North Carolina be adjusted. Wheeless rejected the assertions that Duke is “trying to kill solar energy here” by lowering the prices it pays to suppliers, telling me, “North Carolina has a really good story to tell where solar energy is concerned; we’re 4th in the nation for installed solar, and we’re buying that power from the suppliers, and basically only passing those costs through to the consumer, without worrying a lot about things like profit. But, as with all business transactions, we evaluate things from time to time, and if we think we might be able to get lower prices for ourselves and our customers, that’s something we think we should try to do.”

Asked how he would respond to NC Warn’s allegations that this is just a thinly veiled attempt to weaken the still-burgeoning solar industry here by limiting its ability to negotiate contracts from a position of financial strength against a company as powerful as Duke, Wheeless pointed out that “75 percent of the solar projects that are being done in the state come from nine companies, not little mom-and-pop start-ups, which are quite capable of negotiating for themselves, so we don’t buy that argument.”

And when asked to outline just how much Duke is committed to the development of solar energy, Wheeless said, “We’re subject to a state renewable standards law that requires that 12.5 percent of our supplied power come from either renewable or energy-efficient sources by 2021, and we’re going to meet that regulation. In fact, it’s a pretty safe statement that wherever you read or hear about a new solar farm or other project being developed in North Carolina, Duke Energy most likely has a hand in funding it.”

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