Distributed Energy Resources

Utility agrees to trim grid modernization plan

Duke Energy Carolinas has agreed to scale back a $7.8 billion proposed grid modernization to $2.5 billion as part of a rate case settlement agreement.

The NC Sustainable Energy Association, one of the parties to the June 1 agreement, said the new four-year plan is more focused on “true” grid modernization, noting that Duke’s initial 10-year Power/Forward proposal included tree trimming and burying lines underground.

The agreement is connected to Duke’s proposal to raise its rates by 13.6 percent, or about $647 million, filed with the North Carolina Utilities Commission in August. The NCUC is reviewing the rate request.

Projects covered by the agreement with the Environmental Defense Fund, Sierra Club and NCSEA include deploying at least 200 megawatts of energy storage by May 2023 and another 100 MW by May 2026 as “non-wire” solutions that could reduce spending on power lines.

Duke will also be able to spend up to $50 million on five “targeted” underground projects, according to the agreement.

Duke will also spend at least $25 million investment in electric vehicle charging stations by 2021.

Duke will also give its customers and possibly authorized third parties increased information about their power usage via a web-based platform by May.

The utility also agreed to adopt “integrated distribution planning” on its system by 2022. The planning takes into consideration Duke’s generation, transmission and distribution system needs, according to the settlement agreement.

Under the agreement, Duke plans to add integrated volt/VAR control systems, used to improve energy efficiency, on 20 percent of Duke’s circuit lines by 2022.

If the NCUC approves the agreement, Duke Energy Progress will deploy 175 MW of energy storage on its system by 2026 and spend $17 million on an electric vehicle charging project under a separate pact reached with EDF and the other parties.

Duke will be able to recover its Power/Forward costs through a three-year grid rider. Elements of the Power/Forward plan not covered under the agreement — undergrounding power lines, besides the so-called targeted projects, cable and conduit replacement, and power pole replacement — will be taken up in a future rate case. When the rider expires, Duke can seek permission to extend it.

Separately, Duke struck an agreement with several large customers including Food Lion, Ingles Markets, JC Penney, Sam’s East and Wal-Mart Stores East. The companies said they supported the EV charging and battery storage projects and the plans to improve customer access to their electric usage data.

The North Carolina Justice Center, North Carolina Housing Coalition, Natural Resources Defense Council and Southern Alliance for Clean Energy oppose the agreement, partly because they say it violates a prohibition on single-issue ratemaking under North Carolina law, according to a filing with the NCUC.

The agreement will drive up residential rates by 6.1 percent, which is especially burdensome on low-income customers, according to the groups. “Although the settlement includes positive commitments from [Duke] to deploy clean energy resources and engage in integrated system planning, those are actions that [Duke] should be taking anyway to meet its obligation to serve at least cost,” the groups said.