Energy News Beat

I have always thought of California as a place that is known for its tech savviness, vibrant music scene, the iconic Golden Gate Bridge, and its open values. Incidentally, it’s also the place where many of my American friends reside. Unfortunately, in recent years, the state embraced an ideological extreme becoming the center of the green fanatical and anti-nuclear dogma.

Surprisingly, California appears to be awakening from its dogmatic energy slumber. In 2023, the Democratic government led by Gavin Newsom made two commendable decisions related to a sane energy policy.

The first significant move was the approval of the life extension of the Diablo Canyon Nuclear Power Station. Nuclear power stations, much like coal, require timely life extensions to avoid additional operations costs and early retirements. I suspect that eventually, California’s ratepayers might have to invest more than the OECD average of $555/kw for the life extensions of Diablo Canyon.

There has been some tiptoeing around the costs involved, because of as the seismic underdesign of the power station. Advocates for nuclear power in California should acknowledge that upgrading Diablo Canyon from a peak ground acceleration of 0.4g to 0.70g will inevitably incur expenses (estimated around $1 billion), but in my view the upgrades will be worthwhile to prevent a seismic disaster and to guarantee the affordable operations cost.

California should look towards France for help. In 2008 the French started their Noyau Dur Program that looked into the resilience of the entire nuclear fleet to post Fukushima Tsunami and Earthquake events. The project proposed certain safety upgrades, and it did incur costs, but it is likely to pay off. The lessons learned were incorporated into a new, much simpler EPR2 design, and the French reactors with life extensions are now ready to operate for another 20 years. France has now even exported its lessons learned to other reactors such as South Africa’s Koeberg, and Belgium’s Tihange and Doel 4 power plants.

The U.S. federal government would do well to implement a similar program across the entire nuclear fleet. Working on old designs have enormous benefits as it inevitably selects for engineers that can solve complex problems and think on their feet. But as is usual in America, there will be challenges when it comes to government spending on sensible infrastructure, as it is perceived by many to intervene with “freedom”.

The second move by Newsom that is even more surprising: California finally realized that homeowners were offsetting the full cost of electricity services, consequently bankrupting the utilities. As I anticipated, a few homeowners now find themselves with stranded assets. With the announced job losses, the local PV industry is set to be impacted, but it was predictable, because from an economics perspective, it makes as much sense to compete against the public utility as it does to grow your own food in your garden and compete against the green grocer.

Utility interconnection request data shows that solar sales have fallen between 66% and 83% year-over-year following NEM 3.0.

What’s more, there have been massive layoffs industry wide. CALSSA said over 17,000 solar jobs have been lost in 2023, representing 22% of all solar jobs in the industry.

Based on interviews of residential solar installers across the state, CALSSA found that 59% of installers expect more layoffs ahead, and 63% expect to have cash flow issues over the next three quarters. About 70% expressed concern about their business outlook, while 43%, or about 300 businesses, said it will be difficult to remain in business.

Is this a sign of sanity returning to the sunshine state?

I suspect so, but they aren’t there yet, because a third step towards sanity would be for California to lift the moratorium on nuclear construction. The sunshine state can easily add and afford at least 10 000 MW as baseload capacity, so that the new nuclear plants to replace the reliance on natural gas imports from neighbouring states. Natural gas prices at the moment are low, but LNG is highly elastic and therefore in the case of another oil shock, the Californian ratepayers will be feeling it even harder in their pocket.

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Energy News Beat

 January 3, 2024

Data source: U.S. Energy Information Administration, Gasoline and Diesel Fuel Update
Note: Retail prices are in nominal terms and are not adjusted for inflation.

U.S. retail gasoline prices in 2023 averaged $0.43 per gallon (gal) less than in 2022, according to data from our Gasoline and Diesel Fuel Update. This decline was due, in part, to lower crude oil prices in 2023 compared with 2022 and higher gasoline inventories in the second half of 2023. Compared with the last weekly average price snapshot of 2022, prices during the last week of 2023 were about even, up only $0.02/gal.

The U.S. retail price for regular-grade gasoline, the price consumers pay at the pump, averaged $3.52/gal in 2023. The price hit its 2023 high of $3.88/gal in mid-September, well below the previous year’s high of $5.01/gal in June 2022. Prices decreased to $3.05/gal at the end of 2023.

The lower relative gasoline prices primarily reflect lower crude oil prices in 2023 compared with 2022. Gasoline prices rose quickly after Russia’s full-scale invasion of Ukraine in February 2022 and the resulting uncertainty in markets for crude oil, natural gas, and petroleum products such as gasoline. Annual average gasoline prices in 2022 were the highest since 2014, when adjusted for inflation.

The higher gasoline prices in August and September 2023 were caused by more relative demand for gasoline at the end of the summer driving season, combined with lower refinery production amid seasonal maintenance and low inventories. Gasoline inventories were the same as or lower than those in 2022 for most of the first half of 2023. Prices dropped from $3.80/gal at the start of October, when refinery operations began to resume, to $3.40/gal at the start of November, an 11% decrease ($0.40/gal).

U.S. gasoline prices vary regionally, reflecting local supply and demand conditions and differences in state fuel specifications and taxes. The annual average retail price for regular-grade gasoline in 2023 ranged from a low of $3.09/gal on the U.S. Gulf Coast to a high of $4.51/gal on the West Coast. East Coast gasoline prices averaged $3.40/gal last year. Midwest prices averaged $3.36/gal, the second lowest after the Gulf Coast, and Rocky Mountain prices averaged $3.60/gal. As with overall prices, prices in each region decreased compared with 2022.

Data source: U.S. Energy Information Administration, Gasoline and Diesel Fuel Update
Note: Retail prices are in nominal terms and are not adjusted for inflation.

Principal contributor: Kevin Hack

U.S. retail gasoline prices in 2023 averaged $0.43 per gallon (gal) less than in 2022, according to data from our Gasoline and Diesel Fuel Update. This decline was due, in part, to lower crude oil prices in 2023 compared with 2022 and higher gasoline inventories in the second half of 2023. Compared with the last weekly average price snapshot of 2022, prices during the last week of 2023 were about even, up only $0.02/gal. 

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Afederal appeals court rejected a petition Tuesday to rehear a case related to a natural gas ban proposed by the City of Berkeley, California, which the panel ruled was illegal last year.

The U.S. Court of Appeals for the Ninth Circuit ultimately denied Berkeley’s petition for rehearing en banc — a motion that received support from the Biden administration, Democratic-led states and environmentalists — after it failed to receive majority support from the court’s non-recused active judges. Berkeley filed the motion last year after the court in April that a Berkeley law banning natural gas pipes in new construction violated federal statute.

Following the panel’s filing Tuesday, the Air-Conditioning, Heating, and Refrigeration Institute (AHRI), which had argued Berkeley’s law was illegal, applauded the court for ensuring consumer choice.

“Naturally, AHRI and particularly our member companies that manufacture products and equipment that use natural gas, are very pleased that the full court denied Berkeley’s appeal, thereby allowing the residents of Berkeley, and likely elsewhere, to continue to have choices with respect to energy sources for home and water heating,” AHRI President and CEO Stephen Yurek said in a statement.

“We look forward to continuing to work with states and localities to formulate solutions that help them meet their energy conservation and emission reduction goals without unduly impacting consumer health, safety, comfort, and productivity,” Yurek added.

In July 2019, Berkeley’s city council passed the ban which was set to go into effect in January 2020, making the city the first in the nation to approve such a measure. Berkeley Councilwoman Kate Harrison, who authored the legislation, said at the time that it was part of the city’s effort to take “more drastic action” on climate change and curb greenhouse gas emissions.

However, months after it was approved, the California Restaurant Association (CRA) filed a federal lawsuit challenging the city’s ability to pass a law banning new natural gas hookups. After a lower court ruled in favor of Berkeley in July 2021, the CRA filed an appeal, leading to the Ninth Circuit ruling in April.

The Ninth Circuit concluded that Berkeley’s law violated the federal Energy Policy and Conservation Act (EPCA) of 1975, which prevents local regulations from impacting the energy use of natural gas appliances.

“Instead of directly banning those appliances in new buildings, Berkeley took a more circuitous route to the same result,” Judge Patrick Bumatay wrote in the opinion of the court. “It enacted a building code that prohibits natural gas piping into those buildings, rendering the gas appliances useless.”

“In sum, Berkeley can’t bypass preemption by banning natural gas piping within buildings rather than banning natural gas products themselves,” he continued in the ruling. “EPCA thus preempts the Ordinance’s effect on covered products.”

CRA President and CEO Jot Condie said at the time that Berkeley’s attempt to ban natural gas hookups was “an overreaching measure beyond the scope of any city.”

After Berkeley then filed its petition for rehearing, the Department of Justice (DOJ) in June filed an amicus brief in support of the city’s gas hookup ban.

“The panel opinion in this case upended those settled expectations. It held that a particular municipal ordinance addressing a health and safety concern identified by local elected leaders is preempted by the Act — even though the ordinance does not regulate the energy efficiency, energy use, or water use of a covered product,” the DOJ stated in the brief.

“The ordinance prohibits the installation of certain energy infrastructure in new construction,” it continued. “It thereby affects, indirectly, the circumstances in which some products may be used in some locations. The panel did not explain why this ordinance’s indirect effects warranted preemption or why other health and safety ordinances would not.”

The case has drawn the attention of industry groups that supported CRA — including the American Gas Association and AHRI — and environmental groups and other jurisdictions across the country that supported Berkeley’s ordinance, including the National League of Cities, California, Maryland, New York, Oregon, Washington, D.C., and New York City.

Source: Msn.com

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The world’s largest plant that converts coal into ethanol has begun its test runs at a facility in southeastern China, local media has reported. The technology developed by the Dalian Institute of Chemical Physics (DICP) is the only in the world to have reached the industrial level so far.

The world is looking to phase out fossil fuels in the coming decades in a bid to reduce global emissions. China, which has traditionally relied on coal for its industrial growth, has invested heavily in renewable energy as it looks to meet more than 80 percent of its energy demand from non-fossil fuels by 2060.

Even as the adoption of electric vehicles is on the rise in the country, anhydrous ethanol, which can be blended with petrol, is being used to improve exhaust emissions. For best results, the ethanol has to be 99.5 percent pure and is produced using crops such as corn, cassava, sugar beet, or sugar cane in the US and Brazil.

China’s response to ethanol demand

According to the South China Morning Post (SCMP), China’s annual demand for ethanol is 10 million tonnes. The country was able to produce 2.7 million tonnes of ethanol last year through fermentation of aged grain. However, the significant shortfall from its requirement meant that the country ended up importing the remaining alcohol.

Ethanol is also an important feedstock for various chemical processes since it can be transformed into ethylene, from which other products can be derived. China’s ethanol production demands from corn or sugar cane also compete with the crop grown to feed its large populace. Grain prices have been on the rise in China, forcing it to look for non-crop alternatives to make ethanol.

Coal to ethanol

The DICP has developed DMTE, a process that can generate methanol from coke oven gas, which is then made to react with other materials to generate ethanol. Coke oven gas is a by-product of coke production, which uses low-grade coal as a starting material, something China has in abundance.

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Every few months, the House Committee on Homeland Security has published a new section of a report documenting both the deliberate mismanagement and the incompetence currently sabotaging the nation’s border security and immigration system. The architect of both is Homeland Security Secretary Alejandro Mayorkas.

It is hard to think of a single appointed official in U.S. history who has done more harm to this country’s sovereignty, territorial integrity and rule of law than this one man.

So far, the report comprises four sections, presenting investigative research and analysis—250 pages of concise, compulsive and damning evidence that every voter should read. Only the conclusion remains to be released.

Part One describes Mayorkas’s “dereliction of duty,” calling him the “chief architect of the illegal immigration crisis that Americans have suffered through since January 2021.” Despite his repeated public claims that “the border is closed” or “secure,” everything Mayorkas has done since assuming office has ensured the opposite.

First, he dropped agreements with Mexico and other countries that had effectively deterred fraudulent asylum claims by keeping applicants out of the country while their claims were evaluated. Second, he stopped work on physical barriers at the border that could control and channel illegal entry. Then he took the highly limited parole power in immigration law and abused it to mass-import aliens from favored countries.

A federal lawsuit led by Texas may soon end this gross usurpation of authority, but even that may not slow Mayorkas down. He is already overriding legal restrictions on open borders. Ignoring a legal requirement to detain those entering illegally, pending a decision in their deportation cases, he releases them into the country on unenforceable promises that they will later turn themselves in for due process.

Meanwhile, inside the U.S., Mayorkas’s directives prevent Department of Homeland Security from enforcing immigration laws and decisions. This has produced a massive decline in removals (there were only 72,000 last year, down from 186,000 in 2020) and left almost 6 million aliens wandering free, pending court process. Given the almost insurmountable backlog of immigration cases, all this amounts to a de facto amnesty.

Part Two of the report describes how Mayorkas’s destruction of border security has helped Mexican criminal syndicates make billions in profits, penetrate every U.S. state and control all traffic at our southern border. In his drive to process as many migrants into the U.S. as possible after they have entered illegally, Mayorkas has pulled Border Patrol officers off the line to perform this administrative task.

This has weakened our defenses to the point where cartels can move people and drugs at will. Fentanyl, all of it coming from Mexico, is now the biggest killer of young Americans. In 2022, the DEA alone seized enough of it to kill every American, and the government estimates it only catches 10 percent of the fatal drug.

The report’s Part Three is a heart-breaking look at the human costs of open borders. The millions released on Mayorkas’s watch have not been properly identified or vetted for criminal history, and some are serious risks. American citizens in every state are now subject to rising rates of preventable crime, including murder, sexual violence, drunk driving, and retail theft. More than 400,000 known criminal aliens are in the U.S. In fiscal 2022, barely 10 percent of this number were even arrested, let alone removed.

Moreover, Mayorkas has encouraged the mass-migration of minors by saying he would not deport them. At least 400,000 have entered so far on his watch, at incalculable cost to U.S. taxpayers and at incalculable risk to the health and wellbeing of the migrant children themselves.

Part Four, released Nov. 13, lays out the staggering financial drain on American taxpayers of trying to square unlimited immigration with a welfare state run by debt-laden state and federal governments. Migrants who enter the U.S. illegally consume approximately $150 billion more per year in education, welfare, health care, and other public services than they produce. They are three times more likely to be jailed than legal immigrants or citizens, straining our police, courts, and prisons, as well as hurting the victims themselves. They also cost up to $80 billion a year in public education at a time when school districts are already failing to teach native students to read or do math.

Cities from San Diego to Chicago to New York are out of answers to deal with the never-ending flow from the border facilitated by Mayorkas’s policy choices.

Although the formal conclusion of this report is yet to come, we already know the score. This is a damning indictment of President Biden and the man he personally chose to run the agency in charge of protecting our country’s domestic safety. The four published sections leave no doubt that Mayorkas should have resigned long ago in shame. Instead, he evades responsibility, demands more money to process still more aliens, and blames Congress for problems he himself created.

The report makes a persuasive case that Mayorkas warrants impeachment. He has defied the oath he took to uphold the Constitution, violated immigration laws, endangered Americans and migrants, and lied to both Congress and the American public.

No matter how polarized Congress may be, in light of this report, surely a majority of the House and Senate cannot find what Mayorkas has done to our homeland to be acceptable. The House should vote to impeach him and force senators to go on the record with their judgment as well.

Source: Heritage.org

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OAKLAND — PG&E customers are ringing in 2024 by paying a fresh round of skyrocketing electric and gas monthly bills that are rising far faster than the Bay Area inflation rate.

The increases in monthly PG&E charges officially became effective on New Year’s Day and are slated to begin appearing during the January billing cycles for the utility’s ratepayers.

PG&E monthly bills are expected to average roughly $294.50 a month for the typical residential customer who receives combined electricity and gas services from the utility behemoth, according to estimates provided by the company to this news organization.

That combined bill is 22.3% higher than the average monthly charges that went into effect about a year ago, at the start of January 2023, when combined bills were $240.73 for the typical residential customer.

The increase of 22.3% over the one year for an average combined electric and gas bill greatly exceeds the 2.8% rise in the Bay Area inflation rate as measured by consumer prices during the 12-month period that ended in October.

PG&E claims that its goal is to bring annual increases in combined electricity and gas bills close to the annual inflation rate.

“We’re aggressively focused on finding new ways to work so that we can keep future bill increases at or below a broader, long-term inflation rate of 2% to 4%,” said Carla Peterman, PG&E chief sustainability officer and a company executive vice president. Peterman is a former PUC commissioner who now holds a key executive post at PG&E, which the PUC is supposed to regulate.

At present, however, PG&E appears to have failed to even come close to its stated goal of reining in yearly increases in monthly bills so that annual increases are in the 2% to 4% range.

That’s because PG&E’s combined gas and electric bills are rising about eight times faster than the annualized increase in Bay Area consumer prices.

Oakland-based PG&E believes that higher charges are necessary because of an array of upgrades and improvements to its electricity and gas systems that the utility has launched to potentially reduce the chances that the company’s equipment might unleash disastrous fires or catastrophic explosions.

“PG&E plans substantial investments in its energy system in coming years to pay for permanent wildfire risk reduction, critical gas and electric safety and reliability work, and capacity upgrades to support new business connections and California’s bold clean energy goals,” PG&E stated in a post on the company’s Currents website.

The higher monthly bills arose from the company’s annual “true up” filing with the state Public Utilities Commission. This filing is a regulatory disclosure that sketches out the cumulative effects of decisions by the company’s regulators on PG&E rates and the monthly bills that result from the rate changes.

Regulators, and potentially lawmakers, must act to rein in soaring PG&E bills and take steps to ensure they are in line with the overall inflation rate, in the view of Mark Toney, executive director of The Utility Reform Network, or TURN, a consumer group.

“The current system that sets no limits on rate increases, needs to be replaced by a cap on annual bills, set at the cost of living adjustment provided by Social Security,” TURN, a consumer group, states on its website. Adjustments for the cost of living are typically tied to a benchmark for inflation.

Monthly electricity bills for the typical PG&E electricity customer are expected to average roughly $222 a month. That’s 28.4% higher than the monthly electricity bill of $172.84 in January 2023.

Gas bills are slated to average $72 a month starting in early 2024. That’s 6.1% higher than the average monthly gas bill of $67.89 in January 2023.

“Energy rates reflect the actual costs of continuing to provide safe and reliable service to customers,” PG&E said. “More than 85% of PG&E’s proposed increase targeted risk reductions in gas and electric operations.”

PG&E has launched several endeavors that are being financed by money extracted from customers. PG&E is:

— burying 1,230 miles of powerlines in areas imperiled by high fire risks.

— replacing 139 miles of plastic gas distribution pipelines and 24 miles of steel distribution pipelines for natural gas.

— deploying advanced tools to inspect gas transmission pipelines

— using mobile leak detection technology to spot and repair gas leaks.

Monthly bills are headed for hefty increases, even when comparing them to the bill levels in December. The anticipated average bill of $294.50 a month that starts this month is 13.3% higher than the bills at the end of 2023, according to PG&E.

“The greed of utility executives and Wall Street investors may have no limits, but customers who are falling behind in their bills need a cap to unlimited bill increases,” TURN states on its website.

Source: Msn.com

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The U.S. Treasury Department issued a report Tuesday logging U.S. finances, which have become a source of tension in a politically divided Washington that could possibly see parts of the government shutdown without an annual budget in place.

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(Bloomberg) – Chevron Corp. will book fourth-quarter charges of $3.5 billion to $4 billion, citing assets it sold in the Gulf of Mexico and policies in California prompting the company to slash investments in the state.

Chevron said Tuesday in a filing it will impair some of its U.S. oil and gas production assets, mostly in California, because of “continuing regulatory challenges” there. It comes after the company said in December it was cutting refinery investments in the state because of policies aimed at phasing out fossil fuels.

The San Ramon, California-based company said it plans to continue operating the upstream assets it is impairing for years to come.

The company said it’s taking charges for the Gulf of Mexico assets because the companies that agreed to buy them have since filed for Chapter 11 bankruptcy. Chevron expects it will now be responsible for the assets, which it plans to decommission over the next decade.

Source: Worldoil.com

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Poland’s LNG imports via the Swinoujscie terminal rose almost 6 percent in 2023 compared to the year before, boosted by shipments from the US, according to Orlen.

The Swinoujscie LNG terminal received 62 cargoes or about 4.66 million tonnes of LNG in 2023, Orlen said in a statement.

This compares to 58 LNG carriers or 4.4 million tonnes of LNG in 2022, which marked a record and a rise of 57 percent year-on-year.

The growth of LNG imports in 2022 was possible due to the expansion of Gaz System’s facility in Swinoujscie, where PKN Orlen booked a regasification capacity of 6.2 bcm per year. This is some 1.2 bcm more than before.

Thanks to further investments, the capacity will increase to 8.3 bcm of gas per year in 2024 and Orlen booked all of these volumes as well.

In November 2022, PKN Orlen completed its merger with Poland’s dominant gas firm, PGNiG, which is in charge for all of the LNG supplies coming to the Swinoujscie facility.

The Swinoujscie LNG terminal received its first commercial cargo in June 2016. Prior to that it also received two commissioning LNG cargoes.

Orlen received the 250th cargo at the LNG terminal in September this year, and the 268th cargo on December 28.

The 216,200-cbm Q-Flex LNG carrier, Al Sahla, delivered the last cargo under a long-term contract with QatarEnergy LNG, previously known as Qatargas, Orlen said.

US liquefaction and export terminals remain the biggest suppliers of LNG to Poland.

Orlen has contracts with Cheniere and Venture Global LNG. However, the latter has still not declared commercial operations at its Calcasieu Pass facility.

The Polish firm said that 41 ships arrived in 2023 from the US to Swinoujscie as part of long-term and spot purchases.

Qatar was the second-largest supplier with 19 shipments, while one shipment each arrived from Trinidad and Tobago and Equatorial Guinea.

In 2022, 36 deliveries came from the US, and 18 ships arrived from Qatar.

Besides boosting LNG supplies, Orlen is developing its fleet of chartered LNG carriers.

In October 2023, Norway’s Knutsen and Poland’s Orlen named two newbuild LNG carriers at Hyundai Samho’s yard in Mokpo, South Korea. The carriers in question are Saint Barbara and Ignacy Lukasiewicz.

Prior to that, South Korea’s Hyundai Heavy Industries delivered two LNG carriers to Knutsen that are serving Orlen under charter deals.

The LNG carriers are Lech Kaczynski and Grazyna Gesicka.

According to Orlen, these two LNG carriers delivered 8 LNG cargoes to Poland in 2023 with a total volume of over 0.5 million tonnes.

In the future, Polish LNG imports will continue to rise and Poland is expected to get its second facility and the first FSRU-based terminal in 2028.

In August, Orlen booked 6.1 bcm per year of regasification capacity at Gaz-System’s planned FSRU-based LNG import facility in Gdansk.

Oslo-based BW LNG, a unit of Singapore’s BW, and Japan’s MOL have been shortlisted by Gaz-System to provide Poland’s first FSRU as part of the Gdansk LNG import project.

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​The following commentary was written by Shelley Hudson Robbins, Project Director at the Clean Energy Group. See our commentary guidelines for more information.

The North Carolina Utilities Commission just dropped a riveting order outlining the nightmare scenario that played out in control rooms and meeting rooms one year ago as Duke Energy struggled to keep a stable grid in the midst of Winter Storm Elliott. The December 2022 storm coincided with a collection of unexpected power plant failures, gas pipeline capacity and energy imports that failed to show up, and internal circuit controls that failed. It is hard to imagine a large section of our East Coast power grid going down. But we were close. The heroes of the story are only mentioned in a footnote: the line workers and field personnel who scrambled to their posts on what should have been a holiday weekend with family to figure out workarounds, manually turning circuits off and on to shed enough load to match available supply with a hobbled generation fleet.

The order includes a striking fact: Duke Energy’s fleet of options included almost no demand side resources. During the storm, Duke Energy Progress (DEP) and Duke Energy Carolinas (DEC) only called upon 200 megawatts of demand response each. Compared to the distributed load curtailment resources that are available to neighboring grid operator PJM, which includes 13 states plus the District of Columbia, this seems surprisingly small.

PJM has more than 30 curtailment service providers (CSPs), and over 2 million commercial and residential customers participate as load management resources, with an installed load management capacity of 7,699 megawatts in 2022-2023. Fifty-three percent of these resources were able to respond within 30 minutes. The CSPs actually delivered just shy of 10,000 megawatts of load reduction between 2 and 4pm on December 24. As PJM reported  in its September 2023 Load Management Report, demand response resources “over-performed” during the Winter Storm Elliott event.

PJM’s December 24, 2022 peak load was 136,000 megawatts, according to the grid operator’s report on the Winter Storm Elliott event released last July. PJM, like Duke, was in crisis management mode during the winter storm, but ultimately the grid operator was not forced to shed load.

DEP’s peak load on the morning of December 24 was 14,840 megawatts, and DEC’s peak load at roughly the same time was 21,768 megawatts, for a combined peak load of 36,608 megawatts. DEP was forced to shed 800 megawatts of load by turning circuits off and back on, and DEC was forced to shed 1,000 megawatts. Duke Energy’s combined peak load during Winter Storm Elliott is the equivalent of about 27 percent of PJM’s peak load during the storm. If Duke Energy had a proportionate amount of demand response capacity (PJM had 10,000 megawatts), that would have provided at least 2,700 megawatts of capacity to call upon. But Duke did not have this resource and instead, the utility shed 1,800 megawatts by turning circuits off and then back on, cutting power for hours to customers in North Carolina. Could demand response – if it were in place in DEP and DEC – have prevented the blackouts that endangered vulnerable customers on Christmas Eve? The math says yes.

In its December 22 order, the NCUC did not recommend that Duke Energy develop a more robust demand response program, even though these programs have proven to be cost effective and reliable. In PJM, fossil resources were not reliable during Winter Storm Elliott, but demand response “over-performed.” Instead, the Commission focused on improved load forecasting, avoiding planned outages in December, winterizing the fleet, improving gas-electric interdependencies, and it required Duke to file reports on just about everything except demand response.

Distributed demand response can take many forms, including aggregated behind-the-meter battery storage and aggregated control of heating loads, water heating, and EV charging. Participants in aggregated DR programs are compensated for performance, a feature that can help ease energy burden. Aggregation of these resources has proven valuable to capacity markets in parts of the country that have grid operators making decisions about dispatchable assets rather than monopoly utilities making those decisions. Further, Winter Storm Elliott demonstrated that aggregated demand response resources are reliable during winter peak demand when fossil resources fail for a myriad of reasons. This level of reliability should be reflected in how utilities incentivize these resources.

Duke Energy’s North Carolina utilities are required to achieve carbon reduction goals established by the state legislature in House Bill 951. Clean Energy Group filed its December 2023 report Distributed Energy Storage: The Missing Piece in North Carolina’s Decarbonization Efforts, prepared by Applied Economics Clinic, in the Duke Energy Carbon Plan Integrated Resource Plan comments docket as a way to launch the discussion by providing policymakers and advocates the information they need to harness the full potential of distributed battery storage as a demand response tool. Development of a robust portfolio of demand side resources in North Carolina will be a crucial element of meeting the challenges associated with load growth while simultaneously achieving the goals set forth in the North Carolina Carbon Plan.

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