Duke Energy’s proposal to the N.C Utilities Commission for how it will meet state-mandated reductions in greenhouse gas emissions has drawn opposition from a company often on the receiving end of criticism from advocacy groups.
Retail giant Walmart, represented by a pair of Winston-Salem lawyers, has joined environmental and climate advocates pushing back on Duke’s carbon plan because, they argue, it would rely too heavily on natural gas during a transition period and not enough on clean alternatives like solar and wind energy.
Duke argues that gas is an effective transition tool because it emits about half as much carbon dioxide — the leading contributor to climate change — as coal, and that the new plants will eventually convert to emissions-free hydrogen.
On Sunday, the Journal reported that Duke’s coal-fired Belews Creek Steam Station in Stokes County is now North Carolina’s biggest emitter of greenhouse gases, according to the U.S. Environmental Protection Agency. It is one of 12 large facilities in the Triad identified by the EPA as major producers of pollution tied to climate change.
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Looking ahead, Duke proposes adding new natural gas facilities with 2,000 megawatts of capacity as a bridge to help replace power production lost as it continues to retire its coal-burning plants. That includes Belews, which is scheduled to shift to 100% natural gas by 2035.
But Walmart is among major electric customers who insist Duke’s preferred path to emissions reduction is a bridge too far.
In comments filed with the utilities commission by Carrie Grundmann and Stephanie Eaton — from the Spilman Thomas and Battle law firm in Winston-Salem — Walmart noted a challenge faced by many companies with ambitious targets for shrinking their carbon footprints: They have little control over how the electricity they buy from utilities is produced.
Duke’s carbon plan aims at meeting the state’s targets — established by bipartisan legislation approved by the General Assembly and signed into law by Gov. Roy Cooper in 2021 — of reducing carbon emissions 70% compared to 2005 levels by 2030 (although just one of the four options presented by the company would meet that deadline). All four alternatives call for Duke to be “carbon-neutral” by the middle of this century.
Bentonville, Arkansas-based Walmart, which operates 10,500 stores in two-dozen countries and has 2.3 million employees, has established goals of powering half of its global operations with renewable sources of energy by 2025 and hitting 100% a decade later.
Therein lies the challenge, Walmart suggests.
“Walmart’s corporate goals are aligned with, but more aggressive than, the goals set forth in (House Bill) 951,” the company explained in written comments to the utilities commission, referencing the 2021 climate legislation. “Even (Duke’s) strict compliance with HB 951 will not allow Walmart to meet its corporate objectives” in its North Carolina operations.
To hit Walmart’s companywide targets for 2035 on a state level, Walmart essentially could not buy electricity from Duke Energy for its hundreds of North Carolina stores and the distribution centers that supply them.
‘Such a paradox’
Walmart isn’t alone in its clean-energy conundrum. Tech giants Apple, Google and Meta (formerly Facebook), which also set aggressive climate-related goals, are among intervenors who have joined Walmart in expressing concerns with Duke’s carbon plan.
“What’s interesting about this battle is these usually powerful players are unmatched against Duke Energy, partly because the North Carolina Utilities Commission has continued to uphold a system that allows Duke Energy to maintain its monopoly and profit without being responsive to its customers,” said Shelby Green, a researcher with the Energy and Policy Institute. “In any other market, that business would not survive. And it’s such a paradox. Walmart has adopted its climate goals partly because of customer demand for action on climate change.”
In states with more ambitious clean-energy targets, those companies can realistically pursue their corporate goals on a localized level, noted David Neal, a senior attorney at the Southern Environmental Law Center who has been involved in utilities commission hearings on Duke’s carbon plan.
“In a state like North Carolina, they don’t have that freedom,” Neal said. “They, like all of us, are captive ratepayers to the incumbent utility (Duke). So it makes sense that they show up at a proceeding like this.”
Attorneys Grundmann and Eaton declined to comment on the company’s interaction with the utilities commission, as did Mariel Messier, Walmart’s senior manager for global responsibility communications.
“At this time, we’re not able to share anything outside of what Walmart’s counsel has filed in the public docket for the proceedings,” Messier wrote in an email to the Journal.
But the company had plenty to say in its utilities commission filing submitted by Grundmann and Eaton, and in questioning of Duke representatives during utility commission hearings on the carbon plan.
In a Sept. 28 session in Raleigh, Grundmann grilled Glen Snider, Duke Energy’s managing director of resource planning and analytics, about where the company planned to find the natural gas it would need to operate the new power plants proposed in its plan.
Grundmann’s questions focused on uncertainty over future natural gas supplies, and price projections used by the company in its cost estimates.
Snider confirmed that the controversial Mountain Valley Pipeline, whose construction remains on hold because of permitting issues, would be Duke’s first choice to boost its natural gas supply.
As Grundmann pushed Snider for details about the company’s proposed strategy related to MVP, he became uncomfortable when the questioning veered into potential deals already struck by Duke.
The attorney noted that MVP has stated publicly that all of the gas it expects to move through the pipeline — from West Virginia’s Marcellus shale fields to Pittsylvania County in Virginia — is already under contract.
“I understand,” Snider said.
Grundmann continued by asking if that meant Duke is one of the companies with a deal in place with MVP. But she didn’t finish the question before Brett Breitschwerdt, a lawyer representing the company, interrupted.
“Oh, I apologize,” Grundmann replied. “I didn’t mean to go into confidential information.”
Snider went on to confirm that Duke’s second preferred option for new gas supplies would be a connection to the existing Transco Pipeline that cuts through North Carolina on its way from Texas to New York City.
Under questioning by Grundmann in another hearing, a Duke representative said it likely would be late in this decade before a distribution system from Transco could be completed if that’s the route the company takes.
Walmart also noted that the volatility of gas prices make any long-term cost estimates by Duke unreliable.
‘Climate law is indifferent’
In its filing, Walmart suggested that Duke encourage more localized clean energy projects funded on the front end by the customers they would serve.
“From Walmart’s perspective, the most effective programs are those that allow the customer to pay the cost, take the risk, and receive the corresponding benefit of the renewable resource,” the company said.
That approach also would shield ratepayers not invested in that resource from related risks and expenses, Walmart noted.
“North Carolina’s climate law is indifferent to whether a resource is a systemwide resource or it is allocated to certain of the Companies’ customers,” Walmart argued, referring to Duke Energy Carolinas and Duke Energy Progress, subsidiaries that both serve North Carolina and South Carolina. “All that matters is that the Companies, on a system-wide basis, achieve HB 951’s carbon reduction goal.”
Walmart has also repeatedly urged the utilities commission to require that Duke explore joining a regional transmission organization, or RTO.
Becoming part of an RTO, which connect utility systems across multiple states, would reduce energy use and make North Carolina’s electric grid more resilient, Walmart suggested in its filing.
A small northeast section of the state, outside Duke’s service area, is part of the PJM Interconnection, which sells electricity in all or parts of 13 states and the District of Columbia.
Until Duke studies potential RTO membership and South Carolina regulators approve the company’s carbon plan, the utility’s emissions blueprint should be used for “modeling purposes only” because the assumptions on which it is based are subject to change, according to Walmart.
The state’s climate legislation already requires the utilities commission to revisit the carbon plan every two years.
Commissioners also should reject Duke’s request to pass the financial hit of proposed small nuclear reactors, offshore wind facilities and hydro-electric storage to ratepayers until it has a firm grasp of the costs, Walmart said.
Finally, the company suggested, the utilities commission should consider how Duke can meet the state’s emissions standards “while also allowing customers to meet their (climate) goals in a cost-effective manner.”
Neal, the Southern Environmental Law Center attorney, said Walmart’s involvement in the carbon plan deliberations adds valuable context to the process and the role utilities like Duke play in the broader economy.
“In these kinds of proceedings, it’s always important to hear customer perspectives, whether that’s membership organizations like some of the groups we represented that have a real commitment to equitably achieving the clean energy goals of House Bill 951, or a company like Walmart or the tech customers,” he concluded.
Under the climate law, the utilities commission has until the end of the year to approve one of Duke’s proposed plans, an alternative offered by intervenors or one of its own.