A bill filed Tuesday in the N.C. House calls for a study into whether changes in how electricity is bought, sold and transmitted in North Carolina could protect the state from widespread power outages like those experienced during a period of record-breaking cold weather last December.
“The Christmas Eve blackouts were an alarming wake-up call for the General Assembly,” said Rep. Larry Strickland, a Republican from Johnston County and co-sponsor of the proposed legislation. “Obviously, our current system is not reliable enough. It’s simply unacceptable in modern North Carolina that cold weather should leave our people, many of them sick or elderly, alone in the frigid dark. That’s not just embarrassing, it seriously threatened people’s lives.”
House Bill 503, named the Storm Resiliency Act, would fund a study led by the North Carolina Policy Collaboratory at UNC Chapel Hill with input from an independent consulting firm with expertise in wholesale electricity markets.
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The study would conclude with recommendations to the General Assembly by the start of its 2025 session.
‘Ask the experts’
Hundreds of thousands of Duke Energy’s North Carolina customers, including in areas of the Triad, lost power for extended periods on Christmas Eve as temperatures plunged into the single digits. While demand soared as customers tried to stay warm in bitter cold conditions, multiple Duke Energy facilities impacted by the extreme weather — including the natural gas-fueled Dan River Station in Rockingham County — failed to generate electricity for extended periods.
Duke also initiated planned, rolling blackouts in an attempt to balance energy supply and demand. There was minimal impact on solar and wind-energy production.
Nearly a half-million Duke customers in North Carolina were without power at 9 a.m. on Dec. 24, according to the website poweroutages.us.
“North Carolina’s residential, industrial and commercial consumers deserve the most reliable power supply possible at the lowest cost,” said another co-sponsor of House Bill 503, Republican Rep. Kyle Hall of Stokes County. “If there are ways we can lower costs while improving reliability for the people of North Carolina, we should take a close look at them. By enacting this bill, we’ll ask the experts and see what they recommend.”
A similar study commissioned by the South Carolina legislature in 2019 found that electric customers in that state could save as much as $362 million per year if recommended reforms are enacted, according to preliminary results released last week.
It’s time for North Carolina to follow suit, one prominent clean-energy advocacy organization suggested Tuesday.
“While our neighbors to the south are ahead of us in investigating potential savings from energy market reform, this bill can help North Carolina catch up and identify how to deliver lower-cost, more dependable power for all residents across the state,” said Cassie Gavin, director of policy at the N.C. Sustainable Energy Association.
Regional approach
Among the potential areas of study in North Carolina proposed in the newly filed bill is the possibility of the state creating or joining an existing regional transmission organization, or RTO.
Duke Energy’s issues related to the December cold snap illustrated the potential advantages of the company being part of an RTO, according to some energy experts.
In the Southeast, most electric grids operate independently over limited areas, Simon Mahan, executive director of the Southern Renewable Energy Association, explained in a January review of the weather-related outages.
For example, Duke Energy Carolinas and Duke Energy Progress serve a combined 4.5 million customers over a 53,000-square-mile area within North Carolina and South Carolina.
However, the northeast corner of North Carolina is part of the PJM Interconnection, an RTO serving all or part of 13 states, including virtually all of Virginia.
While Duke declared an Energy Emergency Alert 3 and conducted rolling blackouts, the chunk of North Carolina covered by PJM suffered limited interruptions.
“If a utility in the Southeast runs into trouble, if they have a power plant that comes offline for whatever reason or can’t get fuel, it makes it more difficult for our utilities in the South to get enough power to run,” Mahan explained. “So they have to import power from their neighbors and sometimes, as we saw (in December), they have to go into these extreme measures of turning off power to their customers.”
At points on Christmas Eve, demand from Duke Energy Carolinas customers, including those in the Triad, exceeded the company’s electricity production by as much 1.5 gigawatts, according to the U.S. Energy Information. The gap reached 2.8 gigawatts for Duke Energy Progress.
Meanwhile, Duke’s Carolinas operations were importing as much as 1 gigawatt of power at a time from PJM.
In fact, Duke’s struggles created a regional energy bottleneck of sorts, Mahan said,
“An entire portion of the United States was being impacted by the low amount of generation and the high demand the Duke customers were causing at the time,” he explained.
‘Shouldn’t lag South Carolina’
The Brattle Group, an international economic consulting firm, estimated in 2019 that energy market reform in North Carolina could save North Carolina utility customers as much as $600 million a year.
Those findings, and those just released in South Carolina, justify moving forward with a fresh look at North Carolina’s energy market, suggested Rep. John Torbett, a Republican and co-sponsor of House Bill 503.
“North Carolina shouldn’t lag South Carolina,” Torbett said. “The South Carolina study showed the considerable savings common-sense market reforms can achieve. We should find out how much we can save for North Carolinians while enhancing reliability.”
