The following is a contributed article by Stan Wise, former President of the National Association of Regulatory Utility Commissioners and a former Commissioner on the Georgia Public Service Commission.
A stronger energy grid, electric vehicle infrastructure and renewable energy are on the line in North Carolina because leaders are changing the rules on Duke Energy's handling of coal ash.
As a former Georgia Public Service Commissioner and former president of the National Association of Regulatory Utility Commissioners (NARUC), this issue matters to me — and it matters even more to the nation, its utilities, and the millions of customers who rely on utilities for affordable and safe electricity.
Through a collaborative effort with environmental regulators and community advocates, Duke Energy is now undertaking the largest coal ash excavation effort in U.S. history. The ramifications of the decision made in North Carolina will resonate across the country and affect local individuals from the nearly 16,000 Duke Energy employees to households and businesses across the state.
Let's not understate the situation — what is happening in North Carolina is a major shift in the way the utility industry has been regulated and overseen for the last several decades.
Utilities have operated coal ash basins for many years according to the standards of the industry and as set out by law. In the past, the North Carolina Utilities Commission (NCUC) has ruled coal ash management costs as a necessary cost of providing reliable electricity.
The "cost of doing business" is something that all industries must wrestle with, and in the case of the utility industry, the cost of providing reliable and affordable electricity to millions of customers for decades included the creation of coal ash.
Levying an outsized penalty on the state's utility by reversing decades of state and national precedent is a major departure from the existing regulatory framework and will undoubtedly have unintended and wide-ranging consequences for customers in the state.
From lowering Duke Energy's credit rating and driving up the cost of critical infrastructure, to deterring businesses looking to grow or relocate to North Carolina due to the uncertain regulatory environment, forcing Duke Energy to pay could amount to a cost even higher than the original multi-billion dollar estimate.
If Duke Energy is saddled with the $10 billion obligation, it is not just the company who suffers — it's the company's customers, partners, employees and everyone they touch. As a former industry regulator, it's those individuals that I was charged with protecting. Utilities commissioners are tasked with guarding the viability of regulated public utilities, while also protecting the interests of consumers.
Also, in keeping with the desires of the state leaders and citizens, Duke Energy has articulated ambitious plans aimed at advancing North Carolina's clean energy goals and modernizing the state's electricity grid. Fulfilling that vision will take a lot of investment, which can be difficult to secure when regulatory precedent is questioned.
These goals could be placed in peril if Duke Energy is required to pay for the clean-up.
The changing opinion surrounding coal ash is a relatively recent development, and the retroactive application of modern sentiment is not a positive way to move forward towards the energy future we all want. Given the critical moment the utility and energy industries are currently in, now is not the time for short-sighted and zero-sum thinking — it's the time for resolve in the face of change and consistent, forward progress.