Duke Energy: This is Not Leadership

Stephen Smith | February 11, 2014 | Coal, Energy Efficiency, Energy Policy, Nuclear, Solar, Utilities

Shorter versions of this oped were originally published in North Carolina in the Charlotte Observer on February 10, 2014 (found here) and in Florida in the Tampa Bay Times on February 11, 2014 (found here).

When Duke Energy merged with Progress Energy to form the largest utility company in the United States, our organization wondered what kind of leadership to expect from the new corporate giant. After 18 months, we are gaining insight into how Duke Energy defines leadership. Unfortunately, the trends to date in the four areas outlined below do not bode well for the new corporate leadership.

The third largest spill from a coal ash pond in U.S. history occurred last week at Duke’s Dan River plant near Eden, NC. Duke officials struggled for nearly a week to contain the leak, which has sent toxic coal ash into the Dan River, threatening public drinking sources downstream. Several days into the spill, Duke Energy spokeswoman Lisa Hoffman said the company is looking for “alternatives” to their current coal ash management policies. However, Duke has a record of aggressively lobbying against Environmental Protection Agency rulesthat would tighten coal ash management which, if enacted, would have prevented the type of disaster we are seeing unfold in real time. In the aftermath of a major disaster, claiming that you will consider implementing recommendations you have lobbied against in the past is not leadership.

Over the past few months it is becoming increasingly apparent that Duke will attempt to aggressively roll back policies that support solar power development in its service territory. Duke CEO Lynn Good and other Duke Energy executives are now engaged in a broad campaign to mislead the public about the ‘cost’ of net metering. Net metering allows customers who place solar power on their homes to use the power they generate to offset their electric bill. Ms. Good and other Duke executives have characterized homeowners with solar power as taking advantage of low-income customers and not ‘paying their fair share.’ This inflammatory and misleading information is particularly dubious given the fact that our organization and others have requested that Duke conduct an open and transparent Value of Solar analysis that would calculate the cost and benefits of customer-owned solar power to the grid. Every time there has been such an analysis conducted in a transparent manner, it has demonstrated that net metering is not only fair, but often underestimates the true value that solar systems provide to the grid. Duke Energy’s hidden agenda in attacking solar net-metering policy is the simple fact that customer-owned solar generation challenges their central utility business model. Just as telecommunication companies had to adjust to cellular phone technology or how digital cameras changed the way we take photographs, Duke should embrace the technological advancement that allows customer-owned solar power rather than feebly attempt to cling to a crumbling business model. This is not leadership.

Before the merger, Duke Energy appeared to want to move into a national leadership position on energy efficiency. In cooperation with stakeholders, including ourselves, Duke’s modified Save-a-Watt energy efficiency program looked to be an innovative way of helping customers save money while capturing real energy efficiency savings across their service territory. A number of utilities have achieved greater than 1% demand reductions on an annual basis, which over a ten year period would lead to a 10% reduction in demand. As part of the merger settlement, Duke Energy promised to move in that direction. More than a year after that commitment was made, Duke continues to reinterpret the agreement and projects savings significantly lower than the 1 % annual goal by 2022. Duke’s energy efficiency plan is less than half of what leadership utilities in other states are doing over the same period. The story is even worse in Florida, where Duke is not expected to advance even the modest goals or program designs they have adopted in the Carolinas. This is not leadership.

Shortly after the merger with Progress, Duke announced it would shut down the crippled Crystal River 3 nuclear reactor in Florida. Progress Energy had structurally damaged the reactor’s containment vessel while replacing a steam generator during a botched repair procedure. We agreed with the decision to shut the reactor down, given the significant risk associated with operating a cracked containment vessel into the future. Following the decision to stop throwing good money after bad, it has been breathtaking to watch Duke gouge Florida customers due to the Crystal River 3 mismanagement. Essentially, the company put ratepayers on the hook for more than one billion dollars, sparing its shareholders any significant financial responsibility. Under a more robust regulatory environment, Duke would not have been able to get away with this cost shift from shareholders to ratepayers and has clearly taken advantage of Florida’s weak regulatory oversight at the expense of customers. Duke customers should not be shouldering a disproportionate share of the costs from this mismanagement. This is not leadership.

I would simply ask Lynn Good and other senior Duke Energy executives, is this the leadership we should continue to expect from the largest utility in the country? If you agree with me that we should expect more leadership from our nation’s largest utility company, click here to send a message to Duke Energy’s CEO, Lynn Good.

Stephen Smith
Dr. Stephen A. Smith has over 35 years of experience affecting positive change for the environment. Since 1993, Dr. Smith has led the Southern Alliance for Clean Energy (SACE) as…
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