Who decides how our electricity is generated?

Who decides how our electricity is generated? It’s not the people who use and pay for that electricity, which is what you might expect in a democracy. Under the current system, it’s the shareholders of Duke Energy, North Carolina’s legalized energy monopoly, who decide where our electricity comes from.

Shareholders, in general, are interested in increasing their share of the profit. They invest money in a company such as Duke Energy so they can get a return on that capital investment. Investing in a state-protected monopoly is different than investing in a private company, the law requires that these companies cannot profit from the sale of electricity, their main product, they must provide that with no markup to customers.

So how do Duke’s shareholders make a profit? They invest in the building of infrastructure to support the production and distribution of electricity, powerlines, substations, pipelines, compressor stations, power plants and so on. They get a safe and predictable rate of return on those investments if the Utilities Commission approves it. So, to act in the best interests of their shareholders Duke must build more infrastructure.

There was a time in our history where building more electricity infrastructure was in line with the public interest to ensure that everyone has access to electricity. This was why state-regulated utilities companies were initially created – to get electricity to everyone. The industry was driven by customers’ desire for reliable and low cost electricity and the state-regulated utilities were acting in alignment with the wishes of the people.

The wishes of the people have changed. The dawning recognition over the past 4 decades that climate change is real has changed our values – reliable service at a low cost is no longer the primary concern. Our atmosphere and oceans are warming, this is changing weather patterns impacting how we grow food, which areas of the planet we can survive in and threatening the survival of humans and many other species on earth. Scientists predict that as temperatures continue to rise, so will sea levels flooding coastal areas across the globe, superstorms will be spawned in the Atlantic, thousands of acres of forests will burn, many regions will become too arid to grow food and great swaths of land too hot and humid for human beings and most other mammals to survive. People want to know that the electricity they use is not contributing to the destruction of our ecosystem.

Duke Energy is currently the largest single producer of Carbon Dioxide in the US, they are responsible for 2% of national emissions. The US is the second largest producer of CO2 in the world after China. Duke Energy plans to retire their coal-powered plants and replace them with plants fired by natural gas – another fossil fuel. Natural gas is 90% methane, which when released into the air is 80-100 times more potent a Greenhouse Gas than Carbon Dioxide. Research by Dr. Howarth at Cornell shows that between 6 and 12% of gas is released directly into the atmosphere between extraction and burning at the plant. Switching from coal to gas will increase the rate of global warning, not slow it. Over the next nine years (2016) Duke Energy plan to increase the amount of electricity they generate from fossil fuels from 62% to 63%, reduce nuclear from 34% to 28% and increase renewables from 4% to 9%. [1]

On June 1 2017 Duke Energy filed a request with the NC Utilities Commission to increase electricity rates by about 16%. They plan to use the bulk of the initial revenue from that rate hike, $416 million to build gas-fired plants across the Carolinas, including right here in Arden.

Duke Energy’s plan is no longer in alignment with the wishes of the people, so who decides?

Currently, we the people, have no say in this matter. We have no legal avenue to say “No” to Duke’s proposed plan. There is no way for us to vote on how we want our electricity to be generated and we cannot vote with our wallets by choosing another electricity provider. We can submit our comments to the NC Utilities Commission online or at one of their Public Hearings and hope that they will be taken into account but ultimately the decision about how much we pay and what that extra money is used for will be made by the Commissioners and Duke’s executives behind closed doors. This is not a democratic process.

[1] http://www.ncwarn.org/wp-content/uploads/NC-CLEAN-PATH-2025-FINAL-8-9-17.pdf