Why we need to overcome rather than accommodate Duke Energy’s influence on the political process In North Carolina
Avram Friedman is the founder and Executive Director of the Canary Coalition of western North Carolina, based in Sylva. The Canary Coalition has been focused on stopping air pollution in our beautiful mountains for over 20 years.
The Canary Coalition has been focused on stopping air pollution in our beautiful mountains for over 20 years.
The Canary Coalition is now engaged in political activism to stop climate change. Mr. Friedman states below his organization's take on how the climate change community in North Carolina and beyond should take on our main target in North Carolina, the largest and most air polluting utility in our country, Charlotte-based, Duke Energy.
Avram Friedman, The Executive Director, Canary Coalition
There is a life and death struggle going on today in the world, in the United States of America and in North Carolina. This struggle revolves around climate change and issues tightly related, such as energy production, land use planning, forestry, food-related agriculture and water usage.
The struggle is between those who are fully aware of climate change, its causes and its consequences and those who either are not aware or who are denying responsibility in dealing with it.
Leading among those who are denying responsibility are the industries that profit from the processes that are generating greenhouse gases, the petroleum industry, the coal industry, the natural gas industry and those industries that burn fossil fuels, the electric utility industry, agri-business and the auto-industry.
In North Carolina, this is a localized issue because we are home to the largest corporate member of the public utility industry in the nation, Duke Energy.
Duke Energy is inherently resistant to addressing climate change on the scale necessary to avoid its worst consequences. This issue is viewed as an existential threat by Duke’s Board of Directors and CEO; and rightfully so. Their outdated model of centralized energy production guarded by a regulated monopoly system is wasteful, inefficient and anathema to the struggle to address climate change. It is foolish to expect meaningful cooperation from this quarter to achieve the profound changes we need to successfully reduce man-made greenhouse gas production 80% by mid-century (or sooner), which is what the global scientific community has been desperately trying to communicate to the world for more than a decade. While Duke Energy’s spokespeople have given lip-service to addressing climate change in oblique terms, it’s important to understand that their perspective is viewed entirely through the prism of an entity that exists for the sole purpose of making money for its shareholders. This is not a condemnation of Duke Energy as an “evil” entity. It’s an acknowledgement of a political and economic reality. Duke Energy is a product of its times. At one time it may have been beneficial to create such a powerful, centralized economic entity to improve the quality of life for all people and enable the advancement of the industrial revolution. But, just as the typewriter and telephone dial have out-lived their usefulness, so has this mode of energy production and this form of over-sized and over-powered corporate entity.
Efforts to “work with” Duke Energy to address climate change are self-deceiving, counter-productive and misleading to those members of the public who may believe real progress is being made in this way.
We’ve learned since the crash of 2007 that if a bank is too big to fail it’s also too big to exist and should be broken up because such institutions ultimately pose a danger to democracy and make our country vulnerable to financial ruin. For similar reasons if a public utility is too big to fail, it makes us all vulnerable to its failures and to the consequences of a process designed to maximize profit rather than protecting public health and the environment as it strives to provide for all our energy needs. Because of the sheer size of this industry and its influence over our state government, it poses a threat to our democratic form of government, as well.
We’ve learned over the past decade that when we privatize a public prison system, it creates a sector in our economy that profits from mass incarceration. This powerful sector then advocates, lobbies and in other ways uses its financial and political influence to create laws for mandatory and longer prison sentencing because it’s in their economic interest to do so. As a result, the Land of the Free and Home of the Brave now has a larger percentage of its population in jail than any other nation on earth. In a similar way, we can be certain that a powerful corporate monopoly that exists to produce and sell electricity will advocate for public policy resulting in more energy production and consumption, despite scientific understanding of the catastrophic public health and environmental consequences. Isn’t it time to end the privatization of both the prison system and the centralized energy industry?
Let’s take a hard look at what’s going on between Duke Energy and the State of North Carolina. Since swallowing up Progress Energy in its 2013 merger, Duke now owns all commercial coal, natural gas and nuclear energy production facilities in the state. With the exception of a few rural electrical Co-ops who buy their power from Duke Energy and a few sparse areas bordering Virginia that buy from Dominion Power, it is illegal for anyone else in this state to sell electricity on the open market.
If you were to build a solar array in your backyard that produced more energy than you use, you would be breaking the law if you sold your excess power to your neighbor. You could only legally sell it to Duke Energy at a very low wholesale price. This is how the antiquated system of regulated monopoly interacts with modern solar technology. But, it doesn’t make sense either economically or environmentally. It’s inherently wasteful.
Long transmission lines that carry electricity from centralized power plants to the end user result in tremendous losses of energy. The further from the source, the greater the loss. The most economical and practical use of solar energy involves panels and arrays located as close to the end user as possible, preferably on the rooftops of houses, businesses and industrial facilities. Local solar production also allows for decentralized storage capacity or battery banks.
Duke Energy’s highly centralized and monopolized business model comes into direct, inherent conflict with the physical reality posed by the solar revolution. Solar energy simply does not lend itself practically or economically to a highly centralized model. Yes, as a result of North Carolina’s Renewable and Efficiency Portfolio Standard (REPS), Duke Energy has signed contracts to buy power from a host of 1-5 megawatt “solar farms” constructed in various remote places across the state. But, the building of these types of facilities is the most wasteful and inefficient way to use solar energy. The farms are designed to be “peak” power supplements for the baseload power plants that run 24-7 all year long.
This means that the only time these solar farms are contributing useful energy and reducing greenhouse gas emissions is during times of extreme peak load, when the sun is shining and ALL the baseload capacity is being used. At all other times the power being produced by the solar farms is thrown off the grid as waste heat with the rest of the excess power being generated by the baseload plants. This is because there is yet no practical way to store large quantities of centralized electrical energy. Still more energy from the solar farms is wasted due to the long distance transmission line losses to the end users.
Solar energy is only practical and economical when the systems are located close to the end user and can utilize small-scale storage or battery banks so the energy can be used at night or during periods of cloudy weather with no sunshine. In other words solar is inherently a decentralized energy technology.
This physical reality threatens Duke Energy’s monopolistic business model and we should expect this entrenched institution to do everything within its power to resist the transition. That’s why, during the 2015 NC legislative session Duke Energy used its political influence to end the solar tax credit. That’s why they opposed and killed the “Energy Freedom Act” that would have allowed 3rd party sales of rooftop solar-produced electricity in North Carolina. That’s why they’ve opposed and delayed consideration of the Efficient and Affordable Energy Rates Bill that would restructure utility rates to provide a powerful economic incentive for widespread investment in energy efficiency and rooftop solar energy in North Carolina.
Likewise, economically-driven large-scale energy efficiency public policy is a threat to Duke Energy’s monopoly and business model. Steady growth in sales will result in rising corporate stock values. A reduction in energy sales due to widespread and large-scale investment in energy efficiency is an inherent anathema to a corporate energy monopoly. They absolutely do not want to see a reduction in energy consumption from today’s levels.
Duke Energy, its money and its influence are ubiquitous throughout North Carolina. But, it can be overcome. Historically, it has been overcome numerous times with strong community organizing and popular rebellions that overwhelmed the political process.
In 1982, after Duke Power charged its customers for enormous cost over-runs for several uncompleted power plants, there was a huge public outcry that resulted in legislation that prohibited construction-work-in-progress costs being passed on through utility bills.
In 1986, over the stern objection of utility industry lobbyists and the US Dept. of Energy, the NC General Assembly placed an Advisory Vote on the statewide Primary ballot on the location of a high-level nuclear waste repository in western North Carolina. 93% of the electorate voted Against the dump. The DOE changed its plans for creating an east coast nuclear waste repository. Duke Energy never uttered another word about it. This referendum resulted from a strong statewide grassroots petition and lobbying effort of the NC General Assembly.
In the mid-1980s the utilities industry lobbied for North Carolina to join the Southeast Low-level Radioactive Waste Compact and become the “host” state. This meant that North Carolina would have housed a new, massive, radioactive waste facility that would have accepted the waste from eight southeastern states. It would have become the largest such facility in the world. The lobbyists were entrenched, the General Assembly was being strong-armed and were going along with the plan. Governor Martin was in the pocket of the industry and trying to sell it to the public. But, a grassroots movement organized against it and eventually, after a long, protracted battle, won, when in July of 1999 the General Assembly voted to leave the Southeast Compact.
In 2002, a coalition of grassroots environmental organizations introduced the Clean Smokestacks Act in North Carolina. This legislation mandated that expensive modern emission control systems be installed on all utility-owned coal-burning power plants in the state. At first the legislation was vehemently opposed by Duke and Progress Energy. But, a powerful grassroots movement arose that made the passage of the bill inevitable. Eventually the industries saw the writing on the wall and agreed to the undertaking.
In addition to fighting the utility industry on individual issues it’s necessary to fight the larger battle, as well. In a Democracy corporations should not be allowed to wield such massive influence in the first place. More members of the environmental community need to get directly involved in calling for a U.S. Constitutional Amendment to end “corporate personhood.” Corporations are not people and should not assume the rights of people in the electoral process or in the process of influencing our local, state or federal governments. Corporate political campaign contributions should be banned and the 2010 Citizens United decision of the Supreme Court needs to be reversed.
Reading the newspapers and watching television newscasts can create the impression that ordinary people are insignificant and powerless against the “powers that be” in our country and in our state. But, the truth is that people have real power when they choose to assert themselves and organize together as a political force.
Fighting Duke Energy, breaking up this Leviathan corporate entity and ending the privatization of the power grid isn’t going to be the easiest thing to do. But, it’s the right thing to do.