After Scrapping Gas Pipeline, Duke Looks to Plug Hole With Renewables, Grid Investments

Good News Notes:

Duke Energy on Monday reported a $1.6 billion charge related to abandoning the Atlantic Coast Pipeline. The utility also laid out how its renewable energy and grid modernization plans will fill in the capital-investments hole left by the canceled multibillion-dollar natural-gas project.

Duke reported a second-quarter 2020 loss of $817 million, or $1.13 per share, with the pipeline cancellation costs taken into account. Excluding those one-time losses, the multistate utility reported non-GAAP net income of $809 million or $1.08 per share, compared to $1.12 per share in the same quarter last year.

Duke and partner Dominion Energy canceled the Atlantic Coast Pipeline (ACP) last month in the face of project costs that had risen from about $5 billion when it was launched to as much as $8 billion this year, as well as the likelihood of further delays and cost increases from legal challenges by landowners and environmental groups.

Both utilities had planned to use the pipeline to supply their natural-gas distribution businesses and to fuel gas-fired power plants. At the same time, both have pledged to decarbonize their operations completely by midcentury, along with interim goals to significantly cut carbon emissions from their generation fleets over the next decade — a contradiction highlighted by pipeline opponents.

Duke’s zero-carbon plan calls for a 50 percent reduction in emissions by 2030, driven largely by utility-scale solar development in North and South Carolina and Florida, part of a broader plan to double its current 8-gigawatt fleet of renewables by 2025. 

Duke also plans to replace closing coal plants with natural-gas-fired power in its key North Carolina service territory, a move that will be complicated by the loss of supply from the canceled pipeline. 

Losing the ACP will also leave a hole in its $56 billion capital investment plan for the next five years, including a roughly $2 billion shortfall for 2021. CEO Lynn Good said during Monday’s earnings conference call that the utility is “actively pursuing alternatives” to that capital investment to retain its $56 billion target.”

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