Duke Energy paid no federal income taxes in 2012

Just in time for Tax Day comes word that the nation's largest electric utility, Duke Energy, paid no federal income taxes on last year's profit of nearly $1.8 billion.

Duke instead got a $46 million rebate in 2012, says N.C. Policy Watch, a project of the anti-poverty group N.C. Justice Center. Last week's blog post cites previous work on corporate taxation and off-shoring of profits by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

Duke says it and other large companies are simply following the tax guidance in the federal government's 2008 economic stimulus package. Duke also accelerated $9 billion in spending to replace old power plants and upgrade other infrastructure, creating "tens of thousands" of temporary and permanent jobs, it says.

Much of Duke's tax treatment relied on deferrals related to accelerated depreciation, Citizens for Tax Justice has reported. That's allowed Duke to take in $299 million in federal rebates despite profits of $9.1 billion between 2008 and 2012, for a negative tax rate of 3.3 percent, Policy Watch calculates.

"If Duke wants to get serious about living up to its claims about what it is and what it stands for and begin to repair its tarnished image, it would do well to begin by paying its federal income taxes," Policy Watch writes, referring to state investigations of Duke's merger with Progress Energy.

Duke will ultimately have to pay the deferred federal taxes, spokesman Tom Williams said. Duke also paid $402 million in property and other utility non-income taxes in North Carolina in 2012, the company said.

New air rules would hurt coal power, study says

Tougher federal air standards could further tilt U.S. electric power away from coal fuel and toward natural gas, says a Duke University study published online this week.

Utilities including Duke Energy are fast moving toward gas as prices drop, retiring older coal-burning plants rather than fit them with new pollution controls.

The cost of complying with stricter air regulations could make nearly two-thirds of the nation's coal-fired power plants as expensive to run as those fueled by natural gas, the study found. That would be true even if gas prices rise to four times coal's cost, it says.

Duke Energy Carolinas' latest 20-year generation plan forecasts a 45 percent drop in coal use by 2032 and an 86 percent increase in natural gas. Duke Carolinas is retiring 38 coal-fired units in its territory.

The Energy Information Administration released this graph Friday. It shows that energy-related carbon dioxide emissions in 2012 were the lowest in the United States since 1994.

The Duke study was published in the online edition of Environmental Science & Technology. The study is behind a pay wall, but here's the abstract. The lead author is Lincoln Pratson, a professor of earth and ocean sciences at Duke's Nicholas School of the Environment, with Drew Haerer and Dalia Patino-Echeverri.

McCrory's budget slices conservation funds

Gov. Pat McCrory's first budget cuts conservation funding so deeply it could affect the state's economy, says Land for Tomorrow, a coalition of pro-conservation groups.

The proposed budget cuts:

-- The Clean Water Management Trust Fund to $6.75 million from $10.75 million this year, and includes an appropriation only for the first year of the biennial budget. The grandaddy of North Carolina conservation funds, Clean Water once got $100 million a year.

-- The state Parks and Recreation Trust Fund to $15.5 million from $27.5 million.

-- The Natural Heritage Trust Fund to $4.23 million from $9.9 million. The budget also removes the fund's dedicated funding, a portion of the deed stamp tax.

Advocates have pointed lately to conservation spending's effects on the North Carolina economy, including the creation of new state parks, 250,000 acres of state gamelands and protection of the borders of Fort Bragg and Camp Lejeune.

"The creation and consistent funding of North Carolina's conservation trust funds have been the result of bipartisan leadership over the past 25 years," said Katherine Skinner, executive director of the Nature Conservancy in the state. “These land protection successes have played a major
role in the state’s economy – boosting agriculture, the military, tourism, forestry, hunting,
fishing and outdoor recreation. As our economy continues to recover, we need to
continue a strong investment in these economic drivers. Gov. McCrory’s proposed
budget doesn’t reflect the level of investment needed to carry us forward.”

Stay tuned for how legislators respond.

NC was 5th-largest solar market in 2012

North Carolina was the fifth-busiest state for solar installations in 2012, says an annual industry analysis, and now ranks No. 6 in total solar capacity.

California became the first state to install more than 1,000 megawatts in a single year, said the analysis by GTM Research and the Solar Energy Industries Association. Nationally, the market size of the U.S. solar industry grew a record 34 percent in 2012.

North Carolina trailed only California, Arizona, New Jersey and Nevada in installing 132 megawatts last year, enough to supply about 22,000 homes. The state now has a total of 229 megawatts installed, good for sixth-place nationally, the report says.

Falling prices for solar components get credit for the strong growth, but so does North Carolina's renewable-energy portfolio standard. The law forces utilities to get some of their power from the sun and created new markets for solar developers.

Regardless, Republican state legislators filed a measure Wednesday that would gut the standard.

Bill introduced to kill NC renewable-energy standard

A measure to eliminate North Carolina's renewable-energy standard, the first in the Southeast when it was adopted in 2007, was introduced in the N.C. House Wednesday.

House majority whip Mike Hager, a Rutherford County Republican and former Duke Energy engineer, was among the bill's primary sponsors.

Hager had targeted the law for "picking winners and losers" in the energy marketplace. He's said the law unfairly forces consumers to subsidize renewable energy, which costs more to produce than traditional energy forms.

At the end of 2012, Duke Energy Carolinas, which serves Charlotte, was charging residential customers 22 cents a month to recover its costs of complying with the law. Progress Energy Carolinas, serving the state's eastern half and Asheville, charged 41 cents a month.

The N.C. Sustainable Energy Association, which represents the renewables industry, calls the portfolio standard "the first real opportunity for clean energy companies to compete with the utilities and offer consumers a choice."

The association says the standard has had too powerful an economic impact to destroy. Its 2012 jobs census found the equivalent of 15,200 employees working for 1,100 energy-related companies that pull in $3.7 billion a year.

Ban on limiting greenhouse gases before Senate committee

A measure that bans state agencies or local governments from regulating greenhouse gases comes before a North Carolina Senate committee today.

The bill, sponsored by Republican senators Brent Jackson, Andrew Brock and Jim Davis, allows limits only if they're required by federal law. Jackson, who's from Sampson County, and Brock of Davie County co-chair the Senate Agriculture / Environment / Natural Resources Committee, which meets this morning. [Update at 12:50 p.m.: The bill was pulled from the committee agenda.]

It's not immediately clear what impact the bill would have it becomes law.

Charlotte Mayor Anthony Foxx signed the city to a U.S. Conference of Mayors climate-protection agreement in 2009, committing the city to curbing greenhouse-gas emissions. But the city hasn't set a firm reduction goal.

The North Carolina Sierra Club says the bill is so sweeping it's hard to know whether it would apply to cases in which greenhouse gases are collected for purposes unrelated to climate change, such as methane capture at landfills.

But Sierra notes that Duplin County, in Jackson's district, is also the planned site of a 100-megawatt solar farm that would be by far the state's largest.

Wind farm energy might be over-estimated

Wind farms of the sort dotting the Plains states might have markedly less generating capacity than previously assumed, a UNC Charlotte researcher has found.

New research by UNCC's Amanda Adams and David Keith of Harvard University says the drag of large clusters of turbines slows wind enough to curb farms' generating capacity.

Conventional estimates have assumed large wind farms can sustain production of 2 and 4 watts per square meter. New atmospheric modeling by Adams and Keith show it's more likely limited to about 1 watt per square meter at farms larger than 100 square kilometers.

Their research was published Monday in the journal Environmental Research Letters. It was funded by the Natural Sciences and Engineering Research Council of Canada, which reports to Canada's Parliament.

"It's easy to mistake the term 'renewable' with the term 'unlimited' when discussing energy," Adams said in a UNCC release. "Just because you can keep generating new energy from a sources does not mean you can generate energy in an unlimited amount."

Adams' research group focuses on the interface of energy, weather and climate. Densely-placed wind turbines can also have environmental impacts, her research found, including low-level warming when wind farms change natural wind shear and produce turbulence.