Dive Brief:

• A Duke-supported group has launched a campaign against a bill that would direct the North Carolina Utilities Commission to study potential power market reform in the state.

• The campaign claims to reveal "the ugly truth" about regional transmission organizations (RTOs), which it calls "a Really Terrible Option," and is a project of Citizens for a Responsible Energy Future (CREF), a group that received $500,000 in donations from Duke during last year's state primary elections. Though Duke says it does not direct how groups spend its donations, Democratic legislators say the utility is the only organization in the state to have directly lobbied against the bill.

• CREF has drawn ire from Republican leadership in South Carolina, who accused Duke of attacking the North Carolina bill's primary sponsor, Rep. Larry Strickland, R, following the passage of a similar bill in South Carolina last fall. "Mega-utiltiies with monopolies are being challenged," Sen. Tom Davis, R, who sponsored the South Carolina bill, said in a tweet.

Dive Insight:

Momentum for Southeast power market reform has been building since last year.

South Carolina legislators in September passed a bill directing the state to study whether a more competitive power market could benefit customers. And in North Carolina, a wide range of stakeholders issued a report in December that, among other things, listed the formation of a regional transmission organization for the Carolinas or "a larger southeast footprint" as a potential path to meet Democratic Gov. Roy Cooper's goal of reducing carbon emissions 70% below 2005 levels by 2030, and reaching a carbon-neutral power sector by 2050.

In April, a bipartisan group of North Carolina House members introduced House Bill 611, a bill that would conduct a study, similar to the one in South Carolina, exploring the potential public benefits of an RTO.

Duke, Southern Company, Dominion Energy and others filed a proposal to create Southeast Energy Exchange Market with federal regulators in February, though the renewables industry and some regional stakeholders, including Rep. Davis, worry the proposal doesn't do enough to open the state up to more compeititon.

Currently, states in the Southeast run under a vertically-integrated power market structure, wherein major investor-owned electric utilities own all aspects of power production and delivery. Other regions of the U.S., including the Northeast, operate under models where generation ownership is more competitive.

Duke spokesperson Neil Nissan said the utility does not think it's necessary to revisit North Carolina's current market structure "at this time."

"North Carolina is poised to make great progress towards modernizing our state's energy plans under a regulated model that holds energy providers accountable for reliable power and investing appropriately for the state's needs now and in the future," he said, referring to a bill being negotiated among Duke, Republican leadership, the renewable energy industry and industrial consumer groups behind closed doors. The bill is expected to include a plan to transition the utility more quickly away from coal, bring more clean energy online and establish regulatory reform of some kind.

Democrats have been closed out of those negotiations, but see no problem with "exploring alternatives" to the current regulated monopoly structure, said Rep. Pricey Harrison, D, who cosponsored HB 611.

"Duke Energy knows how bad its reputation is among consumers and they are rightfully worried that the legislature can, and possibly will, try and figure out if there are modifications they can make to produce and distribute electricity that are in the better interest of consumers," said Rep. Graig Meyer, D, who is also a cosponsor.

"If I do hear about politics from people [in my district] it's going to be one of two things: they're either going to be complaining about their cable company or Duke Energy … people hate Duke Energy," he said.

The bill's primary sponsors include three Republicans and one Democrat. None of the primary sponsors responded to requests for comment by time of publication.

No other group besides Duke has come to legislators to lobby against the bill, according to Reps. Harrison and Meyer.

Duke lobbyists approached House Democrats in opposition to the legislation after it was introduced, claiming it to be an "anti-Duke" bill, said Meyer, "so it doesn't surprise me that they're directly lobbying against it."

Republican South Carolina Sen. Davis also charges that the CREF campaign is an attempt by Duke to undermine any effort that would loosen their hold on the region.

"Mega-utilities with monopolies are being challenged; with momentum in both Carolinas building to bring competition to energy-production markets, @DukeEnergy acts clandestinely via an insipid 'citizens group' account to attack NC reformer @RepStrickland," he said in a tweet. "But the truth will out."

Strickland's office declined to comment.

CREF's campaign against building an RTO in the state warns that doing so will bring the "RTO energy crisis" of Texas and California to North Carolina, referring to rolling blackouts that struck the states last year due to extreme weather and other conditions. The campaign has largely taken the form of social media advertisements across Facebook and Twitter. CREF is a tax exempt "527" group that Duke donated half a million dollars to during the 2020 state primary campaigns, Energy News Network reported last year.

Nissan said the company contributes to "various 527 organizations whose missions we support," but added the groups are "independent, and their contributors do not dictate the steps they take to advance their missions." He directed Utility Dive to CREF to answer any questions directly related to their work.

"Citizens for a Responsible Energy Future is an independent group that complies with all state and federal disclosure requirements and advocates for a sustainable energy future through responsible policies that promote prosperity, economic growth, and well-being," said Scott Gardner, a former Duke employee and current secretary and treasurer of CREF in an email. Gardner worked at Duke for 33 years in state government affairs and retired from the company in 2010, he said.

Martin & Blaine, The Differentiators, is also an affiliate of the group, listed on CREF's Facebook as the page's manager. The firm advises companies on public relations and political campaigns. Jim Blaine, a partner with the firm and a former North Carolina Republican Senate staffer, directed Utility Dive to Gardner and another former Duke employee, Tony Almeida, who was Duke's vice president of large business customers, for comment. Almeida did not respond.