Agenda 05-21-24; 8-f - Comment Letter Addressing Duke Energy’s Proposed Carbon Plan Integrated Resource Plan Submitted to the North Carolina Utilities Commission

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8 used. The inclusion of these tax credits in resource plan modeling is crucial for maximizing affordability for consumers and helping the utility meet its environmental, equity, and operational goals. However, while Duke's CPIRP acknowledges the significance of the IRA and IIJA with some updated cost assumptions, there is further opportunity for Duke to integrate the potential IRA savings opportunities into its resource planning. The failure to integrate the Energy Infrastructure Reinvestment (EIR) program' is a significant omission that is worthy of scrutiny in the CPIRP. The EIR program, established by the Inflation Reduction Act, offers up to $250 billion in federal loans for projects aimed at lowering the cost of the energy transition. This program provides loans at favorable rates, slightly above the Treasury rate, for terms up to 30 years, offering a financially viable route for Duke to finance its decarbonization efforts at even lower costs. The EIR can enable acceleration in the retirement of fossil infrastructure and investment in clean and low-emission resources, substantially easing the economic burden on ratepayers compared to traditional financing methods. Utilities are statutorily required to pass the savings from EIR to their customers and fossil communities impacted by the transition, making it a likely integral component for achieving North Carolina carbon reduction goals at least cost. This could take the form of community benefits plans that ensure job training and replacement with highly skilled, high paying job opportunities for workers and communities displaced by the shift away from fossil resources. Local governments have a vital role in ensuring that communities in North Carolina that have historically relied on fossil fuel-related industries benefit from the decarbonization of the power sector, but they will be stymied in those efforts if Duke misses this financing opportunity. Duke's current omission of EIR from the resource planning scenarios raises concerns among the undersigned local governments. In addition to the economic impact concern, this oversight has potentially hidden a more aggressive and cost-effective portfolio that meets the states emission reduction targets in a timely manner. Integration of EIR is likely a crucial component in capacity expansion modeling given that not all investments would be eligible for EIR financing. As such, the supply curve for certain technology costs is likely altered by the potential for EIR applicability, offering a lower cost of clean generation and grid investments, vital for North Carolina's affordable decarbonization transition. Moreover, the EIR loan authority is set to expire in September 2026, making the 2024 CPIRP the primary planning opportunity for the Commission to evaluate the potential savings this federal funding could offer the state. The incorporation of EIR into Duke's carbon plan is not just beneficial but essential. It will capitalize on low-cost federal funding to foster a more cost- effective and efficient transition to cleaner energy infrastructure. We urge Duke to reassess its carbon plan and include EIR as a central component of its capacity expansion modeling. This 'Title 17 Clean Energy Financing—Energy Infrastructure Reinvestment,see httr)s://www.energy.gov/Igo/energv-infrastructure- reinvestment 6