DOE authorizes Duke Energy to exceed emissions limits to maintain Carolinas grid stability

Why did the U.S. Department of Energy activate a Section 202(c) order for Duke Energy during the 2025 summer heat emergency?

The United States Department of Energy has issued an emergency order permitting Duke Energy Carolinas, LLC to operate beyond federal environmental limits to safeguard power reliability amid an ongoing heatwave in the southeastern United States. The directive, issued under Section 202(c) of the Federal Power Act, enables the electric utility developer to activate select generating units that may emit pollutants beyond regulated thresholds, but only during designated emergency periods.

This decision follows a formal emergency application from Duke Energy, which projected that a sustained period of abnormally high temperatures and humidity—driven by a stalled atmospheric ridge—would push electricity demand across its service area in North Carolina and South Carolina to critical levels. Forecasted peak loads were estimated at approximately 21,968 megawatts for Duke Energy Carolinas and a total of 35,623 megawatts across the Carolinas grid.

The federal order remains effective until 10:00 PM EDT on June 25, 2025, and limits operations to periods of declared Energy Emergency Alert (EEA) Level 2 or higher. Secretary of Energy Chris Wright emphasized that the measure is temporary, targeted, and environmentally bounded to “only the hours necessary to meet the emergency and serve the public interest.”

What specific power supply constraints led to Duke Energy’s request for federal intervention under Section 202(c)?

The request submitted by Duke Energy on June 23 outlined multiple compounding constraints. While most of the electric utility developer’s generation fleet was reportedly operational, approximately 1,500 megawatts of capacity had been rendered unavailable due to outages or deratings, including several large thermal units. Simultaneously, environmental permit conditions limited the output of certain plants, reducing flexibility during peak hours.

The intense heat, with temperatures expected to range between 96°F and 102°F—and heat indices surpassing 110°F—has significantly elevated cooling-related electricity demand. Analysts noted that such “heat dome” events create peak loading curves that can overtake reserve margins even in otherwise stable grid regions.

To mitigate the risk, Duke Energy declared Grid Status Red and initiated a suite of pre-contingency actions. These included issuing public conservation alerts, invoking residential demand response contracts, and triggering curtailments for large commercial and industrial consumers. Additionally, the firm suspended all recallable energy sales and maximized available imports through the Carolinas reserve sharing group. Despite these measures, the utility secured only 1,332 megawatts in external capacity—insufficient to fully close the anticipated shortfall.

Institutional sentiment was broadly supportive of the emergency filing, with regional reliability coordinators backing the assessment that environmental limits could constrain vital generation during the system’s highest risk periods.

Which power generation assets are covered under the DOE’s emergency authorization and how can they operate?

The Department of Energy’s emergency order applies to a specific list of generation units designated as “Specified Resources” in an accompanying Exhibit A, which remains subject to updates. These units are permitted to operate beyond their federally regulated emissions limits, but only under narrow conditions—primarily during declared EEA Level 2 or Level 3 events, when system reliability is imminently threatened.

The order permits three primary operational flexibilities. First, units that would otherwise need to reduce output due to environmental permits may exceed those limits while the grid is under EEA-2 or EEA-3 alerts. Second, any offline or soon-to-be-curtailed unit may remain operational if needed to maintain capacity. Third, Duke Energy may keep units online in advance of such emergencies if doing so avoids cycling, which can cause both operational delays and emissions spikes during restarts.

Duke Energy must notify the DOE daily of each unit operated under these provisions. The electric utility developer must also exhaust all alternative sources—including demand-side resources and imports—prior to invoking these waivers.

The DOE underscored that while temporary emissions exceedances are permitted under this order, all monitoring, recordkeeping, and offset obligations still apply. Any air quality impacts must be reported, and Duke Energy remains financially responsible for any environmental compliance costs incurred.

How is this emergency power order being balanced with long-term environmental and public health considerations?

While Section 202(c) grants the Secretary of Energy authority to override environmental laws during declared emergencies, such orders must align with statutory requirements to minimize environmental harm. The DOE emphasized that this waiver applies only “to the maximum extent practicable” and is limited to the period of acute demand stress.

Duke Energy must return all units to operation within their environmental limits immediately after the emergency alert ends. Furthermore, the electric utility developer is required to report all emissions exceedances and continue meeting permit obligations for monitoring and pollutant accounting.

Environmental advocates have in past emergencies expressed concern about recurring 202(c) waivers, warning that frequent exemptions may weaken long-term air quality protections. However, institutional voices generally accepted the necessity of the waiver in this case due to the convergence of extreme weather and constrained thermal capacity.

The DOE has also maintained that any future order extensions will require a new request from Duke Energy and a fresh emergency assessment.

What does this heat-triggered energy crisis signal about grid resiliency in the southeastern U.S.?

This emergency underscores the growing volatility in regional grid reliability as utilities contend with a combination of aging infrastructure, rising summer peaks, and evolving environmental compliance frameworks. While North Carolina and South Carolina have historically been seen as lower-risk regions due to their fuel diversity and interconnection strength, changing climate patterns and urban growth are shifting that assumption.

Institutional investors have taken note, with energy-sector analysts indicating that reliability events like this may accelerate capital deployment toward grid hardening and flexible capacity. These include investments in battery energy storage, gas peaker upgrades, virtual power plants, and greater demand-side digitization.

Regulators and public utilities commissions across the southeastern U.S. are also increasingly being asked to review whether existing reserve margin targets are adequate under changing load curves. Rising ambient temperatures, coupled with air-conditioning dependency, can push traditional summer margins into dangerous territory even with high availability ratios.

Looking ahead, analysts expect further scrutiny of Duke Energy’s integrated resource planning process. This includes how the electric utility developer balances emissions reduction targets with real-time dispatchable power during climate-driven stress events.

What happens next if heat conditions or generation constraints persist beyond June 25?

The current DOE order expires at 10:00 PM EDT on June 25, 2025. Should Duke Energy determine that emergency conditions persist beyond that timeframe, it must file a renewal request. The Department of Energy would then re-evaluate the emergency status and determine whether a continuation is justified.

In the meantime, Duke Energy is required to maintain full compliance with all reporting, environmental, and operational obligations under this order. Any newly designated generation assets must be submitted to the DOE and may be revoked if the agency does not approve the inclusion.

While temperatures are expected to moderate slightly with higher rain chances from June 26–27, institutional forecasts warn of additional heat episodes later in the summer, which could result in future 202(c) filings across multiple regions.