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North Carolina’s predominant utility is backing away from a long-held plan to double the size of its largest pumped storage hydropower plant — just as data centers and other voracious energy users threaten to stretch power supplies to their limit.
The reversal was tucked away in Duke Energy’s latest long-term blueprint, which was filed in October and will be evaluated and finalized by regulators this year. Clean energy advocates had expected to fight that blueprint on familiar fronts — from its inclusion of new gas-fired power plants to its complete lack of near-term wind energy — but they were surprised by the backpedaling on the Bad Creek storage facility, located just over the border in South Carolina.
“Duke put this forward as something they were going to do, and everybody agreed,” said David Neal, senior attorney at the Southern Environmental Law Center. “To take out the one thing that everybody agreed on, without any announcement, without any fanfare,” he said, “is just baffling to me.”
Pumped hydro is a uniquely useful form of carbon-free electricity. It’s available on demand and can dispatch power over a much longer period than a lithium-ion battery can. It’s also rare: Construction of new pumped hydro facilities in the U.S. has stagnated for decades.
Duke’s original Bad Creek expansion plan would have catapulted the company to become the nation’s leader in pumped hydro. Now, advocates fear its about-face will undermine the state’s zero-carbon law by opening the door for a fleet of new gas plants instead.
Hydropower is one of the oldest forms of electricity generation — and it’s how Duke Energy, then called the Catawba Power Company, got its start in the early 1900s. A trio of entrepreneurs, led by James B. Duke, built a series of dams and lakes along the Catawba River, fostering the growth of mills and other industries that helped diversify the region’s economy.
Today, traditional hydropower makes up a tiny fraction of Duke-owned power capacity, with nearly 1.3 gigawatts spread across 25 different sites in the Carolinas. There’s no push to change that number, as conservation groups focus on removing the thousands of other dams in North Carolina that provide little to no upside to outweigh the ecological damage they cause.
Pumped storage hydropower — like that at Bad Creek — is a related but different beast. Two bodies of water at different elevations are connected with reversible turbines, producing or storing electricity, depending on what the grid needs.
“Let’s say it’s a spring day, a sunny day, a lot of solar on the grid, but not a lot of demand. You just bring that water uphill,” to store in the upper reservoir, Neal explained. “When you’re in a peak period, you run the water back downhill to generate electricity. It’s a very efficient, clean way of having storage.”
Duke launched its first pumped storage project in 1975 after building a dam between what is now Lake Jocassee and Lake Keowee below it. On the South Carolina side of the Blue Ridge Mountains, the four reversible turbines are slated to operate for at least another two decades.
The Bad Creek complex followed in 1991. The upper reservoir sits at an elevation of 2,310 feet, and Lake Jocassee, more than 1,000 feet below, serves as the lower reservoir. They’re linked by an underground concrete tunnel and a four-turbine powerhouse, capable of supplying enough electricity to power 1 million homes.
Totaling over 2.4 gigawatts, the Jocassee and Bad Creek plants function as massive batteries, and are the largest source of energy storage anywhere on Duke’s six-state electric system. According to the U.S. Energy Information Administration, only two states, Virginia and California, have more pumped storage capacity.
Duke recently upgraded the existing Bad Creek facility, increasing its capacity to nearly 1.7 gigawatts. But the utility has also long envisioned drilling a new tunnel and adding another four-turbine powerhouse at the site, adding another roughly 1.8 gigawatts. Doing so would help the company zero out its carbon emissions by midcentury, as required by state law.
In 2022, the company offered four pathways to limit its pollution; all included the expansion, dubbed Bad Creek II, by 2034. The additional Bad Creek capacity was also cemented in a compromise Duke struck with stakeholders to help get its last carbon-reduction plan approved. Regulators on the North Carolina Utilities Commission blessed the deal, directing the company to pursue “all reasonable development activities” to put Bad Creek II in place.
But in October, when Duke submitted its 2026 carbon proposal, Bad Creek II was barely mentioned. Among 10 different pathways the company charted toward climate neutrality, only one included the new pumped storage capacity.
Earlier in 2025, Duke had quietly removed Bad Creek II from an engineering study that evaluated the impact of new power plants on the transmission system. The removal means that the soonest Bad Creek II could come online is now 2040 — six years later than previously envisioned — but the company doesn’t recommend even that late date or pinpoint a new one.
“Notwithstanding the delayed development timeline,” Duke said in its plan, the utility remains “committed to exploring the potential for additional [pumped storage hydro] capacity at the Bad Creek II site.”
The backtracking has alarmed clean energy advocates, who point out how well pumped storage complements other sources of renewable energy. Duke’s own modeling shows that adding Bad Creek II would enable more solar, onshore wind, and batteries, while eliminating the need for over 2 gigawatts of new gas plants.
“That all seems like a really good deal, and if we could do that sooner, as Duke had committed to in the last plan, and as the commission ordered it to do,” Neal said, “we’d be on such a clear path to complying with state law and having a much more diverse portfolio.”
Duke acknowledged that Bad Creek II would lead to lower overall costs than its preferred plan through 2050. Viewed in that light, Neal said, “it seems like a really bad deal for customers for Duke to be turning its back on this project.”
In its proposal, Duke offered no specifics on the long-term cost impacts of Bad Creek II, but did say that removing it from the grid impact study showed savings of approximately $358 million in “network upgrade costs.” By punting on the project, the company also put off spending tens of millions of dollars on development activities.
Asked for more justification, beyond those up-front savings, for Duke’s bid to delay the project, spokesperson Bill Norton said via email: “More work is needed to assess whether Bad Creek II will be part of a least-cost plan for customers.”
As to whether the company might shelve the project entirely, Norton said that it “remains a potential resource in the future.” He added that Duke plans to spend enough money to qualify the expansion for time-limited 30% federal tax credits and that the potential for additional turbines is included in Duke’s relicensing application to federal regulators.
“While there is no specific timeline today for a second powerhouse,” Norton said, “our continued licensing work preserves the option for the future, and we will continue to engage our regulators on this decision.”
As the commission evaluates Duke’s long-term plans, advocates will be pushing for a green light on the Bad Creek expansion — especially as an alternative to the other, more speculative sources of firm power that the utility is banking on, like small modular reactors.
In contrast to that form of nuclear power, pumped hydro is “not a nascent technology,” said Justin Somelofske, senior regulatory counsel at the North Carolina Sustainable Energy Association. That’s why in past hearings over the utility’s plans, he noted, “it was the one resource that was not in controversy and not contested.”
“One of the biggest things that we consistently hear from the Utilities Commission is the need for more dispatchable, reliable generation,” Somelofske said. “Pumped storage satisfies that need.”
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