Bill putting renewable requirements on hold hitches ride on natural gas bill
Posted May 19, 2015
Raleigh, N.C. — The running battle over renewable energy standards and solar energy that invaded the House budget debate Monday and brought controversy to the House floor earlier this month spilled over into the Senate Commerce Committee on Tuesday.
Renewable energy producers say the measures will cost jobs, but Reps. Mike Hager, R-Rutherford, and Chris Millis, R-Pender, said requirements that power companies buy a certain portion of their energy from renewable sources drive up costs for consumers.
"What we're trying to do on that is protect those folks in each of your districts that can least afford to pay more on their power bills," Hager told senators on the Commerce Committee.
The changes Hager is seeking have already passed the House as part of a regulatory reform package. But such reg reform bills are often controversial, with members of the House and the Senate often disagreeing over what constitutes reform. Those bill often ping-pong between the two chambers before the end of session, and their futures are far from certain.
In the Senate, the measure hitched a ride on House Bill 332, a proposal to ensure that natural gas lines could be extended to manufacturers in rural areas. That bill is mainly viewed as an economic development measure and is relatively uncontroversial.
But the renewables section tacked on Tuesday partially unravels a 2007 deal between power companies, renewable energy generating businesses, lawmakers and others.
That 2007 law required that power companies in the state – Duke Energy and a handful of energy cooperatives – buy a certain percentage of their power generated by wind, solar, biomass and other renewable energy producers. Today, that percentage is 6 percent, but it scheduled to step up to 10 percent in 2018. The Hager bill freezes that level at 6 percent and asks a legislative committee to study the variety of places where North Carolina gets its power.
Hager, an engineer, is a former Duke Energy employee. His bill also curbs requirements that electric utilities buy from municipal sources when they don't need the power. Millis said this merely allows the free market to work and that it makes little sense to force a company to buy a product it doesn't need.
"It sounds like you've got one camp that's real interested in promoting the wind and solar industry and another camp that's interested in trying to save the rate-payers," said Sen. Bill Cook, R-Beaufort.
Renewable energy advocates disagreed.
"A free market for energy does not exist in North Carolina. The utilities have been granted a monopoly," said Betsy McCorkle, a lobbyist for the North Carolina Sustainable Energy Association.
She pointed out that the average ratepayer has saved $8 on his or her utility bills as a result of the renewable energy requirements.
That ran counter to arguments put forward by Americans for Prosperity, a national conservative group that is part of the network funded by oil billionaires Charles and David Koch, and the John Locke Foundation, a conservative North Carolina-based think tank. Both groups claim that renewable energy set-asides would drive costs up.
"What you're doing is stopping residential rates from nearly tripling on your constituents," said Joseph Kiser of AFP.
In reality, a consumer's entire power bill wouldn't triple.
It appears Kiser was referring to the portion of the bill that subsidizes renewable energy purchases. The tripling figure is based on a worst-case scenario in the 2007 bill meant to contain costs for consumers. North Carolina rates have never run up against those cost-containment caps.
Duke did not take a position in the overall bill, but a lobbyist for the company did embrace a portion of the bill that would create a new committee to study how different pieces of the energy sector work together in the state.
While bill opponents pointed out that North Carolina is the only state in the Southeast that has this sort of renewable energy standard, the federal agency that tracks energy use and costs shows North Carolina electricity costs in the middle of the pack for residential consumers and among the lowest in the Southeast for industrial buyers.
John Morrison, chief operating officer for solar producer Ecoplexus, responded to the assertion that provisions in the renewable energy bill were negotiated with industry.
"There was no deal made. It was a conversation, as if one had a gun held to one's head," Morrison said, adding that the the bill in question would blunt the growth of the solar industry in North Carolina.
He and other opponents noted that the North Carolina Utilities Commission had rejected a provision that would limit how much energy power companies would have to buy from solar companies.
Angie Maier, a lobbyist for the North Carolina Pork Council, has said that provisions that help swine producers sell energy made from hog waste are vital to her clients' industry.
The bill as written, she said, "would have the same effect as repealing the law for us," she said. "The opportunity to create electricity from swine waste is critical to our industry."
The measure passed the committee on a voice vote.
The measure next goes to the Senate Finance Committee. It would then head to the Senate floor and then return to the House.