Governor tells lawmakers to 'go back to the drawing board' on major energy bill

The nearly 50-page bill, crafted over the last few months by Duke Energy, representatives from the renewable energy industry, major electricity customers and House Republicans, would set nearly a decade's worth of state energy policy. It includes regulatory changes that Duke has wanted for years, significantly boosts solar energy generation in the state and pushes forward on re-licensing existing nuclear plants and toward building a new one.

The measure also would retire five coal plants around the state years faster than currently planned.

But in doing so, environmental advocates said, the bill relies too heavily on natural gas to fuel North Carolina's need for electricity. Manufacturing groups said the bill would let Duke lock in extra profits and raise rates to levels that could drive industry out of state. The bill itself says it's generally in line with long-term energy plans that Duke and other utility companies have already filed with regulators at the North Carolina Utilities Commission.

Cooper, who rarely weighs in this early in the legislative process, said the bill would "cost ratepayers too much, fall short of clean energy goals, hamper job recruitment and weaken the Utilities Commission, which exists to provide accountability for utility companies."

"It takes some steps toward more renewable energy but not nearly enough, and it’s clear they need to go back to the drawing board and negotiate with a broader spectrum of stakeholders in order to get a better plan," Cooper said.

Republican lawmakers who have worked on the bill for months said during the first public hearing on it Thursday that they're keeping an open mind on at least some changes. But the bill already has support from Duke, electric co-ops that serve rural areas of the state and the North Carolina Chamber. Supporters said the measure would cut greenhouse gas emissions from power plants in the state by 61 percent by 2030, compared with 2005 levels.

House Bill 951has a long way to go to become law, and Cooper's salvo against it makes for longer odds. Rank-and-file lawmakers from both sides of the aisle called Thursday for a go-slow approach on the bill, which is dense with industry and regulatory jargon. The bill summary alone runs 15 pages, and it took legislative staff some 25 minutes Thursday to outline the proposal for lawmakers.

"This bill obviously has consequences," Rep. Charles Graham, D-Robeson, said after that explanation. "I’m not sure what those consequences are.”

One would break up the company. Another could move the headquarters out of state, something Cooper and other state leaders have spoken out against.

As for power generation, a decision looms on an extension to the Mountain Valley Pipeline, which would bring more natural gas into North Carolina. The bill includes a sweetener for the project, pledging to shift Duke's Roxboro power plant from coal to natural gas if the supply is available by 2027. Otherwise, one of the largest power plants in the country would keep burning coal.

Rep. John Szoka, R-Cumberland, who helped write House Bill 951, said it would put more than 5 gigawatts of new solar power onto the energy grid. Alex Miller, a lobbyist for the solar industry, said that's enough to power 750,000 to 1 million homes.

The bill would also boost nuclear generation, requiring Duke to submit license renewals for its six current nuclear facilities and authorizing up to $50 million to pursue an early site permit for a next-generation modular facility. The bill authorizes the company to seek federal grants for the project and then charge customers for leftover costs.

Manufacturing groups that participated in the closed-door process that got the bill this far are now largely against the language that emerged. Some 30 textile manufacturers sent lawmakers a letter Wednesday expressing "grave concern" with the bill's cost impacts. A lobbyist for Parkdale Mills, one of the world's largest yarn spinners, told legislators the bill would "foster unsustainable increases."

Kevin O'Donnell, a consultant for the Carolina Utility Customers Association, a which represents large industrial energy users, said the bill would boost costs by 50 percent over this decade, largely to pay for grid upgrades Duke hasn't been able to get the Utilities Commission to sign off on in the past.

“We urge you to vote no," CUCA Executive Director Kevin Martin told lawmakers, calling the increases "devastating to industry.”

The AARP came out against the bill as well Thursday, calling it a "secretly negotiated legislative proposal that will create several new surcharges and increase your energy bill."

But the N.C. Chamber backed the measure as a "forward-thinking bill." Lobbyist Peter Daniel Jr. said it embodies "the all-of-the-above approach [for energy] that we need at this moment.”

The bill itself speaks to an "all-of-the-above" strategy on power generation, and lawmakers supporting the measure have repeatedly stressed the importance of a move toward renewable energy, but with natural gas as a major part of the move away from coal-fired plants.

“The plan seeks to foster the right mix of energy generation … and minimize environmental impacts," said Rep. Dean Arp, R-Union.

Szoka, who has been involved with major energy negotiations in the House for several years, said the bill isn't perfect, and it won't be. He acknowledged its complexity and the impact every word may have for years on energy policy. He said that, two years ago, in discussion on a bill that also would have overhauled the way North Carolina regulates the energy sector, negotiators spent an hour and a half discussing whether a semicolon should divide two phrases, or whether they should be two separate sentences.

He acknowledged that the new bill will increase costs, but he reminded everyone that "you can't have everything" as the state looks to cut carbon outputs.

"That’s just the way life works," he said.