Renewables rollback moves forward in House
Posted April 3, 2013
State House lawmakers are moving ahead with a proposal to freeze and repeal the state's renewable energy standards.
The measure, House Bill 298, passed a House Commerce subcommittee 11-10 on Wednesday. Reps. Ruth Samuelson, R-Mecklenburg, and Tom Murry, R-Wake, joined Democrats in voting against it.
The vote concluded a two-hour hearing at which the committee heard comments from 16 members of the public. All but three were opposed to the bill.
Critics of the bill included solar developers, small farmers, hog producers and green energy experts from the public and private sectors. All said they had benefited from 2007's Senate Bill 3, which established requirements for utility companies to acquire a growing percentage of their power from renewable sources.
North Carolina was the first state in the Southeast to adopt a Renewable Energy Portfolio Standard.
House Bill 298 would end set-asides and subsidies for solar energy, wind energy and other renewables.
John Morrison, chief executive of Strata Solar, which started four years ago and is now the nation's fourth-largest solar company, said the company built 10 solar farms in North Carolina, investing about $200 million. This year, it's on track to build as many as 30 projects worth $500 million.
But he warned that could change if lawmakers "send a bad message" by removing the state's support for solar power.
"We have to go to the capital markets" for funding, Morrison said. The bill "would send a very strong message to the investment community that North Carolina is no longer open for business for the solar industry."
Economist Ross Loomis with RTI International, a nonpartisan consulting group, says the state's renewable standards have driven $1.4 billion in investment to the state since 2007 and was responsible for 21,000 job-years.
Warren County Economic Development Director Gabe Cumming said his county's "solar boom" has brought more investment than any other sector, creating badly-needed jobs and local tax revenue.
Solar energy "is one of the rare forms of development that is accessible to rural areas as well as urban areas of the state," Cumming said.
Tom Butler with Butler Farms said his operation is one of six in the state currently producing power using methane from hog waste.
"Butler Farms is proud to be known as a high tech, environmentally friendly renewable-energy farm," he said. "The technology is dragging, but it’s coming along, and if we do anything to this bill, it will stop it."
A updated version of the bill rolled out Wednesday would protect swine and poultry waste support, but Craig Westerbeek with hog producer Murphy Brown said his employer is still opposed to the bill.
"It will send exactly the wrong message to prospective manure-to-energy investors," Westerbeek said, "and that’s the message that North Carolina's not serious about encouraging renewable energy products in this state.”
But supporters of the rollback, including the bill's sponsor, Rep. Mike Hager, R-Rutherford, say the price of renewable energy is too high, and state taxpayers and ratepayers shouldn't be forced to subsidize the sector.
"I understand you want this gravy train to continue," Hager told developers in the audience. "I see this as an entitlement program that’s beginning to get its roots into our state."
"We’ve been in this six years," he said of subsidies and support for solar power. "How much longer do we need to go?"
Dallas Woodhouse with conservative group Americans for Prosperity said Senate Bill 3 has driven up utility costs in North Carolina at the expense of ratepayers who may not even understand that "cost-recovery" charges added to their bill are paying for the renewable standard.
Woodhouse said environmentalists are pushing green energy because they want power to be more expensive.
"It is a goal of them to have higher electricity costs because they want to punish people for using power," he said. "They think using power is a bad thing. They want to punish people for flipping the switch."
Brian Balfour with conservative think-tank Civitas said that, while jobs may have been created by the green energy sector, other jobs have been lost because of higher energy prices and opportunity costs the sector has created.
"What does a society lose when resources are tied up satisfying a renewable energy mandate?" he asked.
Samuelson argued the bill should be delayed till 2014, giving a study commission time to determine which policy changes would best fit a long-term energy plan for the state.
She pointed out that, in a regulated monopoly like North Carolina, all forms of power production are subsidized to some extent.
"We are still picking winners and losers in this bill, and we are still giving subsidies. I just want us to be honest about that.," she said.
Samuelson also took issue with claims that getting rid of the renewable standard would help struggling ratepayers.
"There’s no guarantee that passing this bill is going to lower your rates," she said. "There are a lot of things that are causing electric rates to go up. This isn’t going to magically fix that problem."
Hager replied that solar requires much higher levels of subsidy than other modes of power generation.
Committee Chairman Jason Saine refused a request by Rep. Becky Carney, D-Mecklenburg, to hear from Duke Energy Corp. about the impact Senate Bill 3 has had on its operations.
Rolling back the renewable standard "is a huge change," Carney said, asking for the vote to be delayed till next week. "I don’t know what the rush is."
"That's why we had a two-hour meeting today," Saine, R-Lincoln, replied, noting that the bill still has to go through three more committees before reaching the House floor.