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Bills introduced in the General Assembly threaten to upend North Carolina's clean-energy future.

Renewable energy standards and tax credits could be repealed 

When a bill to promote renewable energy passed in 2007, North Carolina took a small step toward becoming energy efficient, gradually moving away from the unsustainable, unstable and polluting practices of coal and nuclear energy. But bills introduced recently in the General Assembly threaten to upend North Carolina's clean-energy future.

In 2007, a provision in Senate Bill 3 required that 12.5 percent of the electricity sold by the state's three investor-owned utilities companies come from renewable sources—wind, solar, hydroelectric—by 2021. North Carolina was the 25th state in the country, and the first state in the Southeast, to enact Renewable Energy and Energy Efficiency Portfolio Standards (REPS) laws.

Last week, Rep. Mike Hager, a Republican representing Burke and Rutherford counties, sponsored the Affordable and Reliable Energy Act, House Bill 298. It would eliminate the state's renewable energy standards, ostensibly to "reduce the burden of high energy costs on the citizens of North Carolina," as stated in the bill. Another blow to renewables came in Senate Bill 394, a comprehensive tax reform measure that would expressly repeal a renewable energy investment tax credit, in place for more than 30 years, that has been a major incentive for solar energy investors.

But renewables aren't related to high energy costs. In fact, a recent study released by RTI International and La Capra Associates shows that clean energy policies in North Carolina will save ratepayers $173 million by 2026.

Lowell Sachs, the NC Sustainable Energy Association's communications director, wrote in an email "from a ratepayer perspective, if HB 298 becomes law, they would have to forgo some or all of those savings."

The Sustainable Energy Association estimates that within the past five years, the total economic benefit to North Carolina from clean energy project development is $1.7 billion. More than 21,162 job years (one person working in a job for one year) have been created in that same time. Repealing REPS in North Carolina—which was rated No. 2 in the country for clean energy and clean transportation jobs in 2012 by the green business advocacy group Environmental Entrepreneurs—could make clean energy businesses wary of locating here by signaling that the rules are changing and that these businesses might no longer be welcome.

"What's been good about the REPS is, it hasn't really come with a cost," said Rep. Pricey Harrison, D-Guilford, a clean energy proponent and sponsor of several bill promoting renewable energy resources. "It's created jobs. It's ultimately reduced energy bills and reduces our carbon footprint. It's a low-cost way to achieve a cleaner future, and more energy security. I think it's a false narrative to think that the answer is fracking and offshore-drilling, because fossil fuels are not the future."

The push to repeal REPS in North Carolina has a national precedent. "The [right-wing public policy think tank] Heartland Institute has been doing training on it, and I think the Koch brothers fund that training," Rep. Harrison said. "All across the country, I'm told Kansas and Ohio are the closest to getting [their REPS] repealed. This is a concerted effort by conservatives to repeal REPS laws all over the country."

Last October, the American Legislative Exchange Council (ALEC) approved the "Electricity Freedom Act," a model bill that explicitly seeks to repeal requirements that utilities generate a portion of their electricity from renewable sources. Rep. Hager is affiliated with ALEC, as are Rep. Marilyn Avila, R-Wake, and Rep. George Cleveland, R-Onslow, two of HB 298's other primary sponsors; four co-sponsors of the bill are also ALEC affiliates. None of the bill's primary sponsors responded to INDY Week's requests for comment.

The move to repeal REPS is also unpopular. A poll conducted by the Fallon Research group asked 803 registered N.C. voters if they agree or disagree that elected officials should seek more alternative and renewable energy sources; 75.7 percent of Republicans agreed, 89 percent of Democrats agreed, and 81.6 percent of independents agreed.

And while it hasn't been inexpensive for utilities companies to factor REPS into their long-term business plans, they've done so nonetheless and have indicated that they wouldn't support an abrupt reversal of policy. Duke Energy had input into Senate Bill 3, says Jeff Brooks, a media spokesperson for the utility.

"We were part of that consensus, and so we've been working to comply with the requirements of the existing Renewable Energy Portfolio Standard," he adds. "We've met our 2012 requirements, and we're on track to continue meeting the requirements of that standard going forward. We would want to be part of a consensus in any proposed legislation as we were in Senate Bill 3."

Provisions in SB 3 allow utilities to recover costs unrelated to fuel. HB 298 would not repeal these provisions, which Sachs says allow the utilities companies to pass some costs related to renewable energy contracts to their customers.

It is unlikely that repealing REPS would achieve the objective of making utilities rates more competitive for consumers. "North Carolina has a highly regulated electricity market where only utilities can sell power directly to consumers," wrote Sachs. "This monopoly control of our utilities limits innovation and market competition. The REPS law was a real boon because it presented the first opportunity for clean energy companies to compete and offer consumers a choice. Scrapping the REPS at this point would put all those benefits at risk."

This article appeared in print with the headline "Sticking it where the sun don't shine."

  • Bills introduced in the General Assembly threaten to upend North Carolina's clean-energy future.

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