Critics Say Duke Energy Is Trying to Roll Back Regulations and Corner the Market on Solar Development | News Feature | Indy Week
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Critics Say Duke Energy Is Trying to Roll Back Regulations and Corner the Market on Solar Development 

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A bill supported by Duke Energy and sponsored by legislators who have collectively received more than $68,000 from the energy giant would hobble North Carolina's solar boom, critics contend, by giving Duke an outsize say over how—and on what timetable—the industry develops in the state.

House Bill 909 would roll back provisions of the 1978 Public Utilities Regulatory Policies Act, which requires Duke to purchase renewable energy projects, like solar, from independent producers at the "avoided cost" rate—essentially, what it would cost Duke to do it itself—not the fair-market rate. It also entitles the small producers to a fifteen-year contract at that rate. Under HB 909, which was referred to the House Committee on Energy and Public Utilities two weeks ago, those contracts will only be good for up to ten years.

That may not sound like a huge difference. But Jeff McKay, communications director for Cypress Creek Renewables, says it will hurt solar companies' ability to finance projects. "It would become more difficult for investors to be interested when contracts become shorter," he says. "If it becomes a shorter-term contract, it's more difficult for investors to get involved, because it becomes risky for all the parties involved."

"It's not fair to renewable project developers," adds Lauren J. Bowen, an attorney with the Southern Environmental Law Center. "And it's going to undermine the goals of the federal law to encourage investment in independent power production from renewable power facilities."

Part of the National Energy Act, PURPA was designed to promote conservation by reducing the nation's demand for fossil fuels through the increased production of renewable energy. But Bowen and other HB 909 critics argue that the legislation would, in fact, limit North Carolina's solar infrastructure. The bill would put a four-hundred-megawatt cap—the power needed to light up sixty-five thousand homes—on the amount of electricity Duke would be required to create each year through contracts with solar companies.

Currently, more than three thousand megawatts of solar have been installed, in the Old North State, which only trails California in solar production. The Solar Energy Industries Association projects than an additional thirty-five hundred megawatts could be installed in the next five years, some fifteen hundred more than would be required under the bill's cap.

To date, North Carolina has created more than seven thousand jobs in solar, and most of the state's success can be attributed to large-scale projects that have been bolstered by incentives such as North Carolina's Renewable Energy and Energy Efficiency Portfolio Standard, tax credits, and PURPA. But under HB 909, critics say, Duke would be able to slow production to a crawl and complete solar projects when it suits the company. While there is a four-hundred-megawatt cap, there is no floor, meaning that if Duke wanted to, it could underbid small, independent companies and move forward with solar if and when it decided to.

"There are many disappointing segments to this bill," says Chris Carmody, executive director of the N.C. Clean Energy Business Alliance. "One especially disappointing element is the fact that they are not supporting a new green source rider. This is something that should be a no-brainer."

Duke's Green Source Rider program allows large private-sector customers, like Amazon and Google, to contract with their utility company for three to fifteen years for the purchase of renewable-generated power at a standard rate. (In 2015, Google became the first company to benefit from this program, when it announced the construction of a sixty-one-megawatt solar project in Rutherford County.) Similar partnerships with Fortune 500 companies could attract more of them to North Carolina, spurring economic development.

But critics suggest HB 909 would instead boost Duke's economic development at the expense of renewable-energy customers. While solar is the cheapest form of energy after installation, the installation itself is expensive.

So what does Duke hope to accomplish with HB 909? The company did not respond to the INDY's requests for comment. But opponents claim Duke is simply out to limit financing options for home and business owners who want to invest in projects such as rooftop solar, a cost-effective, environmentally responsible alternative to fossil fuels.

"Duke is saying it doesn't like the number of projects," Carmody says. "That's largely because they would prefer to invest in things that are more expensive, because they make more money on expensive power resources like natural gas and nuclear."

In September, months prior to the bill's April 25 introduction, a group of stakeholders comprising utilities, solar developers, and consumer advocates began to convene on a biweekly basis to develop an energy proposal that would be considered in the legislature this year. But in February, Duke removed itself from the negotiations, Carmody says, leaving the others wondering why the company participated in the first place.

Then HB 909 emerged, sponsored by more than a dozen state representatives who have received a total of $68,500 in campaign contributions from Duke: primary sponsors Dean Arp, R-Union, and John Bell, R-Craven, Greene, Lenoir, Wayne, received their single biggest contributions from Duke: $13,200 and $10,200, respectively; the other primary sponsor, Jimmy Dixon, R-Duplin, Wayne, received $4,000.

The move, a seemingly abrupt reversal, prompted Ivan Urlaub, executive director of the N.C. Sustainable Energy Association, to release a statement labeling the legislation something that "does not represent a consensus among stakeholders, and in fact, moves many of our recent discussions in a very negative direction."

The impasse remains. As recently as April 25, dueling op-eds were published in the Charlotte Business Journal, with Duke Energy's North Carolina president, David Fountain, and Sean Gallagher, the vice president of state affairs for the Solar Energy Industries Association, offering far different takes on HB 909. Fountain argued that his company was being forced into long-term contracts that unfairly taxed Duke for energy it could create at a far cheaper rate than the standard required under PURPA.

He also argued that Duke is committed to the solar power industry but warned that "continued growth at this level—at higher costs and in this haphazard manner—is not sustainable."

Gallagher shot back, accusing the industry powerhouse of trying to impede solar growth.

"Duke is asking the state N.C. Utilities Commission to change contract terms that will make it harder to build solar energy projects," he argued. "In effect, it wants to be able to decide when it must buy renewable energy—even though the rules are well-established and have been on the books since the 1970s. Increasing renewables will save Duke Energy customers billions."

What will happen remains to be seen. HB 909 did not earn approval in either legislative chamber before the end of the crossover period on April 27; since it's not a budget bill, that should render it dead for the rest of the session, but the powerful utility's critics aren't sure that's the case.

However it plays out, Duke's tactics have left its critics believing that company's ultimate goal is to tighten its control over an unbeatable alternative to fossil fuels.

This article appeared in print with the headline "Block Out the Sun ."

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