Look twice at energy mandate
Published August 21, 2015
By Becki Gray
by Becki Gray, John Locke Foundation and NC SPIN panelist, published in Fayetteville Observer, August 20, 2015.
While the General Assembly continues to battle through budget negotiations, there is one outstanding issue this session that affects every North Carolina resident, every business, every consumer and every taxpayer. No one's talking about it, and decision makers seem willing to skip over it this year. But perhaps no single issue affects the state's economy and impacts every household as much. The issue? The cost of electricity.
The cost of electricity affects everything - residential customers trying to stay cool this summer, businesses increasing prices as they have to pay more to keep the lights on, consumers paying more as those costs are passed along for everything from a head of lettuce to back-to-school supplies. As taxpayers, all of these groups help pay the electric bill for every government office, school and courtroom.
A bill approved in 2007 requiring North Carolinians to get a percentage of our electricity from more expensive and unreliable energy sources has driven up electricity costs by $276million through 2014. Electricity prices are 38percent higher in states with mandates like the one approved here in 2007. High electricity costs kill jobs, cripple the economy and hit low-income families particularly hard. Unless the legislature acts, the mandate will increase from the current rate of 6percent to 12.5 percent, and the costs associated with it will quadruple.
Slow it down
No one is talking today about eliminating the costly mandate for renewable energy. Instead the provision the General Assembly is considering just freezes things where they are today. It doesn't repeal anything. It doesn't sunset any regulations.
It freezes the renewable energy standard requiring that 6 percent of our energy must come from renewable energy sources, rather than increasing to 12.5 percent by 2021. It caps the annual rider the power company can charge its customers for the additional cost in providing renewable energy at $12 for residential customers, $150 for commercial accounts and $1,000 for industrial accounts.
It increases from 25percent to 50 percent the savings through energy-efficiency measures the public utility can use to comply with the mandate. It holds harmless any electric power supplier already under contract to provide services designed to comply with existing mandates.
The proposal amends standard contracts for small energy producers. And it requires a study of how to reform or perhaps repeal altogether the costly mandate. The study would lead to a good, hard look at long-tern energy needs.
No repeal. No rugs ripped out from anyone. No major changes in renewable energy policy. Just a freeze, a time to chill out, to take another look at a renewable mandate that may or may not be working. Re-evaluate why North Carolina is the only state in the Southeast to impose this costly mandate.
These provisions are found in House Bill 332, which focuses on energy policy laws, and H.B. 760, the House's version of the General Assembly's annual regulatory reform legislation. The first bill cleared the House overwhelmingly, 108-4, while the second passed with a comfortable 77-32 margin.
Both of these bills sit in the Senate, awaiting action. These provisions also could be added to H.B. 765, another regulatory reform measure that has passed through both the House and Senate in different forms. That bill could undergo negotiation through a legislative conference committee. There are plenty of mechanisms to freeze the renewable energy mandate this session.
The cost of electricity affects the cost of everything else in our lives. Now is certainly a good time to step back and take a critical look at a measure that raises electricity costs. Nothing drastic. No repeal. Just a break - to review, regroup and recharge. There's time to act, and the time is now.
August 21, 2015 at 8:08 am
Frank Burns says:
Agreed. In addition the state of NC should fight Obama's new EPA rules which will drive up the price of electricity for no good reason. The EPA head admits that this law would have no impact on reducing global warming. I've tried to tell the EPA head myself that the global warming pause continues for over 18 years now.
