Burning the midnight kilowatts
Published July 22, 2021
By Tom Campbell
“There’s nothing good going on after midnight that you need to be part of,” my momma repeatedly told me. She was right. Our legislators would do well to heed that advice. No legislation passed after midnight is good for most of our state. Exhibit A is House Bill 951, passed by a 7-vote margin at 12:01 a.m.
Why the dark of night shenanigans? Why did this bill require negotiation behind closed doors? Why do we even need HB 951? No wonder a legion of groups lined up to oppose the bill; some are normal antagonists with each other.
Nobody has yet made the case why we need HB 951. It circumvents the regulatory rate authority of the North Carolina Public Utilities Commission. Instead of Duke coming to the Commission to ask for a rate increase every year, HB 951 would allow them to set their rates three years at a time. A similar measure was defeated last year. Why try to cram it through again? Ok, there is too long a time lag between the date rate hikes are requested and a decision is reached - typically 270 days. A better use of everyone’s time would be to consider how to shorten that timeline while ensuring adequate public protections.
Chief among the opponents to this measure are environmentalists and manufacturers. Our state is still in recovery from the pandemic and companies that are high electric users, such as textile manufacturers, pharmaceutical companies and others worry about rate increases projected to be as much as 50 percent over the next ten years as a result of this bill. Some are threatening to scale down operations or move out of state. Environmentalists complain the provisions would reduce carbon emissions by 61 percent instead of the 70 percent Governor Cooper wants.
There are some good points. HB 951 aids the conversion of coal-fired power generation plants to natural gas, a step in the right direction. It also provides $50 million to explore building a modular nuclear reactor. We will never provide for our total electric needs through renewable energy and the best, most efficient alternative with the least pollution is nuclear, however it is expensive to build and has a waste disposal problem. Modular reactors are worth considering.
Governor Cooper will veto any bill that resembles HB 951. Based on their midnight vote the House doesn’t have enough votes to override that veto. Lawmakers know this, so why don’t they do the right thing and involve the public, interest groups and, most certainly Duke Energy, to negotiate a reasonable energy bill. That’s what good leaders do.
Here’s my spin. Duke is a well-run company, the ninth largest public utility in the nation. Last year the company earned $1.1 billion in net profits, serving 78 million customers in six states. Execs are well compensated, electricity is reasonably priced and shareholders well rewarded. Last year Duke paid shareholders a 3.9 percent dividend on stock that hovers between $100-105 per share. Duke has operated well under the current regulatory environment and will continue to do so.
The North Carolina Public Utilities Commission has a stellar record also. Their task is to make sure customers are protected and charged fairly, while also ensuring our regulated monopolies can earn a reasonable profit - up to a 9.9 percent return on their invested capital.
North Carolina has been well served by our system of regulated monopolies. Let’s stop the midnight games and give power to the people, while also protecting our valuable public utilities.