April 29, 2013

NC House Panel Halts Renewable Energy Law Repeal

House Republicans on Wednesday helped sink a bill pushed by one of their own leaders that would have scaled back and later repealed requirements that North Carolina electric companies generate a set portion of power through efficiencies and alternative sources.

The House Public Utilities Committee, on an 18-13 vote, defeated a motion that would have phased out a landmark 2007 law and end the requirements by 2021.

The current law set no expiration date on the mandate that ultimately directs big electric utilities such as Duke Energy Corp. to generate an amount equal to 12.5 percent of its retail sales from efficiency efforts or renewable sources such as solar, wind and animal waste. Electric cooperatives and city-owned power companies have to reach 10 percent later this decade.

The bill sponsors, led by House Minority Whip Mike Hager, said it was time to remove what they called subsidies for the industries, because utilities can pass along part of the cost of complying with the law to home and industrial customers on their power bills. The bill would have capped the requirement at 10 percent for electric companies and 6 percent for cooperatives before phasing it out.

"If you oppose this bill you support a mandate and subsidy that will virtually last forever," Hager, R-Rutherford, told committee members. "I think we've got a fair bill here that soft-lands the industry."

But several Republicans — including the House Rules Committee chairman and two chief budget-writers — voted against the change, with at least one citing the jobs he said have come to his district because of the renewable energy portfolio standard. Renewable energy companies, environmental groups and large farming operations in the state argued the standard had contributed to creating jobs and encouraging clean energy investments in North Carolina.

Rep. Tim Moore, the rules chairman, said a German-based company that makes mounting systems for solar panels is bringing 300 jobs to his home of Cleveland County.

"I'm pretty well convinced that if it weren't for this program that those companies at least starting out wouldn't be there and it would result in a net loss in jobs in my county," Moore said after the meeting.

A subsidiary of North Carolina-based Prestage Farms, with 1,100 workers in the state, is close to completing plans for a system that converts poultry waste into gas in Bladen County, company spokeswoman Summer Lanier told the committee.

"Prestage would certainly see its large waste energy project halted without the support of (the 2007 law) as it is currently written," Lanier said, adding that the company "already has invested millions to help fulfill the utility companies' needs."

Rep. Jerry Dockham, R-Davidson, who also voted against the repeal, said the legislature should let the current standards take their course and that it would be wrong to change "horses in the middle of the stream right now. "

Several North Carolina and nationally-based conservative-leaning and free-market groups actively pushed for the repeal. A letter signed by 16 organizations and provided to committee members said the requirements in the 2007 law will artificially boost electric bills for consumers because solar and wind-based energy is more expensive to produce.

"It's ridiculous that the General Assembly would ever want to pick winners and losers," said Donald Bryson with the state chapter of Americans for Prosperity.

Elizabeth Ouzts with Environment North Carolina said the renewable standards have cost utility customers so far and ultimately will save consumers money. She praised legislators for turning back the bill, which is technically still alive but would probably need to be overhauled to be revived.

"We're going to try and patch it up," Hager said later Wednesday. He didn't know why he lost but said some lawmakers had been on the fence about the bill entering the meeting. He said it's a philosophically conservative bill that he hopes will sway some "no" votes back around to his side. The bill failed although the repeal date had been pushed from 2018 after it passed in another House committee by just one vote.

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