April 26, 2015

Bill Would Cut Short NC’s Green-Energy Law

The green-energy mandate that has helped make North Carolina the fourth-largest solar state would be cut short under a bill filed this week by state House leaders.

The Renewable Energy and Energy Efficiency Portfolio Standard, called REPS, was the first in the Southeast when lawmakers adopted it in 2007.

The law says utilities have to generate increasing amounts of energy from the sun, wind and organic wastes, or from energy efficiency. It set an ultimate green-energy target of 12.5 percent of retail sales by 2021.

A bill sponsored by two chairs of the House Public Utilities committee and Majority Leader Mike Hager cuts that target by half. It makes the final target 6 percent, this year’s benchmark, and ends the mandate in 2018.

One of the primary sponsors, Pender County Republican Chris Millis, calls the standard a transfer of wealth to renewable-energy developers.

Utilities are allowed to charge their customers for complying with the mandate. Residential customers of Duke Energy Carolinas, which serves Charlotte, pay 39 cents a month.

The bill “simply refocuses our state back to the principles of providing reliable power at least cost while considering all methods of energy production,” Millis said by email. “The bill puts renewable and non-renewable energy-producing sources at equal stake and allows our ratepayers to benefit from the mode of production at the lowest responsible cost.”

The bill’s prospects aren’t clear. Similar legislation in 2013 never left committee.

As solar farms rise statewide, developers, installers and suppliers are creating jobs. Support is growing, even among conservative lawmakers, to extend state renewable-energy tax credits due to expire at the end of the year.

The North Carolina Sustainable Energy Association says more than $2.6 billion has been invested in green-energy projects since 2008, with three-quarters of that in rural counties.

The association said the bill signals uncertainty to green-energy investors.

The measure “dramatically disrupts the investment and jobs created that we’ve seen as a result” of the standards, said governmental affairs director Betsy McCorkle. “This bill just sends shock waves to those communities and makes those investors think twice about investing in North Carolina.”

Duke Energy says its focus has been on complying with the mandate. Duke says its expects to use energy efficiency programs and hydroelectric, biomass, wind and solar energy to meet its targets.

Other solar-related issues have also emerged in Raleigh this year, including a Republican-led bill allowing companies other than utilities to sell electricity directly to customers. Duke says those issues should be treated comprehensively instead of individually.

“From our standpoint, it would be better to examine the issues around solar holistically through a collaborative stakeholder process” such as the one that created the green-energy standard, said spokesman Jeff Brooks.

In addition to capping REPS targets at their current levels, the bill lets utilities attain half of that target through energy efficiency measures, up from the 25 percent now allowed.

Another provision alters how green-energy developers are paid by utilities for their electricity, an issue the state Utilities Commission had addressed in December.

The provision would limit renewable energy projects eligible for standard contracts at 100 kilowatts, a level Duke has advocated but that is far smaller than the 5 megawatt limit the Utilities Commission allows.

The bill also calls for a study of distributed generation, such as rooftop solar panels, including the utility purchases of surplus energy called net metering. Duke has said current policies let home solar owners avoid paying their fair share of utility operating costs.

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