A radically altered — and largely anti-renewable energy —
version of a bill to reform the state’s solar regulations passed the N.C.
Senate Wednesday night. But the House refused to go along, and the bill is
headed to a conference committee to work out the differences.
One of the biggest differences in the bill is a four-year
moratorium on new permits for wind power projects in the state, introduced by a
small group of senators during deliberations in the Senate Finance Committee.
But the bill also introduced other provisions weakening the market reforms proposed for
renewable energy regulation and cutting back on a commitment for new
solar construction.
Sen. Harry
Brown (R-Onslow) championed the wind moratorium, contending that
developing wind projects in eastern North Carolina could threaten the future of
the Seymour Johnson Air Force Base and the Cherry Point Marine Air Base. He
inserted language from a moratorium bill he had drafted earlier in the session
that had failed to move forward.
Senate debate
Opponents of the amendments argued that the military had
repeatedly expressed support for wind development, saying that, done properly,
it did not conflict with the mission of its air divisions. WRAL-TV reports that
during the Senate floor debate, Sen. Erica
Smith-Ingram (D-Northampton) pointed out that the Department of Defense had approved plans
for two wind projects in her district that the moratorium would block.
“[That’s] $1 billion of impact that is lost with this wind
moratorium,” the television station quotes her as saying. “To have this
financial impact in my district is absolutely unconscionable.”
She contended that the military had no objections to
properly reviewed wind development. But supporters of the moratorium said it
was not worth risking potential conflicts in the future.
The amended bill passed the Senate 33-12 in a marathon
session Wednesday evening. The House voted 114-2 against concurring with the
Senate version later Wednesday night.
“Somehow the solar bill became the wind bill,” one supporter
lamented privately.
House conferees
Rep. John
Szoka (R-Cumberland), one of the original bill’s sponsors, has said he will fight to get the original provisions in the bill restored.
Szoka, co-sponsor Rep. Dean Arp (R-Union) and Rep. Dean Lewis (R-Harnett) were
appointed as the House conferees.
The Senate has not yet appointed its representatives for the
conference.
Duke Energy (NYSE:DUK), representatives of the solar
industry, renewable energy advocates, business representatives and others
worked through 10 months of often difficult negotiations to propose a bill
acceptable to all sides. That bill sailed through the House June 7, passing
108-11 on its third reading.
Compromise deal
The compromise legislation called the “Competitive Energy
Solutions for NC” act was intended to encourage free markets in solar and other
renewables in the state.
It would largely replace the current regulatory regime for
building solar in North Carolina with a competitive-bidding process that Duke
and bill proponents hoped would bring some order to new solar construction. To
balance the concerns of renewable energy advocates and the solar industry, it
required Duke to seek construction of 2,660 megawatts worth of new renewable
projects over the 45 months following passage of the bill.
After that, the bidding system was slated to continue. The
N.C. Utilities Commission was mandated to set future construction goals to
encourage solar and other renewables while balancing those against the goal of
reliable and affordable energy in the state.
Upended legislation
There were a number of provisions for other renewable energy
advocates and Duke. But the bidding system and the large mandate for new solar
construction were at the heart of the compromise worked out in the House.
The Senate unexpectedly upended that compromise. A
half-dozen senators, led by Brown, inserted the wind provisions, changed the
bidding process so that it ends in 2021 and reduced the solar commitment to
2,200 megawatts.
Szoka said after it was clear that the amended bill would go
to the Senate floor that the only hope of restoring the balance struck by the
original compromise would come in the conference committee set up to work out
the differences between the two chambers.
But there is not much time. The General Assembly is expected
to wrap up its business by early next week at the latest.
Supporters object
All the groups involved in the original compromise have
withdrawn their support for the bill following the Senate changes. But it is
not clear where things go from here or whether they might support some new
compromise.
Wind power was not part of the original House bill at all.
The groups involved in working out the compromise decided it was not an issue
they wanted to address in the legislation.
Duke spokesman Randy Wheeless says the Charlotte-based power
company still supports the House version of the bill, and would like to see
that adopted. Duke has no clear position on the wind moratorium, however.
"We are a little ambivalent on that," he says.
"It has not been a big issue for us in North Carolina."
Duke has 20 wind farms across the country in its commercial
renewables division, none of them are in North Carolina.
PURPA rules
Wheeless says Duke still sees some good things in the
legislation, even as amended, but "we prefer the language in the House
bill."
For Duke, the key to the legislation has always been that it
significantly reduced the role of the federal Public Utility Regulatory Policy
Act (PURPA) in driving solar development in North Carolina.
The federal law, adopted in 1978 to foster competition for
renewable energy development, allows states to adopt their own regulations
governing how that law will be enforced. North Carolina's rules are among the
most favorable in the nation to renewable developers. Projects as large as five
megawatts qualify for standard 15-year power-purchase contracts from utilities,
for instance.
That has led to a lot of utility-scale solar construction in
North Carolina, which now ranks behind only California for solar on its state
power grid. But Duke has complained in recent years that the growth has been
uncontrolled, threatens the reliability of power service in some areas and
results in the utility and its customers being locked into long-term contracts
for solar at too high a price.
Renewable losses
The solar industry has disputed those claims. But it
ultimately agreed to provisions in the bill that significantly reduce the size
of projects that qualify for standard contracts and cuts the mandated length of
power-purchase contracts to 10 years, eliminating utility-scale solar from
PURPA coverage.
In exchange, they had a say in designing a robust
competitive-bidding system with a commitment to building large amount of solar
in the Carolinas.
For Duke, however, the key has always been cutting back the
state's PURPA market. And the Senate version of the bill leaves that intact,
while weakening almost all of the concessions won by renewable advocates.
And some commitment for solar construction remains, though
at reduced levels and for just a few years.
"We still see some positive things in the legislation,
although our preference is for the House version," Wheless says. "We
hope we don't lose all of that in this dispute."
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