Conservatives have grumbled about the state energy law that mandates renewables and efficiency programs ever since it was passed in 2007 with Democrats in control.
This year, with a solid majority in the legislature and an ally in the governor’s mansion, Republicans hope to roll back the state’s green energy policy.
It’s part of a broader effort to reshape the state’s energy landscape to reflect conservative priorities. It will likely dovetail with Republican Gov. Pat McCrory’s campaign endorsement of offshore drilling and inland fracking for shale gas as a means of promoting energy independence.
McCrory is eager to work with neighboring states on offshore drilling, which is overseen by the federal government. If drilling rigs were to be built in the Atlantic Ocean, one item yet to be resolved would be North Carolina’s potential revenue sharing with the feds for any offshore waters leased for energy development.
McCrory has broken ranks with his fellow Republicans on at least one key point, however: He has embraced offshore wind farm development, saying it will boost North Carolina industries that make components for wind power. His embrace of wind power conflicts with lawmakers who want to drop the state requirement for renewables, such as solar and wind.
In the legislature, Republicans have plotted for several years to freeze the requirements that obligate Duke Energy and its subsidiary, Progress Energy, to use energy alternatives to meet customer demand. These include solar, wind and landfill methane gas, as well as paying financial incentives to customers who buy energy-efficient appliances. The law also applies to rural electric cooperatives and municipal power agencies.
It allows power companies to pay a premium to meet the state targets and to pass on those program expenses to customers. However, the law also caps the amount utilities can charge residential customers for the extra costs. The limit is $1 a month this year and increases to $2.83 a month in 2015 and thereafter.
Leading the repeal effort is Rep. Mike Hager, who chairs the House Public Utilities Committee and is a 17-year veteran of Duke Energy. Hager is hopeful his efforts will gain traction with the election of McCrory, himself a 29-year veteran of Duke Energy.
“My goal is not to subsidize industry in North Carolina as best as we can,” Hager said.
Hager and other critics say clean energy laws raise electricity rates by forcing power companies to buy more expensive forms of electricity. Those charges are disputed by advocates who say alternative energy is not only better for the environment, but a financially preferable option to building multibillion-dollar nuclear plants.
Electric utilities had to supply 3 percent of their retail sales from renewables and efficiency programs as of 2012, and Hager wants to freeze the mandate at that level. As currently written, the law will require Duke and Progress to supply 12.5 percent of retail power sales with renewables and efficiency programs.
Past efforts to repeal the law have stalled, largely because the utility companies have resisted tinkering with the policy.
Electric utilities had signed onto the original law and publicly remain neutral about proposed changes. Their main concern is to be able to charge customers to recover their costs for long-term solar contracts and other projects they have already committed to.