In 1st public debate, lawmakers question energy bill’s impact on climate and customers
The impact of a sweeping piece of proposed energy legislation on North Carolina consumers’ wallets is still unclear even after a legislative committee held its first discussion about the bill.
Rep. John Szoka, a Fayetteville Republican and one of the bill’s primary authors, told the House Energy Committee that the N.C. Utilities Commission’s Public Staff could finish its review of House Bill 951 as soon as next Tuesday. The bill would mandate Duke Energy to retire most of its coal plants in North Carolina by 2030 and allow the utilty to pursue multi-year rate plans.
“You can’t have everything. So for us to achieve the overall goals of what we want to reduce carbon, to increase renewables, there may be a slight increase in cost,” said Szoka, who added a review of a previous draft did show a small increase in rates.
Duke Energy and House Republicans say the legislation would lead to a 61% reduction in carbon emissions and diversify the state’s energy sources. But environmental groups and House Democrats have widely criticized the bill, focusing on provisions that mandate using natural gas to replace coal-fired plants at one, and potentially two, power stations. Critics have also said the legislation undermines the N.C. Utilities Commission’s independent decision making.
Gov. Roy Cooper released his first statement on the legislation Thursday, saying, “The House Republican energy legislation revealed for the first time this week would cost ratepayers too much, fall short of clean energy goals, hamper job recruitment and weaken the Utilities Commission which exists to provide accountability for utility companies.”
Cooper said the bill doesn’t provide enough renewable energy and called for legislators to start negotiations again and involve more groups in discussions.
Rep. Dean Arp, a Republican from Union County who is one of the bill’s primary sponsors, said the legislation gives the Utilities Commission wide latitude to describe how several of the coal plants will be replaced, namely mandating that they are retired early so long as doing so would not jeopardize the state’s energy reliability.
“The Commission is not a policy body. It is a (regulator) of the policies that we, as representatives of the people, set,” Arp said.
Power sector’s impact on climate
Thursday’s hearing marked the first time House Bill 951 was debated publicly. The bill was shaped by a small group of stakeholders who have been meeting since January.
Part of Thursday’s discussion revolved around whether the bill adequately addresses North Carolina’s efforts to lessen the impacts of climate change. The power sector generated 35.1% of the state’s greenhouse gas emissions in 2017, the last year for which data is available.
If the bill passes, the only coal plants remaining in North Carolina would be Duke Energy’s Belews Creek site and one operating at the company’s Cliffside station in the western part of the state. Duke representatives said those plants already partially run on natural gas and will eventually fully transition.
Szoka said the bill would create more than 5,500 megawatts of new solar energy. That would be enough to power 750,000 to 1 million homes, according to Alex Miller, a lobbyist representing the Carolinas Clean Energy Business Association.
“The whole concept of what we’re doing here is accelerating retirement of heavy carbon producing facilities to reduce the carbon footprint of North Carolina,” Arp said.
The decrease in power sector emissions included in the bill would fall short of the targeted 70% reduction from 2005 levels set by North Carolina’s Clean Energy Plan. Both Duke Energy and North Carolina are targeting net zero by 2050.
Rep. Becky Carney, a Democrat from Charlotte, said, “I hope as this bill moves forward, to get buy-in from a lot more people, that we move closer to that 70% if there’s still wiggle room in there.”
In response, Szoka said that those negotiating the bill had to consider not just renewable energy, but also cost and the certainty offered by natural gas generation.
“Whether it’s 61 or 70%,” Szoka said, “the fact is we’re moving in the right direction.”
Time for an ‘informed decision’
During Thursday’s hearing, Szoka defended the process that shaped the bill, saying it considered nearly a year’s worth of talks around a report on North Carolina’s utility regulations and how companies purchase energy sources.
“I’m not saying that this bill is perfect but I would certainly say in my belief everyone’s viewpoints were included in this process even if they weren’t physically in the room when we were working on legislative language,” Szoka said.
Still, legislators from both parties urged Szoka and other bill writers to move the often-technical piece of legislation slowly. Szoka said he does not intend to “ram” the legislation through.
“This bill obviously has consequences. I’m not sure what those consequences are,” said Rep. Charles Graham, a Democrat from Lumberton.
Among the groups raising concerns about the potential price tag of the bill are 31 textile companies based in North Carolina. The companies sent a letter to lawmakers raising the alarm about how any cost increases would affect their energy-intensive business. Under the multi-year rate plan laid out in the bill, Duke could request increases of as much as 4% per year over a three-year period, with small increases or deductions based on performance incentives agreed to by the Utilities Commission.
Executives from Parkdale Mills, a yarn manufacturer in Gastonia, said rising energy costs have led them to make capital investments outside of North Carolina, a process rate increases would likely accelerate.
“If this bill is passed, this is going to kill current investments in this state that are going to lose their competitiveness and it will certainly kill future investment in North Carolina, so that’s a job killer and we don’t need job killers,” Dan Nation, Parkdale’s director of government affairs, told The News & Observer. Parkdale also opposed Duke’s 2019 multi-year rate effort.
Duke Energy representatives maintained Thursday that the plan was shaped by compromise and would allow the N.C. Utilities Commission to continue regulating the utility.
Kendal Bowman, Duke Energy’s vice president of regulatory affairs and policy, said, “Multi-year rate plans, revenue decoupling and performance incentive measures are bundled to hold the utility accountable for investments that support the policy of North Carolina as we help facilitate the energy transition at the right pace.”
This story was produced with financial support from 1Earth Fund, in partnership with Journalism Funding Partners, as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.
This story was originally published June 18, 2021 at 5:30 AM.