‘Needs to fail’ or ‘orderly’ transition? Competing ideas emerge on NC energy bill.
A N.C. Senate committee listened Tuesday to competing narratives about a bill that would guide North Carolina’s energy future.
Opponents of House Bill 951 told the Senate Agriculture, Energy and Environment Committee that it takes too much power away from the N.C. Utilities Commission and would lead to significant cost increases. Supporters, including Duke Energy, said it provides a framework to keep the state’s energy affordable as the utility transitions away from coal.
House Bill 951 includes provisions that would retire most of Duke Energy’s remaining coal-fired power plants, mandates replacing at least one of them with a natural gas plant, and lets the utility pursue rate increases three years at a time instead of one, with an incentive structure that could lead to some increases or decreases in rates. The legislation, which already passed the House, has been met with widespread opposition among the state’s business and environmental communities.
Cassie Gavin, senior director of government affairs for the N.C. Sierra Club, said the legislation should not include a mandate for any new gas plants.
“A lot of states are setting a goal to go coal-free by a certain date, like 2030 for example, and then leaving it up to the experts like the Utilities Commission to decide the best path forward,” Gavin said.
Nelson Peeler, Duke Energy’s senior vice president of transmission and fuels strategy and policy, told senators that the power giant believes the provisions in House Bill 951 could boost reliability as the company continues to move away from coal-fired plants.
“It’s critical that our energy transition is balanced, orderly and planned with a keen focus on continued reliability,” Peeler said. “There is a science to affordable, reliable power. We need a diverse mix of resources working together.”
If House Bill 951 becomes law, Peeler noted, Duke’s power would come from a mix of renewable sources like wind and solar along with natural gas and nuclear. The bill would also lead to the construction of some battery operated storage.
Other supporters of the bill include the N.C. Chamber and North Carolina’s Electric Co-Operatives. A representative from the American Petroleum Institute spoke about the potential benefits of switching from coal to natural gas, but did not take a stance on the legislation.
But there are many concerns about what the bill would cost both residential customers and companies that buy their power from Duke Energy.
Becki Gray, the senior vice president of the right-leaning John Locke Foundation, said the group opposes the legislation, in part because its cost remains unclear.
Gray also said House Bill 951 “fails to fully account” for the land use associated with wind and solar power. The legislation calls for nearly 5,000 megawatts of new solar.
Natural gas and nuclear power plants, Gray continued, have smaller physical footprints than renewable energy sources.
“With these resources at the core of the grid,” Gray said of nuclear and natural gas, “(we’ll have) reliable electricity with significant carbon reduction at a much lower cost to taxpayers and the natural environment than with the proposal in HB 951.”
On Aug. 5, a group of 10 companies including Google, Nestle and Unilever sent a letter to legislative leaders and Gov. Roy Cooper expressing their opposition to House Bill 951. The companies requested that any energy legislation maintain the regulatory powers of the N.C. Utilities Commission, allow the commission to evaluate whether the construction of new natural gas plants makes sense and prioritize efforts to increase energy efficiency.
Tuesday, manufacturers expressed ongoing concerns about how the legislation could impact their power bills. Among the most vocal opponents were representatives of the textile industry.
Jay Flanary, the director of manufacturing for Sanford-based Frontier Yarns, said energy is a “leading cost” for textile manufacturers and the price of electricity is a key factor in the company’s decisions.
“This bill needs to fail as proposed,” Flanery said, citing specific concerns about how the bill affects the Utilities Commission and its allowance for multi-year rate plans.
There was no vote during Tuesday’s meeting.
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 August 10, 2021 at 3:17 PM.
CORRECTION: An earlier version of this story incorrectly characterized the American Petroleum Institute’s stance on House Bill 951.