Category Archives: Renewable Energy

May Day at the General Assembly: Environmental Bills

May Day: An ancient celebration of spring.  “Mayday” : an international distress call. 

There will be lots of activity on significant environmental legislation today at the N.C. General Assembly:

Renewable Energy.  Rep. Mike Hager will attempt to revive House Bill 298 repealing the state’s renewable energy portfolio standard (REPS). Earlier posts on the REPS bill can be found here and here. The bill will be back in the House Public Utilities and Energy Committee at noon. A  motion to approve the bill failed in the same committee last week by a 5-vote margin, but the committee never voted to disapprove the bill.  A  story by John Murawski in today’s Raleigh  News and Observer suggests little change in the lineup for and against the bill. Conservative political organizations (including Americans for Prosperity) and anti-tax crusader Grover Norquist continue to push for repeal of the renewable energy standard as part of a national political strategy that has little to do with the costs and benefits of  repeal  in  North Carolina. Some key House lawmakers  still  oppose the bill because the renewable energy standard has brought new private investment and jobs to the state. A Senate version of the  REPS repeal bill  (Senate Bill 365) will get a first hearing in the Senate Finance Committee today. Rarely does an issue so clearly require a legislator to choose between the state’s interest and a position being promoted  by national political organizations.

Regulatory Reform. Senate Bill 612 (Regulatory Reform Act of 2013) will be up for a floor vote in the Senate this afternoon.  See an earlier post on bill language essentially repealing Neuse and Tar Pamlico River buffer requirements and a  more recent  post about  a provision requiring  environmental agencies to repeal state rules that are more stringent than federal regulations on the same subject. (Putting those two proposals in the same bill is interesting all by itself since the Neuse and Tar Pamlico buffer rules are critical parts of  federally required and federally approved state plans to reduce nutrient pollution in the two river systems. It appears that even a federal requirement may not be enough to save environmental rules in some cases.)

The idea  that  state environmental rules  can simply track federal regulations  really misreads  federal environmental law. Senate Bill 612  assumes that federal agencies have adopted environmental regulations that can be simply picked up and applied by the state and that isn’t the case. Federal regulations alone would not, in most cases, be enough to make for a functioning   environmental permitting program  — or one that actually responds to the state’s needs.   All federal environmental laws  assume — and in many cases require —  that individual states will tailor the  federal  program to  address conditions in the state. (Since you won’t find estuaries in Arizona, that state’s Clean Water Act program does not look like  North Carolina’s program.)  This misunderstanding of the relationship between federal law and state environmental  rules means the most likely outcome of the Senate Bill 612 repeal requirement  will be conflict and confusion. It is unclear why the Senate chose to use a sledge-hammer rather than focus regulatory reform efforts on issues actually raised by citizens in comments to the Joint Committee on Regulatory Reform or through the rule review process  created  in G.S. 150B-19.2.

Water System Management.  House Bill 488 (transferring the Asheville water system to the Buncombe County Metropolitan Sewer District)  has come out of a conference committee to resolve differences between House and Senate versions of the bill. See an earlier post for background on the Asheville controversy.   The Senate has approved the conference report; the conference report does not appear on today’s House calendar yet, but could be added. Note: The Buncombe County MSD  had a major sewer spill yesterday;  the details (such as cause and the total amount of raw sewage spilled to the French Broad River)  are not yet clear. The spill caused me to look at House Bill 488 again and it turns out that the bill does not condition transfer of the Asheville water system on the MSD’s compliance with environmental standards or on actual transfer of the water system’s operating permit to the MSD.

Renewable Energy Repeal Fails Committee Vote

April 25, 2013

House Bill 298, the bill to repeal the state’s renewable energy portfolio standard (REPS), failed to win approval in the House Public Utilities and Energy Committee yesterday. (See an earlier post for  background on North Carolina’s  renewable energy standard and House Bill 298.)

Although the bill had the backing of conservative political organizations,   the Republican-controlled House of Representatives never seemed particularly enthusiastic.  The bill won approval of the House Commerce and Job Creation Committee two weeks ago by only a one vote margin even after the bill sponsor  revised the bill  to  wind  the REPS program down more slowly.

When the bill reached the Public Utilities and Energy Committee, it  had been modified again to push complete repeal of the renewable energy standard out three more years –from 2018  to 2021. A friendly amendment in committee made two additional changes to soften the  impact of repeal on renewable energy companies that  invested in North Carolina in reliance on the REPS requirement.  The amendment  removed language allowing electric utilities to use power generated by large hydroelectric projects  to meet the REPS standard (returning to language in 2007 legislation creating the  REPS requirement). The change was made to prevent large existing hydropower plants operated by Duke Energy and Progress Energy  from crowding out new renewable energy sources even before the REPS repeal date. The amendment also  extended the time allowed for  electric utilities to recover costs associated with  renewable energy contracts. Americans for Prosperity again spoke in support of the bill and  submitted a letter of support signed by  a number of other conservative political organizations.

In spite of those efforts, the motion to approve the bill failed by a vote of 13-18 in a committee dominated by Republican legislators.  Republicans voting against the bill included members of the House  leadership —  Republican Conference Chair Ruth Samuelson and  Rules Committee Chair Tim Moore.

The bill failed for a very practical reason — the REPS requirement has brought private investment and jobs to North Carolina at a minimal cost to consumers.  “Riders” on electric bills allow the utilities to recover any additional cost of using renewable energy; the riders have never approached  caps included  in the 2007 REPS legislation. The cost of solar energy in particular has fallen by nearly half as solar companies expanded operations in North Carolina in response to REPS incentives and those costs continue to fall.  (Duke Energy’s residential  customers now pay 21 cents per month to cover the additional cost of  solar energy.  In a rate case filed with the N.C. Utilities Commission  earlier this year, Duke proposes to take the residential  REPS rider to -1 cent. Although Duke Energy has proposed rate increases, those increases are  associated with the cost of conventional energy generation.)

At the same time, private  investment in response to the renewable energy standard brought jobs to the state. See  a 2013 report  by Research Triangle Institute/ LaCapra Associates,   The Economic, Utility Portfolio, and Rate Impact of Clean Energy Development in North Carolina,  for more on the economic impact of the  N.C.  REPS requirement and state renewable energy tax incentives. A  September 2012 clean energy jobs census by the N.C. Sustainable Energy Coalition  identified  over  15,000 jobs associated with clean energy companies.

Conservative political organizations like Americans for Prosperity have made  renewable energy standards a  target for repeal nationwide.  Given extremely low consumer cost and increased private  investment and job creation,  there was little in  the N.C.  REPS experience that could be used  as an argument for repeal.  Supporters of House Bill 298  increasingly had to rely on an ideological argument against energy subsidies in general.  That position has a significant weakness — conventional energy sources  (such as coal, natural gas, and nuclear power) also benefit from subsidies, but conservative  opposition  seems to focus only on subsidies for renewable energy.   Bill supporters  also cited  stories of high cost and renewable energy business failures in other states and countries.

Approving House Bill 298 would have required legislators to ignore  real economic benefits to the state  in favor of an ideological argument against renewable energy subsidies. A majority of committee members chose  reality.

N.C. Renewable Energy Update

April 10, 2013:  A little more detail on the new version of House Bill 298. (For some reason, it took a week for the version  approved  in committee last Wednesday to be posted on the General Assembly website).

Instead of  immediately repealing   the entire   2007 renewable energy portfolio standard (REPS)  requirement, the bill would cap the amount of electric generation  to be met by renewable energy sources at 6%  of 2014  retail sales and sunset the REPS requirement  in 2018. The 2007 legislation (Senate Bill 3) required the electric utilities to generate 6% of 2014 retail sales  using renewable energy sources by 2015 and then increased the REPS goal to 10% of retail sales by 2018 and 12.5% of retail sales from  2021 on. SB 298 cuts the renewable energy goal in half and the 2018 sunset means that  the electric utilities could abandon even the 6% renewable energy target after 2018.

Other changes:

●   The amount of the REPS requirement that could be met with energy efficiency measures would immediately increase from 25% to 50%

●   Existing hydropower facilities could be used to meet the REPS goal. Since both Duke Energy and Progress Energy generate a significant amount of electricity from hydropower facilities, the change may allow existing hydropower to crowd out new renewable energy sources.

● Removes the set-aside for solar energy. (HB 298 repeals a Senate Bill 3 provision requiring the electric utiltiies to supply  at least two-tenths of one percent of the electric power sold to retail customers from 2018 on through a combination of new solar electric facilities and new metered solar thermal energy facilities.) The bill keeps the Senate Bill 3 set-asides for energy generated by swine and poultry waste – although those  set-asides  would sunset in 2018 with the REPS requirement.

● Requires any contract between an electric utility and a renewable energy company to end by December 31, 2018 for purposes of cost-recovery.

Although the bill looks less like immediate repeal of the REPS requirement, the effect would be the same.  New renewable energy sources could be crowded out by existing hydropower and energy efficiency even before the REPS requirement ended in 2018.  Swine and poultry waste would continue to have a set-aside through 2018 — but uncertainty beyond 2018 would make construction of waste-to-energy facilities a very risky business. In the end, the bill would completely undermine the Senate Bill 3 goal of encouraging development of new renewable sources of energy in the state as a source of energy security and job creation.