Bill Could Be Win-Win For NC | Eastern North Carolina Now

    Publisher's note: This post, by Brian Balfour, was originally published in the Issues section of Civitas's online edition.

    Imagine a piece of state legislation that could both lower your utility bill and make North Carolina more competitive for jobs.

    House Bill 681, the NC Energy Ratepayers Protection Act, does just that.

    In 2008, North Carolina legislators enacted a renewable energy portfolio standard. Simply put, these standards require that a certain percentage of energy provided by NC utilities come from so-called renewable sources. Solar, wind, hydropower and even biomass are considered "renewable" sources of energy under this law.

    This law has forced major energy providers such as Duke Energy to purchase more expensive and inefficient energy sources to pass along to consumers. Also being passed along to consumers is a higher energy bill.

    And higher energy bills not only force residential ratepayers — especially low-income households — to dig deeper to pay their bills, but also impose higher costs on businesses and make North Carolina less competitive for jobs. Business surveys find energy costs to consistently rank highly among a company's decision of where to locate or expand.

    Indeed, a recent study conducted by Strata Policy in conjunction with Utah State University's Institute of Political Economy concluded that North Carolina's renewables mandate has cost the state 24,000 jobs and $14.4 billion in personal income. Higher energy bills on commercial and industrial ratepayers discouraged investment and job creation, resulting in household income being roughly $3,900 lower by 2013 than it would have been absent the mandate.

    Moreover, the study estimated that residential ratepayers have been paying on average a total of $149 million more in utility bills thanks to the renewable portfolio. Such increased energy bills naturally impact low-income households the hardest, as they must spend a larger share of their monthly income on utility bills than do middle- and upper-income households.

    As bad as all that sounds, however, the actual impact of the renewable portfolio is even worse than the study indicates. The 2008 law stipulated that for the first several years, only 3 percent of energy comes from renewable sources. As of 2015, that amount doubles to 6 percent, and is scheduled to increase to 10 percent by 2018 and again to 12.5 percent by 2021.

    Make no mistake, as the portfolio mandates rise, so too will energy bills and job loss.

    The NC Energy Ratepayers Protection Act would remove the mandate on utilities and allow them to provide ratepayers with the least-cost mix of energy available, be they conventional sources or "renewable" sources. Well-heeled special interests such as "Big Solar" will no longer have guaranteed customers for expensive sources of energy, and would have to compete on a cost basis with other energy sources on a level playing field.

    "This bill is focused solely on protecting the ratepayer. This is not a battle of renewable versus nonrenewable," said state Rep. Chris Millis, R-Pender.

    "If members want to mandate and subsidize higher power costs, then that's their prerogative. But I didn't come up here to Raleigh to underwrite a certain industry, and do it on the backs of the citizens I represent," Millis said. "To me it's absolutely egregious."

    The legislation would also honor energy contracts between suppliers and the utilities already in place until 2018, in order to hold harmless parties to such agreements.

    Opinion polling consistently finds that North Carolinians may like the idea of "renewable" energy in theory, but don't want to pay more for it, with nearly two-thirds of respondents to a Civitas poll stating they don't feel ratepayers should be forced to pay more.

    The mandate forcing North Carolina ratepayers to buy more expensive, unreliable sources of energy was a special interest giveaway from the start. North Carolina families and businesses have been paying a steep cost ever since in the form of higher energy bills and thousands of lost jobs.

    House Bill 681, the NC Energy Ratepayers Protection Act, will right this wrong and be a major benefit for all North Carolinians.