In the last two weeks, House Bill 760 and its attempts to devastate NC’s clean energy economy have changed multiple times. The attack on the clean energy economy is a solution looking for a problem.
The version of House Bill 760 that passed the House and is now in the Senate freezes North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS) at 6% by eliminating future planned increases to 10% and 12.5%, allows energy efficiency to meet 50% of a utility’s REPS requirement instead of 25%, and decreases the residential cost cap from $34 to $12 per year. NCSEA opposes these changes, and believes that this attack is based on the false premise that renewable energy and energy efficiency hurts ratepayers. A recent study published by RTI International and ScottMadden Consultants shows that the REPS has saved ratepayers $162 million since it was adopted and will save ratepayers an additional $489 million by 2029.
The bill dramatically changes rules for small power producers. With the exception of projects generating energy from swine and poultry waste, qualifying facilities over 100 kW in size will be ineligible for a standard contract. This change nullifies an order made by the Utilities Commission in December 2014 after a year of study. The Utilities Commission concluded that the 5 MW threshold should be maintained because it had resulted in widespread renewable energy development without adverse impacts to ratepayers.
The bill also significantly reduces capacity payments in years where the utilities' long range plans do not call for additional capacity to be built. The result is that qualifying facilities will not be paid the utilities’ full avoided costs, as required by federal law. The Public Staff of the Utilities Commission, charged with representing the interests of consumers before the Utilities Commission, recently found that eliminating capacity payments would be inappropriate given how utilities calculate long-term capacity costs.
Should this bill become law, NCSEA believes it will have a devastating impact on North Carolina’s clean energy economy, resulting in lost jobs and investments and, contrary to the claims of some legislators, these changes will increase ratepayers' bills by preventing future savings from being realized. Utilities are granted a regulated monopoly. Free market competition is not allowed to occur between our energy resources, picking winners and losers based on price and quality. The REPS is closer to a free market policy than traditional regulation because it allows renewable energy and energy efficiency to compete on a more level playing field with the heavily subsidized traditional energy resources like coal and nuclear. This small amount of market competition netted the average ratepayer a savings of approximately $8.71 in 2014 because of the REPS. In the absence of a free market, energy policy must be consistent and enable enough competition to attract investments and jobs, and deliver savings to North Carolina's electric ratepayers.