ALERT: This bill was rolled out in committee on Tuesday morning, passed in less than 45 minutes, passed another committee and is due on the House floor Wednesday. As the saying goes, “The skids have been greased” for this bill.
North Carolina House Bill 589, Competitive Energy Solutions for NC, is anything but competitive or a solution. It is a lobbyists’ dream bill with something for everyone – right down to a set aside for environmental non-profit NCGREENPOWER. The bill, while purportedly being about “renewables,” is almost 100 percent dedicated to promoting solar power. A search of the bill turns up no mention of wind and only a brief mention of swine and poultry waste energy generation: not much in the way of renewables except for solar.
Rather than bore you with trivial information about “rate making” and “avoided costs,” I am going to just give you the big reasons this bill should be shelved. If any action is to be taken, it should be turned into a study committee bill for the 2018 short session and given the proper time for full debate and consideration.
HB 589 is a massive step and could negatively impact NC utility customers for years to come. Duke Energy has already filed for a rate increase this year that would cause residential customer rates to go up 16.7 percent. There is also talk the company will ask for another double-digit increase next year.
Also troubling is an entirely new program, the Solar Rebate Program on page 17 of the bill. This program is very similar to the expired tax credits NC was offering, except in this case instead of the taxpayer paying for them, it will be utility customers paying through their electric bills. It is not unlike the Affordable Care Act method of charging some insurance customers more to offer subsidies to other insurance customers. In this case, residents who are not installing solar are subsidizing those who are installing solar. This will be in addition to the continued impact of the REP charges.
In 2016 Duke, per a recent filing with the North Carolina Utility Commission (NCUC), had 20 days during which the company had more power available on the Duke Progress system than it could use. This power was sold at a loss to another system. This means customers of Duke Progress (the eastern half of the state, where most of the solar is located) subsidized other customers. Duke also stated that solar requirements have cost customers over a billion dollars extra. Can we afford more solar?
Again, we need our legislators to either kill this bill or take prudent and reasonable action and turn it into a study bill and make sure we get the legislation right. I will leave you with two more data points to consider when pondering North Carolinas energy future.
- North Carolina has repeatedly failed to land a large manufacturing facility in recent years. Could this be because we have utility rates that are rising and the renewable mandate in the Southeast? None of our neighboring states have this. South Carolina recently landed a Volvo manufacturing plant by giving the manufacturer a reduced rate on electricity.
- Consider the below map showing solar development in the United States. While NC is not in the top ten of “potential” solar power, we are the number two in installed solar. Remember, every installed solar-generating facility must have a backup generating facility, usually fossil fueled. Because the backup facility is not run at optimum efficiency, due to varying solar facility output, it usually puts out more pollution than another facility operating continuously.
Alternative Energy doesn’t need to be pumped up with State or Federal taxpayer funding. If a company like Amazon, for example, needs extra energy, it can finance the infrastructure itself. (Apparently, the energy won’t even go to them directly.) State and federal governments don’t need to be in the subsidiary business, as special interests benefit the most. Energy users will pick up the bill just like taxpayers do with special interest projects now. It doesn’t matter that there are no real customers, just as long as tax incentives are available in the short term.
No on this Bill. Let companies like Amazon pay for their own needs. Turn it into a study bill and hold town hall meetings in cities including smaller ones like Cary, Holly Springs not just Raleigh or Charlotte.
Remember what Amazon does – it pays for power when it is generated at a wind farm. The power does not actually power Amazon, it displaces other generation during the time the wind blows. The utility companies must take the power by law – in other words, the utility companies cannot curtail the wind farm – instead the company must curtail other generation – typically fossil fuel. Because the wind farm output is variable, the utility company cannot shut the fossil unit down, but must operate it in an inefficient, transient manner it was not designed to operate in.
When the wind does blow, Amazon does not pay for the fossil generators’ mortgages. When the wind does not blow, Amazon again benefits from the grid that we all help to pay for.
So because of government mandating the acceptance of any power generated by a solar panel or a wind farm, less money will go to the traditional units (they will operate less and in a manner that will increase operation and maintenance costs). Ultimately, and this is already happening in NC/SC, nuclear plants (which represents the cheapest power in existence after the unit is paid for) will be shut down not because of their costs (since the older ones are paid for) but because they are not able to fluctuate their output very well.
So, as solar penetration increases, the poor will be asked to pay more for electricity, and pollution will inch up as fossil units are operated less efficiently and nuclear units are shut down.