North Carolina GOP Energy Reform Bill Passes House But Faces Opposition
A Republican-backed energy reform bill that passed the North Carolina House of Representatives early Thursday is facing opposition from the governor, environmentalists and some businesses.
The bill calls for retiring some Duke Energy coal-fired plants and building more gas-fired plants and allows for renewable energy and battery storage. Many of the steps are in line with Duke's own most recent long-range plan. The bill specifies what must happen at five Duke coal plants, listed below.
- Allen Steam Station, Gaston County: Remaining coal-fired units must be retired by Dec. 31, 2023. They must be replaced by battery storage.
- Marshall Steam Station, Lake Norman: Marshall Units 1 and 2 must be retired by Dec. 31, 2026, and, the bill says, must be replaced by a new natural gas electricity generating plant.
- Roxboro plant, Person County: Duke has until Sept. 1, 2024, to file a plan to retire and replace the current coal-fired plant with a new one that can operate continuously, which appears to rule out solar or wind.
- Cliffside Unit 5, Cleveland County: Duke has until Sept. 1, 2027, to file a plan to retire and replace the unit. The replacement must be an energy storage system.
- Mayo Plant, Person County: Duke has until Sept. 1, 2027, to file a plan to retire and replace the unit. The bill mandates energy storage here, too.
Normally decisions about plant closures and construction are a matter for the North Carolina Utilities Commission. But it's not unprecedented for the General Assembly to issue mandates. That's what happened in 2014 when lawmakers mandated the closures of coal ash dumps at four Duke Energy plants.
The bill also would allow regulators to approve multi-year utility rate increases, reducing the frequency of commission proceedings.
Republicans say the bill would help reduce greenhouse gas emissions and keep power affordable.
"It's time to usher North Carolina into the future of energy," Republican state House Speaker Tim Moore said in a statement Thursday. "This bill gives our state a diverse portfolio of energy sources and includes input from a diverse group of energy policy stakeholders who were brought together to confront the challenges facing consumers."
But a spokesman for Democratic Gov. Roy Cooper says the legislation doesn't go far enough to promote clean energy as the state fights climate change and weakens the power of state regulators.
"The House Republican energy legislation as currently written weakens the Utilities Commission’s ability to prevent unfair, higher electricity rates on consumers in the short run," Cooper spokesperson Ford Porter said Wednesday as the bill was nearing approval. "And in the long run, this bill falls short on clean energy, which will create jobs and contain costs. The governor encourages legislators to oppose this bill unless important changes are made to fix these significant problems.”
While Moore alluded to stakeholder meetings, environmental groups complained that Duke helped write the bill through a secretive process led by the House speaker. Brooks Rainey Pearson of the Southern Environmental Law Center said environmental advocates and Democratic lawmakers were shut out.
"It was really frustrating when the speaker convened his own stakeholder group here at the legislature but left out very important voices," Pearson said. "Environmental groups and low- and moderate- income ratepayers were not part of that group. And a lot of legislators were left out who wanted to be part of the conversation."
Dan Crawford of the North Carolina League of Conservation Voters said being invited to join the stakeholder meetings was "like winning the lottery."
"I don't know how you can write or negotiate decadal changes to energy policy without having an environmental stakeholder in the room," Crawford said. "The bill that they came out with has been a sweetheart deal for Duke that would likely allow them to make more money than they already make."
The Republican meetings did include businesses. But textile manufacturers and large utility customers came out against the bill as it was working its way through the House. And then on Wednesday, as Republicans prepared to move the bill forward, a group of 47 major tech and manufacturing companies circulated a letter opposing it.
They complained that the bill improperly undermines the role of state regulators, does not adequately solve the question of how to pay off the remaining costs of coal plants, and puts the burden of potential new nuclear power investments entirely on ratepayers — not on shareholders.
"Since the concerns of our organization and companies have not been addressed, we have no option other than to oppose the bill," the letter said.
The signatories included Google, Pfizer and Smithfield Foods as well as large paper companies, Charlotte-based Nucor Steel and New Belgium Brewing, which has a large presence in Asheville.
Duke Energy did not directly comment on the legislation or the complaints about a secret process.
"It is clear that North Carolina’s clean energy transition is top of mind for policymakers, stakeholders and communities," a Duke Energy spokesperson said in a statement Thursday "As parties continue discussions on HB 951 and find additional compromise, we remain committed to advocating for solutions that support communities and ensure the continued reliability and affordability customers expect."
The bill still needs Senate approval and could face a gubernatorial veto.
UPDATE: The bill also includes a clause that would prevent the Environmental Management Commission from pursuing the rule-making it approved this week.
The commission had endorsed a petition from environmental groups to set limits on greenhouse gas emissions from power plants. It also calls for North Carolina to join the 11-state Regional Greenhouse Gas Initiative. Among other things, the RGGI runs a marketplace for greenhouse gas "allowances" where companies can buy the right to pollute from other companies that pollute less. The bill says:
"Until such time as the General Assembly enacts legislation to authorize the State's participation in RGGI, and implementation of emissions limitations and cap and trade requirements attendant with the RGGI program, the executive branch shall be prohibited from taking such action."