Energy bill deal aims to meet Cooper NC gas reduction goals
Legislative leaders and Democratic Gov. Roy Cooper announced Friday agreement on an energy bill that aims to meet Cooper's goals on greenhouse gas reductions and gives dominant utility Duke Energy the ability to seek multiyear rate increases.
The measure, which is expected to clear the Republican-controlled legislature next week, removes most of the prescriptive actions that House Republicans laid out in an earlier version of the bill that passed the chamber in July.
Instead the new bill, largely negotiated between the Cooper administration and senators from both parties, directs the state Utilities Commission to come up with a roadmap by the end of 2022 on how to move toward goals of reducing greenhouse gas emissions that align with Cooper’s Clean Energy Plan.
That plan seeks to reduce carbon dioxide levels from energy producers by 70% compared to 2005 levels by 2030, and achieve zero-net CO2 emissions by 2050. The House plan would have contributed to a 62% reduction in power-sector greenhouse gas emissions by the end of the decade, according to an estimate by the commission's public staff.
The approved House bill had singled out which inefficient coal-fired plants operated by Duke Energy should be shuttered early and replaced with other alternate fuels. It also quantified solar power production expansion levels and told Duke to begin investigating where it could build a new, smaller “modular” nuclear facility. These items aren't in the updated bill.
Cooper and several environmental and manufacturing groups panned the approved House bill, either for relying too much on natural gas, increasing customer rates dramatically or weakening the Utilities Commission's authority.
“This bipartisan agreement sets a clean energy course for North Carolina’s future that is better for the economy, better for the environment, and better for the pocketbooks of everyday North Carolinians,” Cooper said in a joint news release with both Democratic and Republican lawmakers.
A draft of the new legislation directs the commission, which would revisit its roadmap every two years, to consider several factors while taking “all reasonable steps” to meet the percentage targets. The analysis, which requires stakeholder input, must seek the "least cost path" forward and ensure reliable and adequate electricity supplies. It does state that any plan would require 45% of additional solar energy originate from third-party producers, with the remainder coming from Duke Energy.
The agreement "will signal to businesses and families here now or considering a move here that North Carolina’s leaders are committed to pro-growth energy policies,” Senate leader Phil Berger said in the release.
The final draft measure does retain much in the House proposal that would allow Duke Energy to seek rate increases in three-year blocks through the commission, rather than year by year. The Charlotte-based utility was unsuccessful two years ago in getting legislative approval for the multiyear rate idea, which it says can reduce legal costs and provide more predictability. The bills does contain consumer protections and assistance to repay the costs of energy efficiency improvements they make, according to Friday's release.
The commission's public staff had estimated some Duke Energy customers could have seen a roughly 4.5% increase in retail rates by 2030 if the House-approved bill had been enacted. But a group of industrial customers calculated the cost to be several times that percentage increase. There was no information released immediately on how the updated bill could affect ratepayers.
The North Carolina Retail Merchants Association, which had been neutral on the House bill that passed in July, came out in support of the updated bill Friday. Duke Energy praised the efforts of state leaders.
“Legislative leaders on both sides of the aisle recognize the opportunity in front of us to move away from coal and accelerate a clean energy transition for our state,” spokesperson Bill Norton said.
Other groups remain opposed to the measure, saying it would harm low-income families, many of which are still behind on their power bills due to the COVID-19 pandemic, and give Duke Energy too much control over whether the 70% goal is met.
“Increasing costs for families and businesses just to give Duke Energy more profits, especially when the only trade-off is that we ‘might’ get to 70% carbon reductions by the end of the decade is bad enough,” said Rory McIlmoil with environmental group Appalachian Voices.