Controversial renewable bill passes North Carolina Legislature

The bill’s long-term commitments reduced oversight for Duke Energy outweigh the renewable capacity increases and coal retirements it promises, according to those against it.

October 11, 2021 Tim Sylvia

The North Carolina General Assembly

Image: North Carolina Legislature

The North Carolina Legislature has passed House Bill 951 (HB 951), a measure which looks to formally adopt Governor Roy Cooper’s goal of 70% carbon emission reduction by 2030 into state law.

The bill passed the legislature by a 90-20 vote, sending it to Gov. Roy Cooper’s desk, where many renewable energy advocates hope for a veto. Although the bill covers early coal plant closures, investment in new renewable generation, and multi-year rate plans, those against it argued that those provisions don’t outweigh its flaws, namely the new gas additions and reduced oversight of the state’s utilities.

Gov. Roy Cooper
North Carolina Department of Transportation

The bill looks to put many of the state’s coal plants on an accelerated retirement schedule, at a schedule to be determined by state regulators.

The bill also calls on state regulators to develop a plan for the state’s utilities to achieve the emissions reduction goal, mandate if passed, through power generation, transmission and distribution, grid modernization, storage, energy efficiency measures, demand-side management, and emerging technology, no later than the end of 2022.

That plan would be reviewed every two years and may be adjusted if deemed necessary by regulators and the state’s utilities.

The new solar generation capacity brought on by the proposed bill would be divided so that Duke would be allowed to build 55% of all new renewable capacity, with no limit on single-project capacity. Independent power producers would sell Duke the remaining 45% via power purchase agreements, all coming from projects 80 MW or less in capacity.

The bill would also allow Duke to implement multi-year rate plans (MYRP), a rate structure that the utility has been pursuing for some time. The MYRP is a process by which the utility can start charging customers for projected future costs. The current process that looks backward at costs actually incurred.

For the first year of the plan, however, there would be no limit and regulators would not be allowed to make changes to a proposal from Duke, just approve or deny such a plan, curbing their traditional jurisdiction.

The MYRP outlined in HB 951 would take place over three years, limit possible rate increases in the second and third years to 4%, and allow Duke to institute performance-based ratemaking (PBR) and standby charges.

PBR would allow regulators to incentivize or penalize utilities’ performance based on certain public policy goals, like emission reductions. However, in this instance, the bill calls for a “minimum system method” which experts have argued unfairly places costs on residential customers and “low-use” users.

The standby charges would apply to customers who install more than 100 kW of solar on their property. It is the same type of discriminatory rate that has been instituted in other parts of the country in an effort to deter private investment in solar.

In response to the bill’s passage in the legislature, Vote Solar released a statement calling on Gov. Cooper to veto HB 951. It said the bill as a whole “erodes critical oversight of powerful utility companies and should not be signed into law.”

The statement called the bill a disappointing result of what was an opportunity for Duke and legislature to craft “strong and equitable” energy legislation that meets the needs of North Carolina families

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