North Carolina Bill Would Freeze Renewable Power Mandates

North Carolina Bill Would Freeze Renewable Power Mandates
April 1, 2013

Bonner R. Cohen

Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position... (read full bio)

The first southern state to enact renewable power mandates may be the first to repeal them. North Carolina Rep. Mike Hager (R-Rutherford) introduced legislation, the “Affordable and Reliable Energy Act,” to freeze renewable power mandates at current levels and repeal escalating future mandates.

Hager’s measure would freeze North Carolina’s renewable power mandate at the current 3 percent, eliminating higher renewable power mandates in future years.

The Affordable and Reliable Energy Act would also preclude power companies from charging customers for any extra costs associated with including renewable sources in their energy mix.

Within a few hours of Hager introducing the bill, 13 cosponsors signed on to it.

Escalating Mandates
In 2007, North Carolina became the first southern state to enact renewable power mandates. Under the statute, non-hydro renewable energy must account for 3 percent of the state’s electricity by 2012, 6 percent by 2016, 10 percent by 2018, and 12.5 percent by 2021.

Hager’s bill would not repeal the law outright but would cap the renewable power mandates at the current 3 percent. This would allow utilities to honor contracts they have already signed with suppliers, some of which are for 20 years.

Failed Promises
The renewable power mandates have failed to deliver on their supporters’ promises. Like other southern states, North Carolina has relatively poor wind power potential. To the extent some wind power is possible, the most logical places are pristine shorelines and picturesque mountain ridges. Conservationists oppose wind power facilities in these locations.

Several large solar farms have sprouted up as a result of the renewable power mandates, but they consume large amounts of land and produce little electricity.

The renewable power industry is fighting hard against the Affordable and Reliable Electricity Act. The North Carolina Sustainable Energy Association (NCSEA), a state trade group representing renewable companies, issued a press statement saying the result of the legislation “would be the loss of jobs, businesses, and investment opportunities.”

NCSEA claims the state’s renewable power mandates have created the equivalent of 21,162 one-year jobs since 2007. Hager points out the mandates have created only 3,500 full-time jobs, and those jobs come at the expense of jobs in the conventional power industry and other jobs throughout the economy as higher electricity prices force consumers to spend less money on other goods and services.

Other States Reconsidering Mandates
“States all across the country are taking a second look at these mandates which foist higher-cost, intermittent electricity on the backs of ordinary citizens,” said Todd Wynn, director of the Energy, Environment, and Agriculture Task Force for the American Legislative Exchange Council. “North Carolina is taking a step forward by ensuring the generation of affordable and reliable energy and thus protecting low-income families that are hit hardest by costs imposed by state renewable energy mandates.”

“The case against renewable energy mandates is very simple—they increase the price of electricity,” said Dan Simmons, director of state policy at the Washington-based Institute for Energy Research. “These mandates increase the cost of power for ratepayers and transfer the money to well-heeled renewable energy developers. The people of North Carolina should be grateful to Rep. Hager for looking out for their interests and fighting for affordable energy.”

Federal Plans May Impact Beaches
Complicating the North Carolina renewable mandate debate are potential federal plans to issue wind power leases off the North Carolina coast. The U.S. Department of Interior is considering offering leases at two sites between Myrtle Beach, S.C., near the North Carolina border, and Wilmington, N.C. Federal officials are also considering a third site beyond the Outer Banks, near Kitty Hawk, Nags Head, and Mateo.

The wind farms, featuring huge turbines anchored to the ocean floor, would be located at least six miles off the coast. Both areas are popular tourist destinations, and local economies could suffer if vacationers decide to avoid beaches with wind turbines marring their views.

Bonner R. Cohen, Ph. D. (bcohen@nationalcenter.org), is a senior fellow at the National Center for Public Policy Research.

Bonner R. Cohen

Bonner R. Cohen is a senior fellow with the National Center for Public Policy Research, a position... (read full bio)