by Dr. Roy Cordato
Senior Economist, Emeritas
After my environment newsletter covered the fact that Governor McCrory, in a speech to renewable energy supporters, took credit for killing legislation that would have rolled back renewable energy mandates on North Carolina citizens, WPTF’s Bill LuMaye (August 12) asked the Governor directly about his support for these corporate subsidies. One can only conclude from the exchange that the Governor was either purposely misleading his audience or that he is woefully uninformed on the nature of the legislation he claims to have killed. LuMaye asked the Governor two questions on the subject.
LuMaye: I must ask you about this green energy mandate stuff. A lot of Republicans were moving to end that in the state of North Carolina. I understand you support it. I’m just curious as to why.
McCrory: I don’t believe in immediate shut off of that. I think it ought to be a systematic shut off of what type of energy should be subsidized and there should be a clear rollout plan of when those subsidies stop. I did not agree with immediately cutting it off with no warning to investors who are investing in solar or wind or other types of power but I do believe there has to be a date in which we do shut it off and it’s got to be a clear date probably not within a long period of time from right now.
Here’s the rub, the legislation that the Governor opposed did not “immediately cut off the subsidies without warning to investors.” In fact, both the House and the Senate legislation that the Governor killed, grandfathered in all existing contracts between utility generators and renewable energy providers under the existing mandates and guaranteed that the utility companies could recover the costs of these contracts. Furthermore, there was no “immediate shut off” of the mandates. The Senate bill would have held the mandate at the levels currently obtained for a decade, and the House bill would have allowed the mandated levels to double over current levels over the next 5 years — hardly an immediate cutoff. The question then is, was the Governor purposely misleading LuMaye and his audience, or did he honestly not know about these provisions? For citizens of North Carolina, whichever is the case, the answer is not comforting.
LuMaye’s second question was a follow-up on the first. Referring to the Governor’s claim that he favors a “clear date” for ending the mandates that is “not within a long period of time,” LuMaye asked the Governor: “So you don’t have a specific date yet, but sooner than later?” The Governor’s answer was a not-so-artful dodge.
McCrory: We need one so we can tell investors in all forms of energy what the real cost will be and what the market will sustain because that’s really what’s going to determine the cost of energy is the true market and in the short term government has put money into nuclear power and even certain types of clean coal and into wind and solar, but that subsidy should last not a long time.
I remind the reader that both the House and Senate bills, opposed by the Governor, did in fact give “clear dates” for ending the mandates, 5 and 10 years out respectively. So, assuming that the Governor did indeed understand what was in the bill, when he says that the date should “not be in a long period of time” we have to conclude that, in his mind, 10 years is still too short.
The fact is that this is exactly the kind of rhetoric that the special interests in the renewable energy industry want to hear. It amounts to meaningless and vague references to non-specific timelines that are no less open-ended than those the special interests have been embracing all along.