by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
In North Carolina, you have no choice in who provides you electricity. The state considers electricity a “natural monopoly.” For that reason, North Carolina law concerning electricity provision calls for “adequate, reliable and economical utility service to all of the citizens and residents of the State” and, just as important, “the least cost mix of generation and demand-reduction measures which is achievable.”
Least-cost, reliable electricity at the flip of a switch is what people expect, and the law is supposed to uphold those expectations.
Nevertheless, electricity policy in North Carolina is notorious for being debated among “stakeholders,” who by definition have a business or political interest at stake. Those interests very often clash with the clear interest of people in getting least-cost and reliable electricity.
For example, Gov. Roy Cooper identified 164 stakeholders to develop his expensive and risky “Clean Energy Plan.” When those stakeholders were asked to identify their priorities for electricity provision, only seven percent reported interest in valuing “Affordability” and “Reliability.” One of the major contributors to Cooper’s plan even came from the perspective that having “cheap, clean, abundant energy” would be “just short of disastrous.”
Electricity isn’t just any consumer good, however. Monopoly electric utilities are providing a basic human need. Causing rates to go higher than necessary affects people deeply. Research shows that lower energy prices save lives, but higher energy prices cost lives. According to the U.S. Energy Information Agency, one in five families had to forego food or medicine just to pay their energy bills.
Energy poverty is a serious issue, which is why responsible policymakers should be vigilant to protect consumers from it.
A bill before the General Assembly would restore and boost the state’s protection of North Carolina’s electricity consumers. Sponsored by Reps. Larry G. Pittman, George G. Cleveland, Keith Kidwell, Mark Brody, and Jeffrey C. McNeely, House Bill 529 as filed would make several key changes to protect electricity consumers in NC from unnecessarily higher costs. Among them:
As long as NC ratepayers have no choice in who sells them electricity, the state absolutely must protect them from unnecessary costs and spotty service. Least-cost, reliable service at the flip of the switch must be the legal standard.
Given how vital electricity is to people, the business interests of well-connected stakeholders and high-cost ideologues should take a back seat to doing what’s right for electricity consumers. It is not only unjust to force captive ratepayers to pay any more than absolutely necessary, it can even be dangerous.