by Jon Sanders
Director of the Center for Food, Power, and Life, Research Editor | John Locke Foundation
An amended version of the regulatory reform bill (HB 760), sponsored by Reps. Chris Millis (R-Pender), John R. Bell IV (R-Wayne), and Dennis Riddell (R-Alamance), would make several changes that would protect electricity consumers in North Carolina from unnecessary price increases.
The bill as amended would cap North Carolina’s renewable energy portfolio standards (REPS) mandate at its present level and prevent the REPS surcharge on residential customers from nearly tripling, which is due to happen in July even as commercial and industrial customers’ REPS surcharges stay the same.
It would also repeal the 80 percent property tax exemption (see item 45) for solar energy electric systems.
The version with the amendment offered by Reps. Charles Jeter (R-Mecklenburg) and Mike Hager (R-Rutherford) passed second reading 80-31 and is slated for a final vote early next week (no longer subject to the crossover deadline).
Another important aspect of the amended bill would be the creation of a joint committee to study the long-term energy needs of North Carolina, which includes studying the REPS mandate.
The bill already included a comprehensive study of known and measurable costs and benefits of distributed generation. The study would be provided by the Energy Policy Council to the Joint Legislative Commission on Governmental Operations and the North Carolina Utilities Commission. It would assess known and measurable costs and benefits of distributed generation, including grid issues and standby generation issues associated with nondispatchable sources and unseen costs imposed by consumers not participating in net metering.
The studies would be important contributions to the discussion about energy policy in North Carolina. There is a great deal of noise about the effects of REPS on consumer electricity prices.
Comprehensive economic analysis finds that it raises electricity rates. The North Carolina Department of Environment and Natural Resources’ March 2015 Energy Report, in discussing manifold effects and issues with the REPS mandate, found that "North Carolina’s rates have increased more than 2.5 times the national average increase since 2008." Industry-produced papers of course downplay those price effects or even suggest the mandate was lowering prices.
REPS mandates are well known rate increasers, however. Determining the magnitude of the increase in North Carolina now and, more importantly, in the future if the much higher REPS mandate is untouched would be key information to have.
Further clarity would help state leaders resist the pull of cronyism and stand for the vast majority of North Carolinians whose top concern with electricity is least-cost power available at the flip of the switch.
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