Policy Position

Renewable Energy Portfolio Standard

in Government Regulation
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Households in North Carolina get electricity from a monopoly provider. In return for a guaranteed consumer base, electric utilities are expected to provide reliable power.
Utilities were also expected to provide the least-cost reliable power. That changed when the Renewable Energy and Energy Efficiency Portfolio Standards (REPS) law passed in 2007.

Key Facts

  • Keeping consumers’ costs as low as possible is the number one issue in electricity policy in North Carolina. Electricity is a basic human need.
  • In 2015, electricity costs for the poorest North Carolina households (those earning less than $30,000 per year) averaged 9 percent of their after-tax income — a significant monthly expense.
  • North Carolina has long boasted highly competitive electricity rates. That legacy is quickly being erased.
  • Since North Carolina’s REPS mandate took effect in 2008, North Carolina’s electricity rates have increased by over twice the regional average increase and about 2.5 times the national average increase.
  • From 2010 to 2014, North Carolina’s REPS mandate had cost electricity consumers $276 million, according to economists at the Beacon Hill Institute at Suffolk University (BHI).
  • Those additional costs were just from the lowest levels of REPS implementation. The REPS requirement was for only 3 percent of sales through 2012, going up to 6 percent through 2015 (a doubling) and 10 percent (more than tripling) in 2018.
  • By 2021 and beyond, the REPS requirement is set to be 12.5 percent of sales. That is over four times the initial requirement.
  • By then the REPS mandate — if the legislature allows it to be fully implemented — will have cost North Carolina about $2 billion (in 2013 dollars) and nearly 3,600 jobs, according to BHI estimates.
  • Despite implications in media reports, renewable energy sources (wind and solar) aren’t a one-for-one trade-off for traditional resources (coal, gas, nuclear). They are far less efficient.
  • According to a Brookings Institution study by economist Charles Frank, it takes about seven solar plants and four wind plants to produce the equivalent output of a single, traditional power plant.
  • But wind and solar are unreliable — the wind doesn’t always blow, the sun doesn’t always shine, especially not in coordination with up-to-the-minute consumer needs.
  • So wind and solar still need a reliable resource — coal, gas, nuclear — always cycling in the background. That’s costly and means they’ll never “replace” those resources.
  • Solar and wind can produce electricity at peak capacity for only a fraction of the time. So their main selling point (reducing CO2 emissions) only occurs a fraction of the time. The rest of the time they are imposing huge costs.
  • Considering all those factors, Frank found solar and wind to be the most expensive ways to reduce carbon dioxide emissions in generating electricity, and natural gas to be the least.
  • Energy-related CO2 emissions in the U.S. are down 12 percent since 2005, according to the U.S. Energy Information Administration. The main reason is the change-over to natural gas for electricity production.
  • Researchers at the National Oceanic and Atmospheric Administration (NOAA) found that the increased use of natural gas for electricity generation (from 1997 to 2012) was responsible for lowering CO2 emissions by 23 percent, SO2 emissions by 40 percent, and NOx emissions by 44 percent.
  • The European Union in 2012 classified natural gas as a green, low-carbon energy source.
  • Solar and wind require far more workers per unit of energy generated than traditional energy sources.
  • That may sound like it’s good for employment, but only for jobs in renewable energy. It’s not good for net employment, which is harmed.
  • It also means that renewable energy sources are far less efficient — and more expensive — than traditional energy sources.
  • Falling fuel costs, mostly in natural gas, are responsible for an actual cut in Duke Energy Progress electricity rates from 2015 to 2016, according to the Utilities Commission. They decreased by $5.64 a month for the typical residential customer.
  • That is a net rate reduction. Costs imposed by the REPS law (REPS mandate and Demand Side Management/Energy Efficiency riders) went up by $2.29 a month for the typical residential customer.


Cap and sunset the REPS mandate and return North Carolina to its standard of least-cost, reliable power.


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