As Becki described,
the problems with the renewable energy requirements of SB 3 (a bill
passed in 2007) already are apparent even to the bill’s proponents–if
only they listened to us.
Background on the Cost Caps
The renewable energy requirement of SB 3 mandates that utilities
generate 7.5% of their electricity from renewable energy sources.
So that consumers don’t have to pay an absurd amount (even more absurd
than what exists now) for costly “renewable” energy, there are caps on
what utilities can charge consumers. For residential consumers,
beginning in 2015 and after, the amount can’t be more than $34 a
year. Note: NC already has higher residential electricity prices
than all its neighbors.
Progress Energy now says
that they underestimated the costs to comply with the renewable energy
requirements–it is four times more expensive than they thought.
Even worse, the initial costs are going to be less than future costs
because it becomes more difficult to find additional renewable sources
(so the four times number will be higher in the future).
Don’t be surprised if the utilities that now have seen the light* and
realize the problems with renewables try to work with some
environmental extremist groups (like they did with SB 3) to try and get
rid of the cost caps. Even being conservative, this could mean
residential consumers would pay $136 a year extra for
electricity–practically, it would be much higher than that–in fact,
they aren’t even going to reach the 7.5% number. (*The utility
companies actually did know that NC was a poor renewable energy state,
but wanted the benefits that SB 3 provided regarding nuclear power
plant construction).
The Public Staff, a government body that is supposed to serve as a
consumer advocate on electricity issues, but is simply an extension of
the enviros, even admits “Unless something changes, we probably are not
going to reach the state-mandated levels.” What does “something”
mean?
During discussions of SB 3, the enviros argued that there was no need
for a cost cap to protect consumers because the extra cost for
renewables would be so small (that was hilarious then and even funnier
now). Expect them to make the opposite argument now–the caps are
too low and therefore should be eliminated so utilities can reach the
7.5% number.
What do the extra costs buy residential consumers?
1) You get to pay for the electricity of out-of-state residents, likely Texans and Californians!
Utilities can meet 40% of the 7.5% renewable energy requirement by
purchasing electricity from out-of-state renewable energy
providers–the catch is the electricity doesn’t actually come into
NC–it stays in the other state. Basically, think of this way:
About 40% of your extra costs on your electricity bills are helping to
pay for electricity elsewhere.
As I wrote in 2007 after SB 3 passed:
“As of now, barring a governor?s veto or the legislature fixing this
problem, North Carolinians will be mandated by its own legislature to
pay for public services in other states. In the future, one has to
wonder if North Carolinians will be paying for roads in Wyoming,
schools in Tennessee, and other public projects that do not benefit the
state.”
2) You get to pay for renewable energy sources that don’t even provide clean energy!
Most of the renewable energy that would be generated inside the state
would be biomass (specifically wood, but also hog waste, chicken
litter, etc.). Even DENR told the legislature that this would be
the case and across the board it is as bad or even worse than
coal. Here’s what I wrote in 2007 about what DENR presented to the legislature:
“The legislature basically ignored the environmental data provided by
the state?s environmental agency, the Division of Environment and
Natural Resources (DENR). DENR explained that a vast majority of the
renewable energy requirement of the bill would have to be met through
biomass, and more specifically wood.
DENR compared the environmental impact of wood to coal. Using DENR?s data, wood emits:
? 40% more carbon monoxide (CO) than coal
? 64% more particulate matter (fine particles known as PM-10) than coal
? 65% more nitrogen oxide (NOx) than coal
? 3 times less sulfur dioxide (SO2) than coal (the one ‘good’ thing)
? 26% more carbon dioxide (CO2) than coal”
Bottom Line
North Carolinians will have to spend billions of dollars in extra
electricity prices so we can pay for out-of-state electricity and to
subsidize a costly form of energy that is worse for the environment
than coal.
As is typical of almost every policy that the enviros push, they couldn’t care less about consumers or the poor–these extra costs are going to hurt the poor more than anyone else.
North Carolinians should ask their legislators why they intentionally
increased energy prices for no reason and what are they going to do
about it now that the critics (JLF) have been proven right about SB 3?
