RALEIGH — The push to terminate North Carolina’s renewables program is over for the foreseeable future after a House committee in the state legislature defeated the measure with the help of key Republicans.
The vote in Raleigh was closely watched by national conservative organizations that had targeted North Carolina as the first domino in a national strategy of toppling green-energy policies in more than two dozen states.
Sixteen conservative organizations – including the American Conservative Union, Americans for Tax Reform and The Heartland Institute – made a final push for North Carolina’s bill this week with a letter urging lawmakers that it was their “moral obligation” to oppose government programs that interfere with free markets.
Despite the presence of a pair of Americans for Prosperity representatives on hand to remind lawmakers that “other states are watching,” the bill was defeated with the help of a half-dozen Republicans, including three of the most powerful legislators in the state House.
The Committee on Public Utilities and Energy voted 18-13 on Wednesday to kill the proposal that would have ended the state’s 6-year-old policy of subsidizing solar farms and other forms of renewable energy.
After the vote, Dallas Woodhouse, North Carolina director for the Arlington, Va.-based Americans for Prosperity, could barely contain his anger.
“This was a horrible vote by Republicans, and they need to be held accountable,” Woodhouse said. “And that’s all I’m going to say.”
Those who voted against ending the state’s renewables program included longtime supporters of solar power and other clean technologies. Also voting against were those who are wary of dismantling a complex state policy, which had taken months to negotiate, after a brief 30-minute debate.
But the nays also included Republicans whose districts have recruited businesses and added jobs during a severe economic downturn as a result of the program. Since its adoption in 2007, the state’s renewables policy has turned North Carolina into the nation’s fifth-largest developer of solar energy.
“It was based off local issues back home,” Rep. Tim Moore of Cleveland County, who also chairs the powerful House Rules Committee, said after the vote. “I would have had a difficult time talking to a CEO who just brought 300 jobs to Cleveland County [and telling him] that I’m going to vote to eliminate this program that justified their investment.”
Other Republican leaders voting against the bill were Conference Leader Ruth Samuelson of Mecklenburg County and Wake County’s Nelson Dollar, senior chairman of the House Appropriations Committee.
Samuelson said she had expected the vote to go either way by a single vote.
“It’s a very complicated issue,” she said, “and we were only getting one side of it.”
Hager’s fight for the bill
The chairman of the Public Utilities Committee, Rep. Mike Hager of Rutherford County, has met resistance on the bill ever since he introduced it two months ago. He delayed scheduling votes and several times watered down the proposal to make it more palatable.
With Wednesday’s vote taking place in a committee Hager runs as chairman, where he can schedule or withhold colleague’s bills, his legislation was thought to have the equivalent of a home-field advantage.
Hager, a former engineer for Duke Energy, said the bill would end a state policy of subsidies for industries that will never be able to compete with natural gas and nuclear power. He said the state is achieving little but increasing utility bills to subsidize developers of alternative energy.
“Do you want your kids, your grandkids, your great-grandkids paying a subsidy that lasts forever?” Hager asked members of his committee. “If you feed the bears, they don’t know how to look for food anywhere else.”
State law requires that at least 12.5 percent of retail power sales of electric utilities come from renewables and energy efficiency programs by 2021. Hager suggested shrinking the mandate to 3 percent, then said he could live with a 6 percent cap.
In Wednesday’s version, Hager agreed to keep the standard at 12.5 percent, to be dropped to zero in 2021. Under that version, Duke Energy and others could let their existing energy contracts run out and wouldn’t have to renew deals to buy or generate more electricity from solar, wind, biomass or offset by conservation programs.
Hager left the meeting room immediately after the vote and wasn’t available for comment.
Moore said he almost always votes with Hager, but told his colleague before the committee meeting that he could not support the elimination of the state’s renewable energy policy. His district includes a $27 million manufacturing facility in Shelby being developed by Schletter, an Arizona company that makes mounts and brackets for solar farms.
Moore said the expansion of solar farms is popular with farmers in his district and with his local chamber of commerce.
Before the vote, John Morrison, chief operating officer for Chapel Hill-based Strata Solar, told the committee his company is the fourth-largest solar developer in the nation, thanks to the state’s policy.
He also said that the cost of solar power has dropped significantly in recent years, and noted that the subsidy in electricity rates for solar is almost down to zero for solar farms now under development.
Power company costs
The 2007 state law that requires renewables allows electric utilities to collect the costs from customers, just as the utilities recover their costs for building transmission lines and power plants.
Currently Duke Energy residential customers pay 22 cents a month, while Progress Energy residential customers pay 42 cents a month, to subsidize renewables.
Duke’s commercial customers pay $3.29 a month, and Progress’s commercial customers pay $7.28 a month.
Duke’s industrial customers pay $20.29, and Progress’s pay $34.32 a month.
These subsidies represent a premium paid to make the projects profitable.
The program has catapulted solar farms to the forefront of the state’s energy landscape, but electricity produced from wind, poultry waste and swine waste is still in the early stages.
Democratic Rep. Paul Luebke of Durham, who voted against Hager’s bill, said he was pleased by the wide margin of defeat.
“It is the first victory in three years that I’ve had,” Luebke said. “It was refreshing to see a bipartisan majority.”