North Carolina energy bill would set carbon standards and increase renewables

Cypress Creek

On Friday, Governor Roy Cooper and Senate President Pro Tempore Phil Berger (R-Rockingham) announced that they had reached an agreement on a revised version of House Bill 951 Modernization of Power Generation. Since then, the North Carolina Sustainable Energy Association (NCSEA) has carefully reviewed the bill and discussed it with its various members to assess its potential impact on customers, clean energy market opportunities, and more.

The NCSEA is grateful to Senator Phil Berger and Governor Roy Cooper for their thoughtful approach in reviewing this important legislation and for the opportunity for the NCSEA to provide input during the legislative process. As newly written, HB951 removes prescriptive mandates from previous bills around uneconomical gas replacement generation and allows the North Carolina Utilities Commission (NCUC) to determine future generation based on carbon reduction targets, reliability and lowest cost. It also restores the Commission’s power to effectively regulate monopoly utility, which was significantly limited in an earlier version.

The NCSEA is grateful for these improvements and for including the following provisions:

  • Establishing one of Southeast’s first carbon standards – and one of the few nationally – that will open additional market opportunities and increase renewable energy deployment and customer access in the short and long term;
  • enhanced securitization of the retirement of coal-fired power plants, which will lead to cost savings for taxpayers;
  • Establishing performance-based pricing to incentivize the utility to improve service in key areas, such as reducing low-income energy costs, expanding opportunities for energy efficiency, and supporting fairness in contracting;
  • Continuing existing Competitive Procurement of Renewable Energy (CPRE) program in 2022 before establishing an independent power producer (45%)/utility (55%) split ownership program for solar and solar + storage; and
  • Provided the opportunity for certain independent energy suppliers to extend existing power purchase agreements.

However, like any well-thought-out compromise, problematic provisions remain. NCSEA shares its concerns about some aspects of the bill, including:

  • Strengthening the regulatory structure of the energy monopoly in North Carolina to the detriment of private companies and customers; and
  • Exclusion of purchasing energy from all sources, effectively closing the market to certain types of independent power generators;
  • Lack of protection for customers against possible excess profits under the new multi-year tariff plan structure; and
  • Incorporation of potential language loopholes related to the overall reduction of carbon emissions and the distribution of solar property.

The NCSEA will work to address these concerns at the NCUC and, if necessary, through future legislation.

The compromise proposal rightly empowers the NCUC to oversee a new, carbon-conscious paradigm of energy regulation and requires the Commission to take significant responsibility in achieving a cleaner energy future. As such, the NCSEA looks forward to extensive cooperation with the Commission during the regulatory and implementation processes.

Overall, however, the new version of HB951 marks a significant step forward in the future of clean energy in North Carolina through its decarbonisation goals and opportunities for expanding reliable, affordable, clean energy in the state. It establishes North Carolina as a leader in its renewable energy ambitions and will continue to fuel North Carolina’s $40 billion clean energy economy.

“NCSEA would like to thank Sen. Phil Berger and Gov. Cooper for their commitment to drafting meaningful energy regulatory reform legislation,” said NCSEA Executive Director Ward Lenz. “While the Senate’s proposed replacement of HB951 is not perfect and will affect different clean energy technologies and customers in different ways, it is ultimately an important milestone as we continue to work towards a more transformational energy policy that delivers affordability and reliability to customers and concerns. for more competition in the market.”

NCSEA is encouraged by the bipartisan support for HB951 and the opportunities it presents to bolster North Carolina’s clean energy economy. NCSEA appreciates the improvements made to HB951 and looks forward to working with a diversity of stakeholders to ensure an ongoing transition to a clean, competitive, reliable and affordable energy future.

News release from the North Carolina Sustainable Energy Association

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