House Bill 951, signed by Gov. Roy Cooper earlier this month, seeks to lower the state’s carbon emissions while maintaining low costs for consumers.
The bill sets two goals for decreasing emissions: a 70 percent reduction in 2015 emissions levels by 2030 and becoming completely carbon neutral by 2050. These changes would require cooperation from the state’s regulated energy monopoly Duke Energy and the North Carolina Utilities Commission.
Jonas Monast, a professor in the UNC School of Law and director of UNC’s Center on Climate, Energy, Environment and Economics, said the bill wouldn't be the single cause of declining carbon emissions, but it can play an important role in determining the way North Carolina generates power in the future.
“We’re gonna see a decline anyway without this because of the coal power plants getting old,” Monast said. “The question is what replaces those old coal power plants — this bill proposes a solution.”
Monast said when utilities commissions set rates, they are required to chose the least cost option — defined as a "short-term view." H.B. 951 instead encourages the commission to look at the least cost principle in a long-term view, which occurs through the introduction of multi-year rate making.
Normally, a regulated monopoly like Duke Energy would analyze its costs for previous years and then create a rate to charge that would allow them to continue those operations, given the approval of the Utility Commission.
In a multi-year rate-making environment, which is what customers pay for utilities, corporations propose rates they believe will be able to cover their operations in the future, which many utility companies argue is an efficient system. The bill has safeguards to prevent the company over-earning if the rate is too high in comparison to the costs and allows the rate to be adjusted if the company is not making enough to cover its costs.
“Last week’s bipartisan votes signal another important milestone for North Carolina’s clean energy transformation,” Duke Energy spokesperson Bill Norton said in a statement. “We thank House and Senate leaders and the Governor for their leadership on this legislation.”
Sen. Paul Newton, R-Cabarrus, Union, said he approved the bill because it compromised on the priorities of both parties, promoted environmentalism and fiscal responsibility and provided the opportunity to show unity for a meaningful issue.
“We got a reasonable, principled compromise reflected in this bill,” Newton said. “For us, it was rational, reasonable decarbonization both on a timeline and in a manner that makes sense for North Carolinians.”
Some experts, like Al Ripley, director of the consumer and housing project at the North Carolina Justice Center, worry about the legislation.
“This is the worst consumer legislation I've seen in the 20 years I’ve been doing this work,” Ripley said. “There’s a lot of other decisions made in Raleigh where at least people have some choice and control of if they have to pay something, but there’s no way to live in a modern world if you can’t pay for electricity.”
Ripley said vague wording in the bill left loopholes that a utility could exploit to delay implementation of the plan and lessen its scope. He also said the bill could potentially harm low-income residents.
“I think it’s just very important to recognize that we’ve got 1.4 million people in this state living in poverty, and there’s nothing in this bill that’s going to help them avoid the increased cost of this program,” Ripley said.
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