Repealing Renewable Portfolio Standards: A Raw Deal for North Carolina

North Carolina has become the central front in a national offensive aimed at rolling back renewable portfolio standards (RPSs), the state laws that require utilities to obtain a certain percentage of the electricity they distribute from technologies that use renewable fuel sources like our rivers, woods, and wind.[1]  While RPS adversaries argue that these standards hurt the economy by increasing consumer costs, they ignore the many jobs created by the renewable energy industry as well as the benefits conferred by energy diversification.

In 2007, when North Carolina passed SB 3, the law requiring utilities in the state to distribute 12.5% renewable power by 2021, it was the first state in the Southeast to enact such a standard.[2]   That distinction has made the state a prime target for libertarian activists backed by the American Legislative Exchange Council (ALEC), which also anticipates introducing repeal legislation in Ohio and Michigan.[3]  State Representative Mike Hager (R), Chairman of North Carolina’s House Public Utilities Committee, has pledged that he will introduce draft legislation that would freeze the RPS standard at its current 3% level.[4]  While Rep. Hager, an ALEC member, has asserted that his bill will not be based on ALEC’s model legislation,[5] he agrees that the RPS standard hurts the state’s economic competitiveness.[6]

ALEC and its supporters frequently point to a 2009 study by the Beacon Hill Institute, which argued that North Carolina’s RPS standard would cost taxpayers $1.8 billion over 13 years and result in the loss of 3,500 jobs.[7]  However, that study’s predictions have clearly been debunked.  A recent report from the North Carolina Sustainable Energy Association conclusively demonstrates that North Carolina’s RPS has helped create over 15,000 new jobs and made the state a market leader in the renewable energy industry.[8]

Beyond supporting new jobs, the state’s RPS is also increasing energy diversity, which reduces the potential for price fluctuations caused by volatile fossil fuel costs.[9]  Notably, since 2001, nearly forty dollars of the increase on an average North Carolinian’s monthly electric bill is due to rising fossil fuel costs while less than eight dollars is attributable to using renewable power.[10]    Further, though ALEC allies like Mr. Hager claim that RPS standards are an unfair market subsidy,[11] they conveniently ignore the vast long-term subsidies enjoyed by fossil fuels.[12]   The fact is, renewable technologies have received substantially less taxpayer funding than have fossil fuels. [13] North Carolina’s RPS simply levels the playing field.

The assault on North Carolina’s RPS represents a substantial threat to the state’s nascent renewable energy industry and its repeal would be a raw deal for its 15,000 employees and the broader economy.[14]  The state’s lawmakers should recognize the advantage afforded by their early entry into the renewable economy, and reject ill-advised efforts to return to the fossil fuel status quo.

— Andrew Emerson, Notes Editor


[1] See Ridgway M. Hall, Thomas A. Utzinger, & Jessica A. Hall, Renewable Portfolio Standards, LexisNexis Global Climate Change Special Pamphlet Series, February, 2010)

[2] See Rich Crowley, North Carolina Clean Energy Industry Census 2012, North Carolina Sustainable Energy Association, available at: http://energync.org/assets/files/2012Census.pdf .

[3] Nick Juliano, Conservative group gunning for state renewable mandates, E&E Publishing,  November 5, 2012, available at: http://www.eenews.net/eenewspm/2012/11/05/archive/3

[4] See John Downey, N.C. Renewables Law Targeted by GOP Group, Charlotte Business Journal, December 7, 2012, available at: http://www.bizjournals.com/charlotte/print-edition/2012/12/07/renewables-law-targeted-by-gop-group.html

[5] Id.

[6] See Juliet Eilperin, Climate Change Skeptics Work to Reverse Renewable Energy Mandates, The Washington Post,  November 24, 2012, available at: http://articles.washingtonpost.com/2012-11-24/national/35510640_1_renewable-energy-renewable-power-mandates; see also Electricity Freedom Act (Model Legislation, adopted October 18, 2012), available at: http://www.washingtonpost.com/wp-srv/business/documents/Electricity-Freedom-Act-121123.pdf; see also Nick Juliano, Conservative group gunning for state renewable mandates, E&E Publishing, November 5, 2012, available at: http://www.eenews.net/eenewspm/2012/11/05/archive/3

[7] See Eilpern supra note 6 (discussing David Tuerck, Michael Head, & Paul Bachman, The Beacon Hill Institute, The Economic Impact of North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard (August, 2009).

[8] See Crowley, supra note 2. 

[9] See Lori A. Bird, Karlynn S. Cory, & Blair G. Swezey, National Renewable Energy Laboratory Report No. TP-670-43532, Renewable Energy Price-Stability Benefits in Utility Green Power Programs, 1 (August, 2008), available at: http://www.nrel.gov/docs/fy08osti/43532.pdf  ; see also Dan Lieberman & Siobhan Doherty, Commission for Environmental Cooperation, Renewable Energy as a Hedge Against Fuel Price Fluctuation: How to Capture the Benefit (Mary 23, 2008), available at: http://www.cec.org/Storage/62/5461_QA06.11-RE%20Hedge_en.pdf

[10] See John Downey, Group: Renewables Don’t Affect Rising Energy Rates, Charlotte Business Journal, January 11, 2013, available at: http://www.bizjournals.com/charlotte/blog/power_city/2013/01/group-renewables-dont-impact-rising.html.

[11] Hannah Northey, Wind, solar groups quit ALEC as conservative powerhouse targets clean-power programs, E&E Publishing, January 30, 2013, available at:  http://www.eenews.net/public/Greenwire/2013/01/30/1?page_type=print

[12] See Nancy Pfund & Ben Healey, DBL Investors, What would Jefferson Do? 29, September 2011, available at: http://www.dblinvestors.com/documents/What-Would-Jefferson-Do-Final-Version.pdf.

[13] Id.

[14] See supra note 7 and accompanying text.

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