Renewable-energy advocates take beating in North Carolina House vote; opponents say bill will save customers money
N.C. House opponents of state-supported renewable-energy development turned the tables on advocates Wednesday, eliminating standard contracts for utility-scale projects advocates thought a compromise last week had protected.
The compromise fell apart when solar and other renewable industry representatives realized a provision added to the compromise during late-night negotiations last week would cause immediate bankruptcy for most solar projects in the state.
To stave off immediate disaster for the industry, negotiators agreed to give up another provision the industry fought to protect.
That provision maintained current regulations that say projects up to 5 megawatts in capacity qualify for standard contracts at fixed prices from utilities.
The 5-megawatt size and the method for computing the fixed price have been key for the rapid growth of the solar industry in North Carolina. But both will be eliminated in 2017 under the latest version of the bill.
All of this was thrashed out as the House took its final vote of the Regulatory Reform Act of 2015. It passed on its third reading 77-32.
Rep. Charles Jeter (R-Mecklenburg), who negotiated the compromise last week and the newest compromise that passed Wednesday, repeatedly said during the debate that the solar industry had signed off on the compromise. But Rep. Paul Luebke (D-Durham), another champion of renewables, made it clear that it was a forced accord.
“There’s been a lot said about how the solar industry signed off on this and the solar industry signed off on that, but this was a take-it-or-leave-it deal,” Luebke said. “The industry was told we are going to hit you really hard or just hit you kind of hard.”
Rep. Mike Hager (R-Rutherford), one of fiercest opponents of renewables in the legislature, praised the final version of the House bill. He said it will save utility customers money, increase tax revenue for the state and end wasteful state tax breaks that he says allow solar producers to sell utilities power they don’t need.
He said the bill, in the long term, will make the state an “island of low energy prices” attracting businesses that want to come to the state without subsides.
Betsy Conway of the N.C. Sustainable Energy Association says if the cuts proposed to renewables go into effect, they will lead to “lost investments and jobs in North Carolina’s economy.” She said studies show renewable energy will save customers money in the long term, not cost them more.
She says her group and other renewable-energy supporters will work to prevent the provisions from becoming law. But she would not say whether the association will attempt to defeat the law or soften its provisions in the Senate, where it goes next for action.
The Senate has, since Republicans took control of the legislature, been generally more hostile to renewable energy than the House. In fact, early in this session, renewable-energy supporters had been hopeful that the House would vote to extend the 35% state tax credit for renewable projects and adopt other pro-renewable legislation.
But it was Hager who managed to get a poison pill for renewables into the compromise last week that set up the retreat for renewables supporters this week. His provision ended the state’s 80 percent tax reduction on property taxes for solar and other renewable projects.
It would have applied to existing projects. That would have increased costs for the projects by 30 percent to 50 percent, people in the industry say. With costs that high, the projects would violate the terms of their loans, and most, if not all, would be forced into default and bankruptcy.
Faced with that, the industry gave in even further to opponents they thought they compromised with last week.
‘Hold my nose’
Now supporters find themselves fighting a rear-guard action. The House has voted to freeze the state’s renewable-energy requirements at the current 6 percent level (they are scheduled to rise in stages under current law to 12.5 percent by 2021). And the provision adopted Wednesday makes it impossible for a project large enough to be utility-scale to qualify for standard contracts.
The best hope for supporters of solar and other renewables now may be to reverse these losses through a proposed study of long-term energy policy in the state to be undertaken by a select House and Senate committee that is provided for in the Reform Act.
But it is now a matter of winning back industry supports that have been lost rather than defending supports in existing law.
Wednesday’s actions left Rep. Rick Glazier (D-Cumberland), another renewables supporter, saying he would “hold my nose and vote” for the bill to avoid worse legislation.
“But I think the trade-off that has been forced is shameful,” he said. “This bill does real long-term damage to renewables in the state.”
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