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This summary is part of Beyond the Beltway: A Report on State Energy and Climate Policies produced by the Center for Law, Energy & the Environment at Berkeley Law
North Carolina has a modest renewable portfolio standard (10-12% by 2018 or 2021, depending on the utility).[1] Right now, the state is at only about 7%, with the remainder split more or less equally between coal, gas and nuclear. It has old-fashioned utility regulation, with Duke Power as the main power supplier. Duke’s goal, of course, is to protect its monopoly position in its service area and the rates made possible by its cozy relationship with regulators.
Solar power has been a major bone of contention in North Carolina. For instance, Duke went to war against a company that installed five kilowatts of solar on the roof of an African American church. North Carolina law allowed installation of solar, but only if the panels were purchased rather than leased by the property owner. It was one of a handful states to ban third-party ownership. Companies that wanted to go entirely renewable, like Google, have also faced barriers. In Google’s case, the utility was able to work out a complicated arrangement whereby a solar farm sold energy to Duke under a long-term contract which Duke then contracted to resell to Google.
The big news in North Carolina was the passage of House Bill 589 in 2017. It’s a complicated bill, reflecting over a year of negotiation in the North Carolina House and then further tweaks in the Senate. Overall, HB 589 seems to be a win for solar, providing Duke some concessions while moving the ball marginally forward for solar. The bill allows homeowners to lease panels under certain conditions and allows companies to expand solar use up to about 50% of total energy use, but may make it harder for intensive energy users like Google to fill their renewables needs and may allow Duke to pay less for energy it buys back from customers via net metering rule changes.
There is another feature of HB 589 worth mentioning. A last-minute Senate amendment put an 18-month moratorium on wind facilities. The senator who offered the bill said that he was concerned that the growth of wind facilities might make the military base-closing commission more likely to close bases in the state. This is a completely baffling claim.
On top of Duke’s resistance to renewable energy (especially distributed renewables), the state legislature is firmly in the hands of arch-conservatives. Since 2010, the Republican Party has had an iron grip on the legislature. It has used voting restrictions and gerrymandering to perpetuate itself (though the gerrymandering has been the subject of litigation). It has also strengthened its power at the expense of the governor, now a Democrat, and the state judiciary.
It’s a little surprising, then, that the state has been willing to do anything at all to further renewable energy. Part of the reason seems to have been pressure from businesses like Google, big box stores, and other major companies. A 1978 federal law called the Public Utility Regulatory Policies Act seems to have been instrumental in giving the renewable industry a toehold, which has begun to come up with some political power in the state. The 2018 election may shift the political balance further, which may give an impetus to more liberalization of rules for renewables.
- Links providing support for the discussion of North Carolina can be found in Appendix D of the full report.