Lawmakers in the North Carolina General Assembly are looking to scrap part of the state’s current carbon reduction plan in a new bill that passed the Senate Committee on Agriculture, Energy, and Environment on Tuesday.
The main part of the bill would remove the Carbon Plan’s interim goal of reducing carbon dioxide emissions by 70% by 2030 or shortly thereafter, potentially saving North Carolinians billions of dollars. However, the Energy Security and Affordability Act (SB 261) retains the long-term goal of achieving carbon neutrality by 2050 for electric utilities, as legislation passed in 2021 requires.
In 2021, Republicans and Democrats together established the first carbon-emissions reduction goals for the electricity sector in the Southeast. While they enacted safeguards to ensure prioritizing reliability and the lowest possible cost, the 2030 interim goal complicated how the commission approached energy decisions, such as natural gas and nuclear.
“What we found is that when you look at the modeling that this interim goal drove, it drove the commission to be very short sighted out of a belief that the interim goal may be as sacrosanct as the 2050 carbon neutrality,” explained state Sen. Paul Newton, R-Cabarrus, during a Tuesday meeting.
Sponsored by state Sens. Phil Berger, R-Rockingham; Paul Newton, R-Cabarrus; and Lisa Barnes, R-Nash, the bill will now head to the House Rules Committee. Berger’s office said the latest proposal will shift the state’s focus to long-term energy planning. This will provide utilities with greater flexibility to select and construct new and affordable energy generation resources, like nuclear power.
Despite the Carbon Plan law requiring the North Carolina Utilities Commission to take the least-cost path to reducing emissions, and one that would maintain or enhance the reliability of the grid, the short-term interim goal has had the unintended consequence of favoring solar facilities, as explained by Jon Sanders, director of the Center for Food, Power and Life at the John Locke Foundation.
“Unfortunately, the solar facilities are unreliable, weather-dependent, and extremely land-intensive facilities,” Sanders said. “They obligate the building of an inordinate amount of new transmission lines, and they need a great deal of redundancy — overbuilding — to approximate reliability. On plain reading, the solar facilities called for don’t fit the bill of least-cost, nor do they do anything to help with grid reliability.”
The North Carolina Utilities Commission moved the interim goal from 2030 to 2034, a decision that saved North Carolinians $4 billion. However, models showed removing the interim goal altogether would save North Carolinians a projected $13 billion.
Another element of the bill allows utilities to recover construction costs for new baseload power plants before they are completed to ensure energy reliability. It also sets guidelines for solar energy development and cost recovery for out-of-state projects and directs the Utilities Commission to develop a carbon plan by 2026, which will be reviewed every two years.
“What I want to do with this bill No. 1 is clarify for the commission that we are not asking them to jam down uneconomic resources on North Carolinians because of this completely arbitrary [goal] — and I say arbitrary with respect to scientific impact. It’s completely arbitrary to have a 70% by 2030 goal,” Newton said. “And so if we eliminate it, it will eliminate the confusion in the modeling; it will allow the commission to step back and say, ‘All right, that’s gone. So let’s model to 2050 which is still the goal in the in the statute.’ And that will open the door to a number of resources for which the door was closed when we had an arbitrary 2030 goal.”
“For those who are worried that shedding the interim goal of a 70% reduction in carbon dioxide emissions in North Carolina would somehow plunge the earth into climate cataclysm, recall that North Carolina has already seen its emissions fall by 52% so far (and still falling) without the Carbon Plan,” Sanders added.
He noted that China alone has rapidly increased its emissions, adding 42 times as much new coal-fired generation than North Carolina can possibly retire.
“What’s best for North Carolinians is low-cost, reliable electricity, not having to pay much more for uncertain electricity just to hit an interim political goal,” Sanders concluded.