A recent executive order from President Trump could help low-income North Carolinians pay their energy bills.
The Energy Independence Executive Order, issued March 28, would reverse the Obama administration’s Clean Power Plan. The plan set a national limit on carbon dioxide emissions from power plants, and required states to reduce those greenhouse gases from their 2005 levels by 30 percent before 2030. The cost of meeting those mandates were estimated at between $9 billion and $39 billion.
“Perhaps no single regulation threatens our miners, energy workers, and companies more than this crushing attack on American industry,” Trump said during a signing ceremony at U.S. Environmental Protection Agency headquarters.
Investment banker Algenon Cash says the reversal would ease an unfair economic burden on minority households. Cash, a former chairman of the North Carolina Energy Forum, said 25 percent of the after-tax income of poor African Americans is spent on energy costs, compared to 12 percent of the average American household’s budget.
“The lack of regard for the immediate consequences of these regulations on North Carolina’s most vulnerable populations is unacceptable,” Cash said.
The Clean Power Plan
The order lifts the ban on leasing federal lands for coal production, begins restoring decision-making to the states, and removes restrictions from the production of oil and natural gas, clean coal, and shale energy.
Sean Walsh, a Duke Energy spokesman, said if the president’s action successfully streamlines regulations and achieves other goals in the order, costs may go down and the utility may avoid future rate hikes.
He added that even if the order meets those goals, the utility may not be able to reduce charges to customers because of other factors that are not related to the Clean Power Plan.
The U.S. Supreme Court in February 2016 placed a stay on the Clean Power Plan, which effectively placed a hold on state implementation plans, Walsh said. At that time, North Carolina already had reduced greenhouse gas emissions by nearly 25 percent since 2005 without the federal intrusion, kept energy costs low, and was well on track to meet its 30 percent reduction by 2030.
Walsh said Duke Energy reduced CO2 emissions by about 30 percent since 2005.
“Over the next 10 years, we have plans for an additional $11 billion in clean energy, and $25 billion in grid modernization investments, which are projected to reduce CO2 emissions by 35 percent from 2005 levels,” Walsh said.
Duke doesn’t produce natural gas but should reap benefits from Trump’s regulatory rollback.
“The lower cost of natural gas benefits our customers, as fuel costs are passed onto customers dollar-for-dollar,” Walsh said. “So when natural gas prices drop, customers’ bills go down. The low cost of natural gas has allowed us to keep rates lower than the national average, and we expect it will continue be an important part of our power generation mix.
“We support policies that help streamline siting and permitting of vital infrastructure projects to modernize and strengthen the power grid, and advance innovative energy solutions.”
North Carolina is assessing the potential impact of the order, says Jamie Kritzer, a spokesman for the state Department of Environmental Quality.
Former DEQ Secretary Donald van der Vaart previously told Carolina Journal the Clean Power Plan was an illegal, “incredibly invasive rule,” and would impose an average $400 annual cost on every North Carolina electric ratepayer.
Gary Salamido, spokesman for the North Carolina Chamber, said Trump’s order has buoyed members of the business advocacy group.
“We just came back from our annual meeting, and casual conversations with people are saying it’s kind of like a sigh of relief. Now they can breathe again. Now they can plan again. It’s been positive,” Salamido said.
The order offers companies the comfort of certainty, he said.
“When you get certainty into the business community you get investment. And when you get investment, you get growth.”
North Carolina already is competitive in regard to energy costs, he said, and construction of the Atlantic Coast Pipeline and other energy developments will enhance that advantage and stimulate more business investment.
Excessive regulation not only accelerates costs for utility companies, but it drives up everyone’s costs in providing goods and services, Salamido said. The order allows companies to reset the rules, as opposed to bureaucrats legislating through regulation.
David McGowan, executive director of the North Carolina Petroleum Council, said Trump’s executive order is still being analyzed for “tangible impacts” nationally and at the state level.
“Very generally, we are encouraged by the markedly different approach this administration is taking to energy issues, particularly their emphasis on energy security, energy independence and economic development,” McGowan said.
“By some estimates, the Obama administration’s power plant rule would increase energy bills in North Carolina by 20 percent or more, which is exactly why I’ve fought to stop it,” said Rep. Richard Hudson, R-8th District, a member of the House energy committee.
U.S. Rep. David Rouzer, R-7th District, said the president’s action was welcome because it lifts unnecessary regulations from the previous administration. “This is a win for the American people, energy production, and manufacturing jobs.”
Not everyone is so pleased with Trump’s regulatory rollback.
Stephen Smith, executive director of the Southern Alliance for Clean Energy, called it “the height of irresponsibility” and “governmental malpractice.”
The order unravels the spine of Obama’s climate change agenda, he said, and lacks a coherent strategy to replace the Clean Power Plan.
Editor’s Note: This story was modified after initial posting to clarify Sean Walsh’s statements about energy costs.