News: CJ Exclusives

Hager, Millis Will Keep Fighting Renewable Mandates

Lawmakers tell Americans for Prosperity audience of goal to use lower-cost energy

WILMINGTON — Two prominent state lawmakers pushing to make North Carolina’s energy policy more friendly to consumers say they will press vigorously for freezing or reducing state mandates to use more renewable energy when the General Assembly returns for the 2016 short session.

“We are not a least-cost state anymore” in the mix of fuel sources largely due to the legislature’s passage of Senate Bill 3 in 2007, said House Majority Leader Mike Hager, R-Rutherford.

That law forces utility companies to purchase increasingly higher levels of renewable energy — which is more expensive than fossil fuels or nuclear power — or increasing energy efficiency. Those measures must replace 12.5 percent of the total fuel mix that power plants must use by 2020.

Hager and state Rep. Chris Millis, R-Pender, were among a series of speakers objecting to North Carolina’s current energy policy direction Thursday night during Americans for Prosperity North Carolina’s Free the Grid Tour event at the Wilmington Convention Center.

In the recently concluded long session the House passed House Bill 760 by a 77-32 margin. Hager called it “probably the most comprehensive energy bill out of the House.” It is designed to scale back the escalating use of renewables and other mandates in S.B. 3, Hager said.

The Senate referred the bill to its Agriculture/Environment/Natural Resources Committee, where it sat at the end of the year’s legislative session.

Senate leaders told Hager and other House allies that the Senate would consider only only one renewable-energy bill in 2015 — H.B. 760 or a narrower measure placing a December 2015 sunset on new claims for the 35 percent state renewable investment tax credit, Hager said.

The tax credit has resulted in payments to renewable-energy investors of at least $224,508,181 since 2010, according to state Department of Revenue records. The General Assembly passed the sunset measure and Gov. Pat McCrory signed it into law.

Hager said persuading the Senate to act on H.B. 760 would be a top priority in the short session, which opens April 25.

“That bill is not devastating to anybody. That bill just freezes everything in place … until we can figure out what’s going on” with renewables’ financial impact, Hager said. “We’ve got a window of opportunity right now between 2016 and 2018,” when the percentage of state-required renewable energy purchase rises from 6 to 10 percent.

“Why is anyone scared of that?” Donald Bryson, AFP state director, asked of opposition to H.B. 760, which would set up a study to determine if S.B. 3 has harmed ratepayers and taxpayers by driving up power bills.

The General Assembly needs to shift to a philosophy of providing least-cost energy for consumers, manufacturers, and the agriculture industry, rather than artificially inflating electricity costs by granting special status to renewables at the expense of other industries, Bryson said.

Ending the forced purchase of expensive renewable energy would leave more money in consumers’ pockets, reduce costs to businesses so they can hire more workers, and create a more prosperous North Carolina, Bryson said.

“We are mandating by way of your power bills that you pay for a more expensive and more unreliable form of energy,” and that is unfair, Millis said.

“We’re talking about hundreds of millions of dollars a year that the state is taking from you and giving by way of a mandate [to] renewable energy,” Millis said.

“If we do not reform, if we do not halt the renewable energy mandate, you will all have increasing power costs” that will become an economic detriment to the state, Millis added.

Becki Gray, vice president for outreach at the John Locke Foundation, noted that the solar industry started receiving the 35 percent investment tax credit in 1977. At the time, industry officials said “We need this special treatment, we just need a boost to get started,” but the tax-fueled carve-outs have increased, she said.

Over that time renewable companies received not just the 35 percent state tax credit, but a 30 percent federal tax credit, an 80 percent abatement on property taxes, and accelerated depreciation.

“There are 111 different policies and specific financial incentives that renewable energy gets in North Carolina,” Gray said. The handouts are so generous a solar company can recoup 100 percent of its investment in six years, she said.

“I don’t blame the solar companies” or investors, Gray said. “I’ll tell you who’s at fault, it’s the government.”

Hager said the renewable energy industry’s major players have taken not of his opposition to renewable subsidies.

“I’ve been such a strong opponent of solar renewables [that solar supporters are] spending money in my district trying to find a primary opponent,” Hager said. Solar companies are taking ratepayers’ tax dollars and “they’re transforming into dollars to run against good conservatives. That is what we’re up against.”

Bryson said renewable companies are also redirecting taxpayer dollars into preserving their advantage in the marketplace.

“These people are making money, and then they’re taking that money and putting it back into lobbyists at the General Assembly,” Bryson said. The solar industry had 27 lobbyists at work in the last session. By contrast, Duke Energy, the nation’s largest power utility, had only eight.

“They burned through about $125,000 minimum a month on lobbyists” in the 2015 session, Hager said. “They spent [about a half-million dollars] to stop that bill in the Senate. … That’s the kind of dollars we’re talking about, folks. That’s what we’re fighting against.”

Dan E. Way (@danway_carolina) is an associate editor of Carolina Journal.