In the “better late than never” file, some North Carolina leaders might be rethinking one of their worst policy decisions in recent years.
In 2007 the General Assembly passed legislation, commonly referred to as Senate Bill 3, which forces utility customers to buy expensive electricity generated from so-called renewable energy sources such as wind and solar.
The bill mandates that there be a 12.5 percent reduction in electricity generation from traditional sources like coal, natural gas, and nuclear power.
At least 7.5 percent of that reduction needs to come in the form of a switch from traditional sources to renewables, while 5 percent can come from behavior modification schemes devised by the electric companies to get people to reduce their electricity consumption. All of this is currently being phased in with a target of full implementation by 2021.
It should be noted that this was passed almost unanimously, with support from most members of both political parties, and it was done with not a single dollar’s worth of benefits from the program ever being quantified.
Apparently, the new mandates were somehow supposed to help reduce global warming, but, in fact, North Carolina could generate all of its electricity from wind and solar power and it would never be noticed in global temperatures. For the citizens of North Carolina, or at least those who are not part of the special interest groups who generate this more costly and less efficient renewable energy, it is all cost and no benefit.
Here we are five years later, and it looks as if at least some of the members of North Carolina’s legislature are beginning to realize how silly an idea this was. The Triangle Business Journal reports on an effort possibly being mounted to scale back the program. Of course, complete repeal would make the most sense.
The newspaper reports that Rep. Mike Hager, R-Rutherford, who chairs the House Public Utilities Committee, is looking at proposals. Most of the article represents the views of special-interest lobbyists for the wind and solar industries, which in large part owe their existence to North Carolina’s renewable energy mandate and similar programs in other states. But the article offers a glimmer of hope:
“Hager… may propose freezing the total [renewable energy mandate] somewhere between 3 percent and the full 12.5 percent. Hager said he’s getting feedback from members of both parties and that he’s open to other options that limit costs to ratepayers, whose electricity bills include a line item for funding utilities’ use of renewable energy.”
The John Locke Foundation has consistently opposed this program and, for the last several years, has argued for its total repeal. In 2009, JLF commissioned the only cost-benefit analysis assessing the worthiness of the program. The analysis determined that the mandate costs the state thousands of jobs. It also costs the state Revenue Department tens of millions of dollars in lost revenue. As noted, the social benefits are zero.
We are happy that the new legislature may be taking a second look at this purely special-interest legislation. We continue our hope they will ultimately go all the way and abolish it completely.
Dr. Roy Cordato (@RoyCordato) is Vice President for Research and Resident Scholar at the John Locke Foundation.