Repealing Renewable Portfolio Standards a Raw Deal for North Carolina
North Carolina has become the central front in a national offensive aimed at rolling back renewable portfolio standards (RPSs), the state laws that require utilities to obtain a certain percentage of the electricity they distribute from technologies that use renewable fuel sources like our rivers, woods, and wind. While RPS adversaries argue that these standards hurt the economy by increasing consumer costs, they ignore the many jobs created by the renewable energy industry as well as the benefits conferred by energy diversification.
In 2007, when North Carolina passed SB 3, the law requiring utilities in the state to distribute 12.5% renewable power by 2015, it was the first state in the Southeast to enact such a standard. That distinction has made the state a prime target for libertarian activists backed by the American Legislative Exchange Council (ALEC), which also anticipates introducing repeal legislation in other states. State Representative Mike Hager (R), Chairman of North Carolina’s House Public Utilities Committee, has pledged that by February he will introduce draft legislation that would freeze the RPS standard at its current 3% level. While Rep. Hager, an ALEC member, has asserted that his bill will not be based on ALEC’s model legislation, he agrees that the RPS standard hurts the state’s economic competitiveness.
ALEC and its supporters frequently point to a 2009 study by the Beacon Hill Institute, which argued that North Carolina’s RPS standard would cost taxpayers $1.8 billion over 13 years and result in the loss of 3,500 jobs. However, that study’s predictions have clearly been debunked. A recent report from the North Carolina Sustainable Energy Association conclusively demonstrates that North Carolina’s RPS has helped create over 15,000 new jobs and made the state a market leader in the renewable energy industry.
Beyond supporting new jobs, the state’s RPS is also increasing energy diversity, which reduces the potential for price fluctuations caused by volatile fossil fuel costs. Notably, since 2001, nearly forty dollars of the increase on an average North Carolinian’s monthly electric bill is due to rising fossil fuel costs while less than eight dollars is attributable to using renewable power. Further, though ALEC allies like Mr. Hager claim that RPS standards are an unfair market subsidy, they conveniently ignore the vast long-term subsidies enjoyed by fossil fuels. The fact is, renewable technologies have received substantially less taxpayer funding than have fossil fuels. North Carolina’s RPS simply levels the playing field.
The assault on North Carolina’s RPS represents a substantial threat to the state’s nascent renewable energy industry and its repeal would be a raw deal for its 15,000 employees and the broader economy. The state’s lawmakers should recognize the advantage afforded by their early entry into the renewable economy, and reject ill-advised efforts to return to the fossil fuel status quo.
Andrew Emerson is a Notes Editor with The George Washington University Journal of Energy & Environmental Law. He was formerly a government business development consultant and aide to a senior member of the House Energy and Commerce Committee.