HB589: Update from Ivan
NCSEA Friends,
As you likely know, comprehensive energy legislation was introduced on June 5 in the form of House Bill 589, “Competitive Energy Solutions for North Carolina.” This bill is the result of nearly one year of stakeholder discussions – over the course of more than 30 meetings – in which NCSEA played a leading role to craft and negotiate a policy compromise that fairly represents, advocates for, and advances the future of our shared clean energy economy to the benefit of all.
A lot has changed in the 10 years since the passage of Senate Bill 3 and the creation of North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS). Renewable energy and energy efficiency-related technologies have advanced dramatically, with rapid cost declines. North Carolina is now home to more than 34,000 clean energy jobs across a nearly $7 billion industry. North Carolina’s utilities and clean energy industry have successfully complied with the general requirements of the REPS law years ahead of schedule, which will enable the avoidance of more than $650 million in costs to electricity consumers.
Our state’s political landscape has also experienced many changes in the last 10 years. In addition to political party shifts in the executive and legislative branches of state government, there has been an unusually high turnover of legislators from both parties. Did you know that out of the 170 members currently serving in the North Carolina General Assembly, only 9 Senators and 23 House Members were in office for the Senate Bill 3 vote in 2007? This turnover of legislators has required an enormous amount of time by NCSEA, our lobbying team, and members to educate new legislators about clean energy technologies, economic development opportunities, and the success of clean energy policies in North Carolina’s monopoly-controlled, highly-regulated electricity market.
The stakeholder process over the past year that led to House Bill 589 was by no means perfect; discussions were often contentious, and compromise was mandatory in order to move them forward. However, what never wavered was NCSEA’s laser focus on our members and their diverse interests, which we fought tirelessly to champion day in and day out. Once the stakeholder process was established by House Speaker Tim Moore and Senator Phil Berger in October 2016, NCSEA shared updates and sought feedback weekly from our business members and partners.
The resulting compromise (via House Bill 589), while also not perfect, is a reflection of these efforts and is an important, timely step forward in policy and market opportunity for our collective community. The recent House of Representatives’ 108-11 vote for House Bill 589 was a strong showing of bipartisan support for the first positive major clean energy bill in North Carolina since 2009. This support is founded on House Bill 589’s promise to give North Carolinians greater access to cleaner and more affordable sources of energy.
Specific opportunities include:
- Restarting Duke Energy’s Green Source Rider program. While the first iteration of this program was mediocre at best with only three participating companies, this provision allows large customers to work directly with renewable energy developers to purchase the type of renewable energy that makes the most sense for their businesses, customers, and employees. 600 MW of renewable energy is earmarked for this new GSR program, with 100 MW reserved for the military and 250 MW for the University of North Carolina campuses. NCSEA will work hard to make sure this provision is properly implemented by Duke Energy and the N.C. Utilities Commission.
- Legalizing the leasing of renewable energy systems and allowing Duke Energy to participate in the leasing market.
- Creating a new rooftop solar rebate program that will offer Duke Energy’s residential and commercial customers rebates for 20 MW of solar per year for five years, for a total of 100 MW. This rebate will at least triple the amount of rooftop solar in North Carolina over the next five years, with the possibility of further growth if issues with House Bill 589’s leasing provisions are greatly improved. NCSEA will work to ensure this program is implemented by Duke Energy as promised.
- Requiring Duke Energy to create a modestly-sized 40 MW community solar program, which enables Duke Energy to begin to catch up with the leadership of our state’s Electric Membership Cooperatives who have already listened to their member-owners and deployed over a dozen community solar offerings with more under development.
- Directing a study to understand the values and benefits that energy storage can provide to North Carolina’s grid. This will enable us to make fact-based decisions to create regulatory and market rules with clarity and confidence going forward.
- In total, HB589 will result in a minimum of 6,800 MW of solar in Duke Energy’s service territories by 2022, a more than 225% increase from the amount of solar capacity currently installed.
When I started with NCSEA in 2005, North Carolina ranked 47th in solar, and was similarly ranked in every other area of clean energy. Now, our great state is 2nd in solar and smart grid, significantly improved in energy efficiency, and NCSEA is rapidly identifying and working with you to remove barriers to the expansion of energy storage, biogas, and electric vehicles in our state. House Bill 589 will keep North Carolina in the top 3 states for solar through 2022 and keep us on track to continue the progress we have made since 2005.
House Bill 589 is evolutionary, not revolutionary. This compromise legislation is in no way visionary, but it does meet decision-makers and the vast majority of stakeholders where they are today in understanding, awareness, and support of clean energy. While the bill does not bring us to “Utility 2.0,” an updated utility business model, its combination of bipartisan support, utility support, and consumer support shows the legislation is a much-needed step forward. For these and other reasons, House Bill 589 has received NCSEA’s support.
I can confidently say I am more optimistic than ever about the direction in which we are headed, and the impact we continue to make, together. Whether or not House Bill 589 becomes law, and we hope it will, the prevalence of clean energy woven throughout a bill of this stature says loud and clear that we’ve not only arrived, but we’re not going anywhere – and we are a mandatory voice in the conversation about our state’s energy and economic future. I urge you today to embrace that truth, as we all reflect on the details and next steps that must be taken to resolve issues with this compromise legislation, if and when it becomes law.
To our members and supporters who cannot yet join us in supporting this bill, I want to say that we hear you and we will continue doing everything we can to ensure its implementation will support everyone in North Carolina’s clean energy economy. In the meantime, I also say to you: Let’s not make perfect the enemy of good. While there might be room for improvement, the bill as written today goes far to further clean energy on the whole. If passed, NCSEA will work swiftly to ensure this compromise increases customer access and expedites the growth of new clean energy infrastructure for our state in the coming years, in ways that benefit all of North Carolina.
I encourage all of our members and friends to focus on what we know for certain we will collectively gain from the passage of House Bill 589. In the first years of our state’s REPS, NCSEA successfully advocated preventing numerous proposals by the monopoly utility that would have diluted the REPS, making it ineffective. If passed into law, we expect the implementation of House Bill 589 to be no different. You can be confident NCSEA will continue to stand with you in the trenches as we advocate for and advance our clean energy economy together, to the benefit of everyone in our great state.
Sincerely,
Ivan Urlaub and the NCSEA Team