$3,800 per N.C. family for renewables: study claims become focus of event on energy mandates

BrockHagerYonkRALEIGH – Reviving a stalled bill to freeze North Carolina’s renewable-energy mandate was the aim of an event that Sen. Andrew Brock (R-Davie) and Rep. Mike Hager (R-Rutherford) hosted at the Legislative Office Building Wednesday. The lawmakers were joined by the leader of the American Energy Alliance, a free-market energy group, and representatives from businesses and academia.

The event included the owner of a Clinton-based trucking firm that serves farms who said that solar farms “do nothing but take away our best farmland” and the father of the N.C. State University’s Solar House who said that renewable-energy mandates cost the state money that could be used for teachers, roads and infrastructure needs.

But one study and two figures kept coming up.

The Strata Policy study: $3,800 and 24,000 jobs

The study is an economic analysis by Strata Policy and researchers at Utah State University that states that “North Carolina’s (Renewable Energy Portfolio Standard) will raise electricity prices significantly across all sectors.” Study authors say each North Carolina family will lose approximately $3,800 as a result of the REPS. They also claim that 24,000 jobs could be lost as a result of having the energy mandates in place.

The study was rebutted by the Sierra Club’s Dustin Chicurel-Bayard, who said that it was faulty because it blamed all the job losses of the Great Recession on the REPS.

“It takes the total number of jobs we’ve lost and divides it. It’s not a scientific way, it’s not an accurate way to do anything. It’s actually quite misleading,” Chicurel-Bayard said.

Ryan Yonk, who is an assistant professor of economics at Utah State University, defended the study, saying that since different states enacted renewable-energy mandates in different years, researchers were able to control for the fluctuations of the larger economy to discern the effects of the energy mandates.

“Looking at just when North Carolina was doing their portfolio standard would have been problematic,” Yonk said. “And so what we’re doing [in the study] is a national look at all 31 states that have done it, line them in event time, hold them constant in dollars, and then you track what the effects have been.”

The Strata Policy study has been the subject of some debate in policy circles, with a recent blog post claiming major flaws and tying the researchers to the Koch brothers, the conservative heads of Koch Industries. The blog post, which Strata Policy has responded to (here and here), was written by Michael Goggin of the American Wind Energy Association, who has worked for two environmental advocacy groups and a consulting firm supporting the U.S. Department of Energy’s renewable energy programs, according to the AWEA website.

House Bill 332

Neither Hager nor Brock spent much time handicapping the chances for passage of House Bill 332, which passed the House in April but has stalled in the Senate. The bill would freeze current mandate for utilities to buy renewable forms of energy and institute energy-efficiency programs at 6 percent of sales, rather than rising to 10 percent in 2017 and 12.5 percent by 2020. It would also raise the percentage of the mandate that can be met by energy efficiency alone. Currently the cap is 25 percent but will rise to 40 percent in 2021; House Bill 332 would raise it to 50 percent immediately.

The bill also caps the extra cost that utilities can charge customers at $12 per year for residential customers. The charge is currently slated to increase to $34. The allowed surcharges are higher for commercial and industrial customers.

North Carolina is the only state in the Southeast to have a REPS in effect. When the mandate was enacted in 2007 solar was not expected to be a major part of the renewable energy mix due to its cost. But the cost of solar has declined significantly since then, and it has become the major way North Carolina utilities have met the mandate. The cost declines have prompted solar proponents to say that the subsidies are working, while opponents say they are not needed anymore.