With this year’s North Carolina legislative session winding down, there remain several key pieces of legislation that deserve a final vote. One in the Senate stands out more than any other: the NC Energy Ratepayers Protection Act, a House-passed bill that would repeal North Carolina’s renewable energy portfolio standard (REPS).
Signed into law in 2007 by Gov. Mike Easley, REPS is a government mandate that forces utilities to use varying amounts of renewable energy. Publicly owned companies must generate 10 percent of total electricity from renewables by 2018, while privately owned companies must generate 12.5 percent by 2021.
This may sound relatively harmless, but the impacts on our state’s electricity prices have, and will continue to be, anything but. Wind and solar, both of which are favored by the REPS, can be more than double the cost of traditional energy sources like natural gas. By forcing us to use more of them, the REPS forces us to pay more for our electricity.
Given these realities, a number of recent studies estimated the economic costs of our state’s REPS. They show that North Carolinians have cause for concern.
The most recent study is from the Institute of Political Economy at Utah State University. Researchers estimated REPS will raise our annual electricity costs by nearly $150 million by 2020, with the commercial sector taking the biggest hit.
Similarly, in a March 2015 report, the N.C. Department of Energy and Natural Resources noted that North Carolina’s electricity rates have increased more than 2.5 times the national average increase since 2008, one year after REPS was signed into law.
It’s no secret that North Carolina’s manufacturing industry has been decimated over the past decade. Arbitrarily increasing business costs through government energy mandates only makes things worse.
There’s also the matter of residential electricity costs. By forcing consumers to use more expensive renewable energy sources, the REPS drives our electricity bills higher. In addition, the REPS is extremely regressive, inflicting the greatest harm on our state’s poor.
According to Gene R. Nichol, director of the former Center on Poverty, Work and Opportunity at UNC Law School, poorer households are spending an ever-greater portion of their incomes on electricity. By imposing higher electricity prices on low-income individuals, REPS makes it increasingly difficult for them to make ends meet.
REPS advocates dismiss all of these harmful effects by pointing to its supposedly offsetting benefits. But these claims are often overstated.
For one, replacing large swaths of our electricity grid with renewable energy sources is simply impractical. By way of example, consider how much land wind and solar farms would need in order to generate our state’s electricity.
According to the John Locke Foundation, wind turbines require 1,364 times more land than natural gas facilities, while solar requires 318 times more. All told, 1,000 megawatts of electricity (roughly the amount needed to power the population of Charlotte) from wind would require more land than Raleigh, Wilmington and Fayetteville combined. That just won’t work.
We applaud state Rep. Chris Millis and others in the House of Representatives for fighting to repeal North Carolina’s REPS. It’s now time that state Senate leaders do the same. The REPS is another government mandate that harms families and businesses in our state. Repeal should be a no-brainer for lawmakers concerned about the well-being of their constituents.
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