Op-Ed: The North Carolina Energy Security and Affordability Act is Good for Consumers
By Kevin Doyle
North Carolina is growing—with over 600,000 new North Carolinians moving to the Tar Heel State over the past five years. And as is almost always the case, driving that population increase is economic expansion. North Carolina is a top state for manufacturing and business, and many companies are looking to come to or expand in North Carolina, bringing with them tens of thousands of high paying jobs and further cementing the state’s status as an economic powerhouse in the South.
Accompanying North Carolina’s population and economic growth is an ever-accelerating need for more energy—especially electricity. Electricity demand has remained relatively flat for decades, but with the expansion of advanced manufacturing, data centers, and a renewed push to produce American-made products, electricity demand in the state is growing and is expected to increase significantly.
In order to continue to provide affordable and reliable electric service to families and businesses and support the need for new “always available” baseload electricity generation and the infrastructure needed to power more homes, schools, hospitals and manufacturing and tech facilities, electric companies are going to need to be able to build things more quickly and as inexpensively as possible.
Fortunately, the legislature is addressing this very issue, and a bill has already passed the Senate overwhelmingly on a bipartisan basis. Senate Bill 261, now being considered in the House, will modernize practices regulating electric companies at the North Carolina Utilities Commission.
The provisions in SB 261 have the potential to reduce baseload generation project costs by updating policies that allow electric companies to recoup financing costs during the construction process, rather than waiting to recover these costs after all construction is complete. Since many projects take a number of years to build, this practice will reduce the amount of debt electric companies have to carry—making it cheaper and faster for companies to build—saving customers billions of dollars.
Importantly, SB 261 will keep North Carolina moving in the direction of developing cleaner electricity generation resources by ensuring that the Utilities Commission continues to develop a plan along with the electric companies and other stakeholders to achieve emissions reductions. The bill maintains the least cost resource planning provisions in current law/rules that protect consumers from unnecessary cost increases; and requires that any resource changes improve reliability and resource adequacy of the existing electricity grid.
For the first time in decades the United States is experiencing substantial growth in electricity demand. States that adopt policies that allow electric companies to most swiftly and affordably respond to that demand will be in the best position to reap the rewards of economic growth.
It is important that North Carolina's elected officials balance opportunities for economic growth and jobs with protecting utility customers from volatile rate increases. Legislation similar to SB 261 has passed in states like South Carolina, Georgia, Florida and most recently in Arkansas. Passing SB 261 will keep North Carolina on par with its competitors and secure investments in the state’s energy infrastructure, creating a positive ripple effect on the economy and quality of life for North Carolinians while still maintaining the Utility Commission’s strong regulatory oversight over electric companies.
Kevin Doyle is the Southeast Director for Consumer Energy Alliance
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