The Pulse

Opposed by many, loved by (very) few, energy bill in Senate committee today, with costs to ratepayers still unclear

By: - August 10, 2021 8:45 am

This is a developing story. Look for updates after today’s Senate Agriculture, Energy and Environment committee meeting on the energy bill. The meeting begins at 10 a.m. and will be livestreamed.

As a Senate committee prepares to hold what is expected to be a heated meeting today about a controversial energy measure, the true cost to ratepayers of House Bill 951 is still unclear.

An analysis conducted by Walmart and obtained by Policy Watch, shows a cumulative rate increase of 41% over the next decade and 53% by 2036.

The Carolina Utility Customers Association, a trade group for industrial ratepayers, estimated the cost increases would add up to 50% over 10 years, based on the bill’s allowance of 4% per year. Large industrial and commercial customers would see their energy bills increase upward of $5 million, to even $10 million a year, depending on amount of energy usage and size of the plant, according to CUCA figures.

At the heart of the disagreement are the costs used to calculate the increase. 

Duke Energy spokeswoman Grace Trilling Rountree called CUCA’s claims “exaggerated” and “not supported by the [utilities commission] Public Staff analysis.”

CUCA’s figures “assume rate impacts related to spending that has not been proposed by Duke Energy or authorized by the North Carolina Utilities Commission,” Rountree said.

Kevin Martin, associate executive director of CUCA, declined to comment ahead of today’s hearing. He plans to provide public comment then, he said.

The Public Staff, a state agency that represents ratepayers in matters before the Utilities Commission, has provided documents showing rates would be far lower. Industrial and commercial customers would see cumulative increases ranging from 11% in 2030 to 31% in 2035.

The 1.3 million Duke Energy Progress residential customers would pay a cumulative increase of $11 to $18 in monthly bills by 2030 and 2035, respectively, according to an analysis by the Public Staff of the NC Utilities Commission. Another 1.9 million Duke Energy Carolinas residential customers would pay an extra $12 to $24 each month by those dates.

However, footnotes on public staff analysis show its figures exclude costs for many provisions that are in the energy bill because they are “infeasible to quantify,” such as multi-year ratemaking.

If the bill becomes law, though, those costs could then be included in rates. And then the rates could increase — calculations the customers and their advocates are accounting for.

Multi-year ratemaking allows the Utilities Commission to lock in customer costs for three years, rather than requiring Duke Energy and Dominion Energy to file annual rate cases. This type of ratemaking is supposed to prevent utilities from “over-earning,” by refunding customers some amount of money if the utilities’ earnings are higher than allowed by the Utilities Commission. 

But the converse is also true: If the utilities don’t hit their projections, they can charge ratepayers to compensate for the loss.

The bill could change the arc of the state’s energy policy for at least a decade. It would lock in natural gas as a replacement fuel for at least one, and possibly two of Duke’s coal-fired power plants.  Natural gas is the main source of methane emissions. Yesterday international scientists issued a key climate change report showing that emissions from methane, along with carbon dioxide, must be sharply reduced in order to slow the global climate crisis.

The bill also would strip some authority from he NC Utilities Commission, which regulates Duke Energy and other energy providers. The measure would allow Duke Energy to incur expenses of up to $50 million for an early site permit from the Nuclear Regulatory Commission for siting of a small reactor at an undetermined location in North Carolina. 

It narrowly passed the House in a midnight vote. If the Senate passes the bill without changes, it will go to the governor, who will likely veto it. It’s unclear if there are enough votes to override the veto.

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Lisa Sorg
Lisa Sorg

Assistant Editor and Environmental Reporter Lisa Sorg helps manage newsroom operations while covering the environment, climate change, agriculture and energy.