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NC ratepayers could pay the steep price of Cooper’s cronyism

Donald van der Vaart’s Carolina Journal column explained how Gov. Roy Cooper undermined a key electricity reform by pressuring Duke Energy on behalf of the solar industry.

House Bill 589, passed in 2017, was a grand compromise that gave solar energy facilities a guaranteed full seat at the table for electricity provision in this state while addressing some of the problems with how North Carolina implements the federal Public Utility Regulatory Policies Act of 1978 (PURPA).

Before HB 589, North Carolina ratepayers were faced with the nauseating prospect of overpaying for electricity by more than a billion dollars. The law seemed poised to bring about “an estimated $850 million in savings on the cost of future solar power,” van der Vaart wrote.

That was before Cooper intervened:

The bad news is that WBTV reported that, months later, Cooper pressured Duke to sign a settlement with the solar industry that gutted much of the customer relief included in H.B.589. The pressure was applied after the solar industry claimed Duke’s interpretation of the new law was preventing many projects from being grandfathered under the old over-priced rate. In other words, the industry wanted as many projects as possible to be exempt from the new law, even though the law would reduce the bills for Duke customers.

As WBTV reported, records show the CEO of North Carolina’s largest solar company, Markus Wilhelm, reached out to Cooper, asking him to call “Duke leadership” to bring about a settlement of the dispute. According to WBTV, Cooper then used a critical permit that Duke needed for the Atlantic Coast Pipeline as leverage in the deal between Duke and the solar companies.

Under the Cooper-brokered solar settlement, Duke must allow about 240 more solar plants to interconnect and receive the older, higher rates. Based on overpayments in the past, these 240 projects could cost customers more than $250 million in additional bills. Translation: higher mandated profit margins for the solar industry equal higher electricity rates for us.

What hope is there to offer beleaguered ratepayers? Not much other than this, as van der Vaart concludes:

So, now we wait for results of the legislature’s investigation into questions surrounding both the solar settlement and the $57.8 million discretionary fund attached to the ACP permit. If the solar settlement was signed under duress, the legislature should nullify the agreement. In the meantime, Duke should be thanked for resisting efforts to unnecessarily raise our electricity rates.

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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