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Reforms to Update Costly 40 Year Old Law Advance

Efforts to reform a costly 40 year-old-law advanced yesterday, as House Bill 589: Competitive Energy Solutions for NC was passed out of two House committees and placed on the calendar for a vote. This legislative action is significant to North Carolina’s energy infrastructure, as the outdated Public Utility Regulatory Policies Act of 1978 (PURPA) could ultimately cost North Carolina consumers $1 billion should it not be updated. Due to unfriendly interpretations of the law that were adopted by previous North Carolina Utilities Commissions (NCUC), it is required that qualified facilities in North Carolina producing up to 5 MW of energy be eligible to receive a standard contract with a fixed long-term avoided cost rate for up to 15 years, no matter the needs of the system or actual value of the resource in the marketplace. Unfortunately, these contract prices, combined with today’s low energy price, would force both commercial and residential consumers to foot an expensive bill over the 15 year contract term.

Keeping rates competitive for North Carolina businesses is necessary in order to grow our competitive business climate. As part of the NC Chamber’s efforts to employ an “all-of-the-above” energy strategy across our state, these reforms are critical to strengthening the state’s standing as a leader in renewable energy, while keeping downward pressure on rates for consumers. Reforming PURPA standards will institute fair and balanced policies that will foster competitive rates, greater reliability and a fair rate of return for third party facilities. It is for that reason, I spoke before the House Energy and Public Utilities Committee yesterday to express the NC Chamber’s support for this legislation and the clear benefits these reforms will have on our competitive economy.

In order to meet our state’s growing energy needs and power our competitive economy in the coming decades, we must continue growing North Carolina’s renewable energy resources, while improving operational sustainability and keeping costs competitive. We are thankful the House Energy and Public Utilities and Finance Committees took action to keep costs competitive for ratepayers by passing this legislation out of both committees and placing it on the calendar for a vote. This leadership is integral to advancing a forward-thinking, “all-of-the-above” energy strategy in North Carolina and we encourage the House to pass this legislation.

Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber