Passage of the Renewable Energy Portfolio Standards (REPS) in North Carolina in 2007 contributed to North Carolina’s electricity rates rising more than twice as rapidly as national and regional averages.
An examination of the data shows that in the six years prior to 2007, North Carolina’s electricity rates rose far slower than the national and regional averages, but after 2007 that trend was reversed. From 2008 to 2014, North Carolina’s electricity rates climbed twice as fast as its regional neighbors and nearly two and half times more swiftly than the U.S. average.
House Bills 332 and 760, already passed by the NC House, would freeze the state’s renewable mandate at its current rate of 6 percent, preventing it from rising to 12.5 percent by 2021 and burdening households with even higher electric bills.
From 2001 to 2007, North Carolina’s average electricity rates grew at a pace of 19 percent, well below the national average of 25.2 percent and the Southern Atlantic region’s 29.9 percent. From 2008 to 2014, the pace of national average and Southern Atlantic average electricity rate increases dropped dramatically. North Carolina, straddled by the REPS enacted in 2007 however, did not enjoy the same rate slowdown. As a result, North Carolina’s average electricity rates rose by 17.1 percent, well over twice as fast as the national and Southern Atlantic averages grew during that time.
The state’s renewable requirements creates a particularly harsh burden on North Carolina’s poorest households. Rising electric bills disproportionately harm low-income households who spend a larger share of their income on utility bills.
Moreover, rising energy costs impose a growing burden on businesses, causing them to cut back on job creation and wages. And as North Carolina’s electricity rates become more expensive relative to other states, our state becomes less attractive for business investment and job growth.
States such as Kansas, Ohio and West Virginia have recognized the negative toll imposed by their renewable energy mandates and recently froze or eliminated their requirements.
It’s time for North Carolina lawmakers to join these states and ditch our state’s renewable energy mandate and provide low-income households relief from rising utility bills. Doing so would also make North Carolina more competitive for job and investment growth. At minimum, it is time to freeze the mandate and more closely examine its real costs.
Civitas intern Ethan Powell contributed the research for this article.
Data obtained from:
U.S. Energy Information Administration, Electricity Data Browser; available online at: http://www.eia.gov/electricity/data/browser/#/topic/7?agg=0,1&geo=vvvvvvvvvvvvo&endsec=vg&linechart=ELEC.PRICE.TX-ALL.A~ELEC.PRICE.TX-RES.A~ELEC.PRICE.TX-COM.A~ELEC.PRICE.TX-IND.A~ELEC.PRICE.SAT-ALL.A~ELEC.PRICE.DE-ALL.A~ELEC.PRICE.DE-RES.A~ELEC.PRICE.DE-C