Price-Gouging Law Applies to Businesses in Outer Banks | Eastern North Carolina Now

    Publisher's note: The author of this post is Will Rierson, who is an editorial intern for the Carolina Journal, John Hood Publisher.

    A state of emergency in Dare and Hyde counties puts into effect a state law protecting people from price gouging,

    The law halts restrictions for truck drivers delivering supplies to the islands, and customers can get refunds if businesses take advantage of the emergency to inflate prices, the state Department of Justice says. Courts can fine price gougers up to $5,000 per violation.

    Gov. Roy Cooper declared the emergency Thursday.

    A spokesman for the attorney general said consumers should keep lease and insurance agreements in case of an investigation. Victims and witnesses of price gouging are encouraged to report suspected cases.

    A 2006 John Locke Foundation report by senior economist Dr. Roy Cordato said price-gouging laws hurt consumers and businesses in the affected areas.

    "During times of disaster, when markets need to adjust as quickly as possible to changed conditions of supply and demand, price-gouging laws slow the process of recovery and prolong the agony," Cordato wrote.

    A construction crew Thursday accidentally damaged cables supplying electricity to popular tourist destinations on the Outer Banks, local officials scrambled to handle the emergency. Two of three underground power lines were cut during the construction of a bridge connecting Hatteras to the mainland. Tourists were sent home on the old bridge or by ferry.

    Hyde County issued an evacuation order for Ocracoke Island tourists Thursday. Dare County issued its order Saturday.

    The temporary loss of tourists may prove costly to the full-time residents of Hatteras and Ocracoke who rely on their seasonal spending. Many of the restaurants and other businesses serving tourists are only open part of the year, and may have to wait weeks for guests to return.

    Cape Hatteras Electric Cooperative says it has been working to provide power on Hatteras via generators, and it hopes to reintroduce tourists in stages as soon as possible.

    Hyde County reported that the Coast Guard and National Park Service were patrolling the waters off Ocracoke to keep non-residents from docking boats on the island.

    The state ferry service switched to a winter schedule, and only people with proof of residence or emergency service re-entry permits were allowed on board. Ocracoke was effectively quarantined.

    To the north, the NPS governs Cape Hatteras National Seashore, which includes a camping area. Following the blackout, even those visitors not using electricity were sent off the island.

    It could be a couple weeks before power is fully restored, according to reports.