Why the Energy Bill Matters | Eastern North Carolina Now

   Publisher's note: The article below appeared in John Hood's daily column in his publication, the Carolina Journal, which, because of Author / Publisher Hood, is inextricably linked to the John Locke Foundation.

    RALEIGH     In a legislative session featuring proposals to rewrite the tax code, take important next steps on regulatory reform, give parents more school choice, and restructure the state's transportation and Medicaid programs, Rep. Mike Hager's idea of putting a time limit on North Carolina's renewable-energy mandate might seem comparatively inconsequential.

    Although the bill is sometimes called a "repeal" of the 2007 mandate that electric utilities buy solar energy and other costly sources, Hager's legislation was a compromise. It actually allowed the mandate -- and thus its effect on our monthly electric bills -- to grow over the next few years, not shrink. It also authorized a study commission to examine the issue in greater detail. What the solar industry and allied groups objected to was the provision that by the beginning of the next decade, the public would no longer be compelled to subsidize their industry by paying electricity surcharges.

John Hood
    In other words, a special-interest group is trying to use its political clout to preserve its stream of politically obtained largesse. The matter is really not much more complicated than that, although opponents of Hager's bill have spent the past several months trying to make it so -- and apparently snookering a few conservative lawmakers in the process.

    When the energy bill creating the renewable-energy mandate was enacted in 2007, proponents sold it primarily as a means of combating air pollution and global warming. Given that North Carolina's air-quality trends had been improving for decades and its emissions were too small to influence the world's climate, however, the legislation was essentially symbolic as an environmental measure back in 2007. Today, with America's carbon-dioxide emissions declining as the power grid transitions to an abundance of low-cost natural gas, North Carolina's "blow, glow, and show" mandate is even less connected to reality.

    Unless, of course, you happen to be in the business of importing solar panels, installing solar panels, or marketing land to those who install solar panels. To you, the mandate isn't symbolic at all. It's cash in your pocket.

    Although the cost of solar energy has come down since 2007, so has natural gas. According to the U.S. Energy Information Administration, the full cost per megawatt-hour of electricity produced by a new natural-gas plant is between $66 and $105, depending on the type of plant. The full cost per-megawatt-hour of electricity produced by a new solar-power facility is $144.

    The solar industry disputes its lack of cost-competitiveness, arguing that alternative calculations place its product closer to that of its non-mandated rivals. But that's the point, isn't it? If North Carolina ratepayers won't pay more for solar, then there's no need to mandate its purchase.

    Stripped of its political camouflage, the solar-power industry is almost entirely a creation of government policy. While nearly all types of electricity generation benefit from some federal tax or expenditure policy, solar's reliance on political patronage is way off the charts. The federal subsidy for solar amounts to nearly $800 per megawatt-hour, vs. about $3 for nuclear and less than $1 for natural gas.

    Tax credits and grants cover a large chunk of the cost of building a solar farm. Then, in states such as North Carolina, government regulations require utilities to buy the resulting electricity production. Obviously this is a sweet deal for solar companies. What is not so obvious is why the rest of us should be compelled to finance their sweet deal.

    I began by discussing consequences. I'm not going to claim that if North Carolina's electricity mandate becomes permanent, our economy will be devastated. It won't. We'll pay higher electric rates than we need to, but they won't soar. My chief concern, ironically, lies in symbolism.

    The mandate has no quantifiable environmental benefits. Knowing this, its defenders resulted to fanciful estimates of job creation and consumer benefit. They used the same models, and even the same terminology, that the Obama administration employed to sell its silly stimulus package. If you truly think that digging a hole near your right foot and piling the dirt near your left foot results in a pile of previously nonexistent dirt, you'll be easily bamboozled by such economic malpractice.

    But conservative lawmakers are supposed to know better. Whose "job years" scheme will they fall for next? That's my real concern, and why I hope cooler heads will prevail in the coming weeks.
Go Back


Leave a Guest Comment

Your Name or Alias
Your Email Address ( your email address will not be published)
Enter Your Comment ( no code or urls allowed, text only please )




It's not about Rs vs. Ds. It's statism vs. freedom. The Daily Haymaker Guest Editorial, Editorials, Op-Ed & Politics Stolen Identity Tax Refund Fraud Widespread


HbAD0

Latest Op-Ed & Politics

most voters think EU officials not doing a good job on illegal immigration
Be careful what you wish for, you may get it
Come from behind by GOP candidate is a blueprint to 2024
Biden spending and energy policies to blame
Tuberculosis carried by illegal invaders has already infected Texas cattle

HbAD1

Sen. Ted Cruz (R-TX) said this week that the only campaign promise President Joe Biden has delivered on as president is the complete dismantling of the U.S. southern border.
Hamas is reeling after losing two of their most cherished leaders on the same day: military commander Saleh al-Arouri, and Harvard President Claudine Gay.
President Joe Biden’s brother told the Internal Revenue Service that Hunter Biden told him he was in business with a “protege of President Xi,” referring to the leader of China, according to notes by an IRS investigator that were divulged during a congressional interview of Jim Biden.
Gov. Roy Cooper seeks a temporary restraining order to block a law changing the composition of the State Board of Elections.
X owner Elon Musk mocked a news segment from ABC News this week that promoted President Joe Biden’s talking points about the Democrat-led Senate’s failed border bill, which critics and many experts have said would make the situation on the border worse.
That’s the question Marguerite Roza of Georgetown University’s Edunomics Lab sought to answer in a recent webinar on the topic.

HbAD2

The University of Florida has fired all of its diversity, equity, and inclusion (DEI) employees and shut down its DEI office.

HbAD3

 
Back to Top