Amid a landscape of soaring utility costs and extreme weather, North Carolina’s Gov. Josh Stein has rejected a controversial legislative proposal aimed at reshaping the state’s energy future. This decision comes as state researchers warn of potentially staggering increases in fuel costs if interim carbon reduction goals are abandoned.
Gov. Stein vetoed Senate Bill 266, which proposed eliminating an interim carbon dioxide reduction target initially set by 2021’s House Bill 951. “This summer’s record heat and soaring utility bills has shown that we need to focus on lowering electricity costs for working families — not raising them,” Stein stated in his veto message.
The removal of this target could pave the way for Duke Energy to increase reliance on natural gas plants, as opposed to expanding renewable energy sources like solar and wind. This shift could result in North Carolinians being exposed to volatile natural gas markets, potentially leading to increased electricity rates, according to a memo from N.C. State University researchers.
The analysis from N.C. State highlighted that fueling these natural gas plants could cost as much as $23 billion through 2050, or approximately $13 billion in present-day terms. “These additional fuel costs are borne directly by customers,” the researchers noted, emphasizing the importance of maintaining the interim goal to protect consumers from market fluctuations.
On the legislative side, the Public Staff, representing ratepayers, had reported potential savings of $13 billion through 2050 if the interim target were removed, assuming stable natural gas prices. However, if prices rise, these savings could quickly disappear, according to Joseph DeCarolis, a professor at N.C. State.
Impacts of Different Gas Projections
The N.C. State team assessed various natural gas price projections, revealing that high prices could significantly impact the cost-effectiveness of removing the interim target. Under a high-cost scenario, the total energy system costs could rise to $146 billion by 2050.
While proponents of the bill argue it could save North Carolinians $15 billion under certain conditions, critics, including environmental groups, argue that such savings are speculative and risky. Chris Herndon from the N.C. Sierra Club called on Stein to veto the bill, warning of a $23 billion energy burden on families.
Renewable Energy Advocates Push Back
Renewable energy advocates like Matt Abele of the N.C. Sustainable Energy Association stress the importance of the interim target for ensuring a balanced energy mix. Without it, North Carolina risks under-investing in renewable resources.
State law mandates that the Utilities Commission consider affordability, reliability, and carbon dioxide reductions in energy planning. Removing the interim target could complicate Duke Energy’s path to achieving net-zero emissions by 2050.
Senate President Pro Tempore Phil Berger and other Republican leaders, who hold a supermajority in the Senate, have expressed their intent to override the veto, citing bipartisan support for the bill. Meanwhile, environmental groups continue to urge a focus on renewable solutions to secure North Carolina’s energy future.
