NC Budget and Tax Center

Senate Budget Takes One Step Forward, Two Steps Back with TVA Settlement Money

Last year, North Carolina’s residents received the good news that the Tennessee Valley Authority had agreed to a settlement with the U.S. Environmental Protection Agency to resolve Clean Air Act violations at a number of TVA coal-fired power plants in Tennessee, Alabama, and Kentucky. As part of this settlement, TVA agreed to provide North Carolina $11.2 million over the next five years for environmental damages associated with the pollution from these plants and earmarked the funds for 14 different categories of projects, including energy efficiency, renewable energy, carbon-dioxide reduction, and pollution mitigation, targeted towards the region most affected by the original emissions—Western North Carolina.

In an improvement over the proposed House budget, the Senate budget actually seeks to spend the settlement dollars in line with the stated intent of the agreement—focused on renewable energy projects (the House earmarked the funds for standard forestry projects) and targeted towards the region most affected (by targeting forestry, the House managed to ensure that virtually none of the settlement funds would flow to the West because almost all of the state’s forestry projects exist in other regions). Specifically, the Senate budget uses this year’s settlement allotment to fund the Biofuels Center of North Carolina, a nonprofit economic development entity located in Oxford and geared towards developing a long-term biofuels industry in the state.  Recent studies have demonstrated that biofuels play an important and growing role in the state’s economy, and the Biofuels Center provides critical support in nurturing this future.

If providing the Biofuels Center with settlement funding is indeed a step forward for renewable energy development, the Senate then takes two steps back by proposing a recurring funding cut equal to the $2.25 million in settlement money transferred to the Center this year.

In effect, the Senate budget gives the Biofuels Center a 50% cut to its recurring appropriation, and then fills the resulting hole with one-time money available from the settlement.  Although the General Assembly may well choose to fund the Center using TVA money in future years, there is no guarantee of long-term support, and as a result, this important tool for economic development and entrepreneurship faces a very uncertain future.  Since nascent industries need careful nurturing over the long-term in order to expand, thrive, and profit, the Senate budget puts the biofuels industry on an equally uncertain path into the future.

One Comment


  1. Jeff S

    June 11, 2012 at 5:15 pm

    Not surprised. If you want a challenge, go find an earmarked payment or trust fund that they are not diverting or outright stealing from.

    Why does the media insist on playing along? If you cut base funding, you have in-effect stolen the extra funds. Everyone knows it, but no one is willing to call them on it. Probably because the other party will do the same thing when they are back in control.

Check Also

A win for seniors and the home health workers who take care of them

Sometimes good news is buried in the fine ...

Top Stories from NCPW

  • News
  • Commentary

On a sultry day last September, Megan Stilley arrived at Lanier Farms, a large swine operation in ru [...]

When North Carolina lawmakers approved what one Republican described as a “historic” investment in r [...]

Lawmakers late last week released two new versions of a judicial redistricting bill, making these th [...]

An omnibus bill alleviating some of the headaches associated with North Carolina’s class size crisis [...]

The General Assembly’s latest mashup legislation is an example of government at its worst In the com [...]

The post Tied up in knots appeared first on NC Policy Watch. [...]

Every day brings new reports that Congress is interested in further whittling away at the programs c [...]

When Congress finally passed a continuing resolution last month allowing the government to re-open, [...]

Upcoming Events

Friday, Feb. 16

12:00 PM

Crucial Conversation – Prof. Peter Edelman discusses his new book, Not a Crime to be Poor: The Criminalization of Poverty in America

Prof. Edelman is coming to the Triangle to mark the 50th anniversary of Durham-based nonprofit MDC. His visit is the first of a series of MDC-sponsored events focused on ways that Southern leaders can work together to create an Infrastructure of Opportunity that shapes a South where all people thrive.”