Governor-elect Pat McCrory will make significant decisions on energy issues, especially in year one of his term. These choices will shape our energy future and have a direct impact on North Carolinians and our environment. But given McCrory’s 29 years at Duke Energy, will he show predilection for the energy industry or will he ensure full deliberation and consider what’s good for all of us?
Here’s what’s likely on tap for next year for the Governor-elect.
Utilities - Among his first actions will be the appointment of three commissioners to the NC Utilities Commission (NCUC) mid-year, including the chairperson. Chairman Finley and Commissioners Culpepper and Allen’s terms expire on June 30th. Finley and Culpepper were first appointed by Governor Easley and Allen was appointed by Governor Perdue.
McCrory will also select a new Executive Director to the Public Staff when Robert Gruber’s fifth term ends next year (he already said he will retire). The new ED will be tasked with protecting North Carolina consumers in several cases. These include: the already filed Progress Energy rate hike request (14% increase), the impending one from Duke Energy which the company recently delayed filing until 2013 and any action that could result from the review of the less than kosher Duke-Progress merger.
This summer NCUC hired a special investigator to examine the Duke-Progress merger after the fast and furious firing of Progress’ CEO one day after the merger was official. Thanks to watchdogs and members of the news media, documents that were attempted to be withheld as trade secrets were released as part of the investigation. The guilt is simmering – $2.2 billion in planned capital investments for Progress’ problem-ridden nukes were withheld from merger proceedings. Was Duke waiting for more favorable NCUC Commissioners to be appointed before it revealed how these costs would impact rate payers? We await the investigator’s report (timeline unknown) and the reaction from the NCUC and the Public Staff.
Finally, there is a petition before the Utilities Commission filed by NCWARN to review Duke’s rate allocation method. Duke and Progress use different methods, with Duke’s approach not favoring residential and small businesses. The UNC School of Law Center on Poverty, Work and Opportunity, amongst others, are supporting the petition.
Natural Gas Drilling – The Mining and Energy Commission (MEC) is not scheduled to produce a regulatory framework to begin hydraulic fracking in NC until fall 2014. The Governor-elect shouldn’t try to move this along any faster given the implications to our water supply. The MEC, which only recently began deliberating, is led by first-term Republican Lee County Commissioner Jim Womack, a public supporter of fracking who believes concerns about water contamination are “overblown.”
Offshore exploration – Recalling McCrory’s support for and media campaign to “unleash” offshore oil and gas resources, action on this issue is likely, however much of it depends on how and when the Obama Administration moves forward. In the meantime, Mr. McCrory’s should take stock in the assets the tourism and fishing industries bring to our state vs. the assets and liabilities which could be derived from offshore drilling:
$3 Billion – Approximate annual revenue generated from NC’s beaches and inlets according to the 2011 North Carolina Beach and Inlet Management Plan Final Report.
$12 Billion – Estimate of the maximum oil and gas royalties North Carolina could receive over the lifetime of our offshore reserves according to Governor Perdue’s Scientific Panel on Offshore Energy’s near-final report.
39,000 – Number of jobs directly supported in our coastal counties from beaches and inlets according to the 2011 North Carolina Beach and Inlet Management Plan Final Report.
6,700 – Number of jobs estimated to be created in NC by offshore drilling, according to the Southeast Energy Alliance in 2009.
$77 Million – Value of commercially-caught fish in NC in 2009, according to the state Division of Marine Fisheries.
$40 Billion – BP’s own estimate of its cost for ongoing clean-up, compensation claims and fines for the oil spill disaster in the Gulf of Mexico.
During the past weeks, many voters have said they are willing to give McCrory a chance. But yesterday’s transition team announcement – including those who do not believe that climate change is real – is cause for great pause. And given the Governor-elect’s relationship with Duke Energy, he’ll need to go out of his way to avoid favoritism. We’ll soon see what’s “unleashed” – the power of the people or the power of the energy industry. Since the energy industry couldn’t put Mitt Romney in the White House, my bet is on the people.