This is a developing story and will be updated this week. This post has also been updated with comments from Duke Energy.I t’s a strange day indeed when the Americans for Prosperity, Duke Energy and the NC Sustainable Energy Association support the same bill.
But that’s what happened in the House Energy and Public Utilities Committee today, which introduced a new version of HB 589 — 20 pages of dense jargon that only a utility lawyer could love. While there’s still a lot of deciphering of the bill language to be done, essentially the measure would lift several restrictions on the proliferation of solar power in North Carolina while still protecting the utilities’ bottom line — sometimes at the customers’ expense.
Rep. Dean Arp, a Republican from Union County, co-sponsored the bill. “This is a fundamental shift in energy policy in North Carolina,” he told the committee, cautioning, “It’s a very, very complicated bill.”
“It’s a major step forward in energy policy,” said Rep. John Szoka, a co-sponsor and Cumberland County Republican. “It will make sure North Carolina remains competitive in the global economy, and is a leader in renewable, reliable cleaner solutions.”
The most striking provision would legalize third-party leasing of solar power, with utility commission approval. This would open the marketplace to small solar providers to provide rooftop systems. The bill’s success could be instrumental in a court case currently being weighed by three judges on the state appellate court. As NCPW reported in March, NC WARN and Duke Energy are at odds over the nonprofit’s right to sell or lease — depending on the semantical argument — solar power, even in minute amounts. The judges have yet to rule on the case.
Their decision could be irrelevant if HB 589 becomes law. As long as NC WARN gets utility commission approval, it could continue to sell power via a very small, 5.25-kilowatt system on the roof of Faith Community Church in Greensboro.
Under Szoka’s proposal, the solar developer would own the solar panels and lease them to the homeowner or business owner for a monthly fee, as long as the fee is not directly tied to the amount of electricity generated by the solar panels. NC WARN was charging the church based on electricity usage. The property owner, in exchange, will get electricity from the panels, which will reduce the power bill from Duke Energy.
Charlotte-based Duke Energy supports the proposal because it’s structured as a financing arrangement, not as a direct sale of electricity to a Duke customer by a third party, said Duke spokesman Randy Wheeless. Duke customers have had a similar leasing option in South Carolina since 2015.
Similar third-party provisions were floated in a bill in 2015, but even with bipartisan support, the legislation died in committee and never made it to a vote.
That was two years ago. Since then, even with the legal reins tightened, North Carolina has become a leader nationwide in solar capacity. There are dozens of solar projects undergoing environmental review, and dozens more that have passed muster. Solar farms checkerboarded fields across the state.
At one page, the original HB 589 was merely a placeholder for the committee substitute. It released just yesterday, after nine months of negotiations among “stakeholders,” although those groups were not named. (Szoka said the bill’s release was delayed because of a death in his family.)
The complexity of the legislation and the lack of time to consider it, concerned Rep. Pricey Harrison, a Guilford County Democrat. “I’m worried about transparency,” she told the committee. “I saw the bill for the first time yesterday afternoon.”
The bill has other shortcomings. The Sierra Club and the Southern Environmental Law Center both have taken neutral positions on the legislation, based on several concerns, including those regarding net metering. Under net metering agreements, if rooftop solar customers generate more energy than they use, they can add that power back to the grid and receive a credit from the utility on their monthly bill. Under HB 589, customers who do this could be charged extra fees. Or the utilities could reduce their net metering rates, thus lowering the credits customers receive.
In the win column, the bill does calls for an energy storage study to determine if renewable energy can be contained in batteries. This would provide a stable source of renewables, regardless of whether the sun is shining or the wind is blowing.
“Nothing would make me happier,” said Rep. Jeff Collins, a Republican from Nash County, who has opposed requirements in the Renewable Energy Portfolio Standard, “than not to refer to solar and wind as intermittent energy.”
The bill also received a favorable report from the House Finance Committee. It could now go to the full House for a vote.