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May 8th, 2013

Swine Waste Requirement Up For Repeal in North Carolina

by Andrew Price, President & COO

Ok, swine waste is only a very small piece of North Carolina’s so-called Renewable Portfolio Standard (RPS). Poultry waste is also on the chopping block (as well as wind, solar and hydro), but chickens are far less photogenic than Babe. Last week a North Carolina Senate committee resurrected an effort to repeal the State’s renewable energy mandates. The Senate committee effort comes a week after a House committee killed a similar repeal effort.

Similar to 29 other states, North Carolina implemented a requirement that a portion of all electricity provided to end-users within the State needed to include defined percentages of qualifying renewables. Renewable Portfolio Standard laws in most of these states have been tested by repeal or modification efforts over the past 12 to 24 months including Maine, Pennsylvania and Connecticut.

Opponents of the state RPS requirements argue that they increase electricity costs at the expense of jobs and industrial competitiveness. Supporters counter that the renewable energy mandates create new green jobs and will save money in the long run by providing a hedge against volatile fossil fuel prices.

In North Carolina the usual technologies currently qualify for RPS treatment including: solar, wind, certain hydropower, certain biomass, landfill gas, and certain combined heat and power (CHP) facilities. The RPS law has helped make North Carolina a solar power, ranking 5th in the United States in 2012 with 132 MW installed, according to the Solar Energy Industries Association. 

In 2013, all Investor Owned Utilities in North Carolina, like Duke Energy, are required to meet 3% of retail sales with qualifying renewable sources. The requirement escalates over time until hitting 12.5% in 2021. Electric cooperatives and municipal utilizes have slightly lower standards. The costs (or savings) incurred by Utilities in complying with the law are passed on to consumers in the form of higher (or lower) rates.

Many states carve out technology-specific targets within the overall requirement. In North Carolina, 0.07% of the 2013 overall requirement must come from solar, 0.07% from swine waste and 170,000 MWh from poultry waste. Interestingly, the solar requirement can be met with solar electric or solar thermal. By 2021 the technology specific carve-outs increase to 0.2% for solar, 0.2% for swine waste and 900,000 MWhs for poultry waste.

It is a safe bet that many North Carolina hog and poultry farmers, some of whom may have already invested money into systems to turn animal waste into energy, will turn out to oppose the repeal efforts.

Both the Senate and the House repeal efforts in North Carolina have focused on freezing renewable content requirements at current levels or gradually phasing them out over time. In other states, the battle is whether very large hydroelectric and/or biomass projects should qualify as renewable in state statutes. 

Without a federal mandate, the battle over minimum renewable energy portfolio standards will carry on at the state level. A win for renewable energy champions in Colorado, which is considering doubling its RPS requirement for electric-co-ops, may be offset by a loss in a state like North Carolina if a repeal is ultimately successful. Renewable energy investors looking for certainty in incentives, as well as ratepayers looking for savings, may both have to suffer through countless political battles as RPS laws look set to expand and contract across the US.

Swine photo from http://www.hooberfeeds.com/images/slider/swine.jpg

Tags: North Carolina, Duke Energy, Renewable Portfolio Standard, RPS, Colorado, Maine, Pennsylvania, Connecticut)

 

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