North Carolina Renewable Power Mandate Pushing Electricity Prices Up

Published January 28, 2014

North Carolina consumers are paying a steep price for the state’s renewable power mandates, according to U.S. Energy Information Administration data. In North Carolina, electricity prices have risen 65 percent faster than the national average since the state imposed renewable power mandates in 2007.

Under the 2007 law, investor-owned utilities must generate 12.5 percent of their electricity from renewable sources by 2021. Electric co-ops and municipal utilities are required to get 10 percent of their electricity from renewable sources by 2018.

Sharply Rising Prices
Since 2007, U.S. electricity prices have risen 10.8 percent, but North Carolina electricity prices have risen 17.8 percent.

Notably, the increase in North Carolina electricity prices masks an even faster rise in electricity costs. Federal taxpayers (including North Carolinians) provide substantial subsidies to renewable power producers, most notably through the wind power production tax credit. These additional costs are hidden, and are not reflected in the EIA retail price data.
Directly Traceable to Renewables
The increasing generation of costly renewable power directly raises North Carolina electricity costs. During testimony last year before the Ohio Senate Public Utilities Committee, Andrew Ott, senior vice president for markets at the grid operator which which coordinates electricity transmission in 13 states, testified it costs at least double or triple as much to deliver wind power to electricity consumers as it does to deliver conventional power. These renewable power cost premiums apply in North Carolina and throughout the nation.

Household Finances Hit Hard
The rapid increase in electricity prices is imposing real financial hardship on North Carolina families. Had North Carolina electricity prices risen at merely the national average since 2007, North Carolina electricity consumers would have saved over $4.2 billion in electricity costs. Averaged out over North Carolina’s 3.7 million households, the average North Carolina household has already paid an extra $1,135 in electricity costs (approximately $190 per household per year) beyond what each household would have paid if North Carolina electricity prices rose merely at the same pace as the national average since 2007.

James M. Taylor ([email protected]) is managing editor of Environment & Climate News.