REPS: North Carolina’s Renewable Energy Portfolio Standard

The Renewable Energy Portfolio Standard (REPS) passed the North Carolina General Assembly with huge bipartisan majorities in 2007.  The legislation states that our state’s utilities must derive an increasing  percentage of their energy mix from renewable/clean resources and energy efficiency programs.

As conservatives, we support market competition and choice when it comes to our economy and various products we buy. However, we have to remember that NC’s electricity market is unlike most other business sectors – it’s highly-regulated, monopoly controlled by our utility. Thus, a goal of the REPS law was to allow limited market competition between clean energy companies and utilities, while developing clean energy resources in communities across our state  plus bring us up to speed on the latest energy technologies. The REPS was designed as a step forward in diversifying North Carolina’s overall energy mix for a more affordable and cleaner energy future.

Repealing or weakening NC’s REPS would take us backward – we support market competition, choice for customers, and new technologies and innovation.

REPS_bill image (2)

NC’s REPS requires electric utilities to derive 12.5% of their electricity from renewable energy and energy efficiency resources by 2021. North Carolina is one of 29 states with similar laws in place.

NC’s REPS requires electric utilities to derive 12.5% of their electricity from renewable energy and energy efficiency resources by 2021. North Carolina is one of 29 states with similar laws in place.

You might think that venturing into diverse ways of generating electric power would cause our monthly utilities bills to increase, but the facts prove otherwise. Monthly REPS charges are nominal (see chart).  In 2014, the REPS made up just 0.004 and 0.008 of the average residential monthly Duke Energy Carolinas and Duke Energy Progress bill, respectively.*

So, for less than a dollar a month, which is the required “cost cap” under the REPS, utility providers are meeting the REPS requirements, all the while, leading to a savings – yes, SAVINGS – for ratepayers, plus additional economic development opportunities and benefits for local communities across our state.  In fact, the REPS policy has resulted in $6.3 billion in positive economic impact for North Carolina’s economy.

According to RTI International & ScottMadden which analyzed filings at the NC Utilities Commission and information from the NC Dept. of Revenue, NC’s REPS will save electricity customers of our state $651 million through 2029. And, since its inception, the REPS has already resulted in $162 million in savings for customers, plus $280.7 million in positive impacts for state and local governments.* By far the biggest beneficiary of the REPS policy are the economically hard-hit rural areas of North Carolina. These communities (Tier I & Tier II counties) have received almost 75% of the $2.6 billion in renewable energy investments via new energy projects built since 2008. **

As so often happens in policy debates and discussions, there are a plethora of opinions and commentaries on this issue.  But, the facts point to a REPS policy that has been good for North Carolina and good for our utilities’ customers.

Sources:

* Economic and Rate Impact Analysis of Clean Energy Development in NC – 2015 Update

** NC Dept. of Commerce 2015 County Tier Designations, published November 26, 2014