Enact the Energy Freedom Act.
Energy costs are one of the largest expenses for North Carolina families. But families in North Carolina do not have the option to utilize third-party power purchase agreements (PPAs) in order to seek cost savings on their energy bills. They may only buy electricity from their utility provider – a regulated monopoly.
The Energy Freedom Act1 is a current proposal in front of the NC General Assembly. It presents an opportunity for citizens to save taxpayer money by purchasing electricity from third parties through a PPA. In a third-party PPA, the customer contracts to buy electricity (usually renewable sources like solar energy) from a third party – not a utility – at a set rate for a number of years. Using PPAs, residential customers can save hundreds, possibly thousands of dollars per year by locking in set rates for renewable energy, providing protections against constantly rising energy bills.
Recently, George Washington University and American University entered into a 20-year agreement with a third party to buy solar power generated at a large solar facility in the northeastern corner of North Carolina at a fixed price. In this case the third party happened to be Duke Energy Renewables (a subsidiary of Duke Energy) even though Washington, D.C. is served by a different electric utility, PEPCO. This long-term arrangement will provide clean electricity that meets over half of both universities’ needs, while lowering their energy costs. American University expects to save $14 million over the term of the 20-year contract.
North Carolina families should be able to enjoy the same type of benefits. For now, state law prevents customers from entering into a similar purchasing agreement – even though North Carolina ranks fourth nationally for installed solar capacity. A third party sales bill could allow customers the flexibility to seek more cost effective options while utilizing indigenous energy sources. Such PPAs are currently allowed in 24 states and only expressly prohibited in five states, including North Carolina.
1 North Carolina General Assembly. HB 245.