This group brings together the best thinkers on energy and climate. Join us for smart, insightful posts and conversations about where the energy industry is and where it is going.

Post

In North Carolina, Walmart and Other Corporate Giants Call for Clean Energy Choices

By Greg Andeck

https://www.flickr.com/photos/walmartcorporate/5250475208/Leading national companies in North Carolina want more choice and competition when it comes to energy, including where it comes from and who they buy it from. That’s the message recently delivered to the North Carolina legislature in a letter signed by 10 corporate giants in the state.

The list of companies calling for action is impressive, including:

  • Some of the country’s largest retailers – Walmart, Lowes, Target, Family Dollar, and Macy’s
  • Major manufacturers – Volvo, textile giant VF, Unilever, and New Belgium Brewing
  • Agriculture commodities giant Cargill

North Carolina’s current law prohibits companies from contracting with energy providers other than utilities. It’s easy to understand how that law squashes consumer choice and competition.

The 10 companies want the ability to buy clean, renewable electricity directly from providers other than utilities like Duke Energy and Dominion. Greater choice in the North Carolina electricity market would provide a wide range of benefits. For example, companies and homeowners would be able to lease rooftop solar panels from clean energy providers at little to no upfront cost and lock in long-term, stable electricity rates.

The ability to choose a clean energy provider is commonly known as “third party sales,” and it’s not a new concept. In fact, North Carolina is one of only five states that prohibit companies from selecting where they buy their power.

Fortunately, that may change in the state’s 2015 legislative session. A bill called the “Energy Freedom Act” would nullify the state’s outdated prohibition on third party sales, allowing independent power producers to bypass Duke Energy and Dominion and sell clean energy directly to businesses and homes. As a win-win for the state’s economy and clean energy, the bill’s list of sponsors reflects bipartisan support for energy freedom.

In their letter to lawmakers, the companies said that “the availability of competitive renewable energy choices is also a key factor for many of us when we choose where to do business.”

North Carolina has failed to keep pace with other states on energy choice and competition, and businesses have taken note. Now lawmakers can help the state catch up.

Photo source: Flickr/Walmart Corporate

Discussions

Bob Meinetz's picture
Bob Meinetz on Apr 6, 2015 5:01 am GMT

Greg, we should also be pushing for privatization of roads and bridges, of national parks, of police and fire departments, and of America’s military. Because handing over essential public resources and services to the free market can’t help but increase competition, improve quality, and lower prices. Right?

And corporate giants like Walmart, Lowe’s and Target only act in the public’s best interest. Right?

Wrong.

Electric deregulation fails to live up to promises as bills soar

Not one of the 16 states — plus the District of Columbia — that have pushed forward with deregulation since the late 1990s can call it a success. In fact, consumers in those states fared worse than residents in states that stuck with a policy of regulating their power industries.

An Associated Press analysis of federal data shows consumers in the 17 deregulated areas paid an average of 30% more for power in 2006 than their counterparts in regulated states. That’s up from a 24% gap in 1990.

The idea was to move from a monopoly situation to robust competition for electric customers, with backers promising potentially lower rates in state after state.

http://usatoday30.usatoday.com/money/industries/energy/2007-04-21-electr...

Jim Kennerly's picture
Jim Kennerly on Apr 7, 2015 1:23 am GMT

Nice op/ed, Greg. 

Bob – I agree it’s true that those states did, in 2007, have higher volumetric rates, but it’s also important to remember that rates are not bills – there’s not a 1:1 correlation. Also, a lot of those states had higher rates to begin with than the regulated ones. In fact, some research and analysis I did for fun recently suggested that the opposite is true – that lower rates encourage higher usage by residential customers, even when controlling for the use of electricity for home heating.

Also, it’s important to remember that allowing third party sales is not “deregulation” – it’s just a contract between a company and an individual to supply energy services, similar to an energy services company would for energy efficiency. It’s safe to say North Carolina is not considering restructuring the wholesale end of its power market any time soon. To the point of your national parks example, though, we actually kind of have “deregulated” them – we have subcontracted most of the services in parks to government contractors. Also, most new toll roads are being built and operated by private companies, ostensibly with taxpayer funds. So it’s not unprecedented.

All in all, I think most people would agree that the bill, not the rate, is what customers pay each month, and I think that’s why we’re seeing customers looking at solar, efficiency and other DER, because they know they want to (and can) use less, and it’s getting cheaper to do it.

Mark Tracy's picture
Mark Tracy on Apr 7, 2015 5:55 am GMT

Any derugulation of a monopoly (public or private) allows the monopoly to increase prices because there is a lack of competition. However, allowing entities to buy power from other sources increases competition, recucing monopoly power. The error of your “logic” is that you are confusing privatization with monopoly power.

Get Published - Build a Following

The Energy Central Power Industry Network is based on one core idea - power industry professionals helping each other and advancing the industry by sharing and learning from each other.

If you have an experience or insight to share or have learned something from a conference or seminar, your peers and colleagues on Energy Central want to hear about it. It's also easy to share a link to an article you've liked or an industry resource that you think would be helpful.

                 Learn more about posting on Energy Central »