By Elizabeth Ouzts
The South Carolina House of Representatives just took the first step toward loosening monopoly utilities’ grip on the state’s energy market.
Virginia lawmakers are exploring whether to expand competition in the commonwealth to encourage more renewable energy.
In between the two, North Carolina is taking it slow.
Despite growing frustration across the political spectrum with Duke Energy’s rising rates and meager clean energy plans, there’s no clear path to ending the 115-year-old utility’s monopoly outright.
Experts caution it would be a huge political, technical, and bureaucratic feat, and it wouldn’t guarantee more clean energy or greater consumer power in and of itself. Many say the first step is a comprehensive study to determine how and whether competition would achieve those goals — but even that isn’t imminent in an election year with a part-time legislature.
“We need to do something. It’s time to look at a change,” said Rep. John Szoka, a Republican from Fayetteville who chairs the North Carolina House energy committee. But, he stressed, “what we change would have a huge impact, so we need to be deliberate in what we do.”
‘They’ve just been stonewalling’
Like many states, North Carolina flirted with deregulation at the start of the century, then recoiled. In April 2000, a study commission of legislators and other stakeholders unanimously recommended limited retail and wholesale competition. Then, the California deregulation crisis blew up: Price gouging and speculation on the wholesale market eventually made its way to the retail market. Ratepayers saw rolling blackouts, and their bills double or even triple.
“California imploded,” said Richard Harkrader, the founder of Carolina Solar Energy and a member of the study commission. “People overnight soured on this whole idea of deregulation.”
Charlotte-based Duke has since merged with the state’s other major electric monopoly, Raleigh-based Progress Energy. Today, the company is one of the nation’s largest electric suppliers, with a hand in virtually every electron made, distributed, and sold in North Carolina. It produces the vast majority of the state’s electricity — most of it from coal, gas, and nuclear. It serves about 3.4 million homes and businesses directly, and another 1.6 million by selling electricity wholesale to nonprofit rural co-ops and municipal utilities.
Almost everywhere, Duke controls distribution and transmission; where it doesn’t, it still has a footprint. In the northeast corner of the state, where Virginia-based Dominion Energy delivers electricity and another entity controls transmission, Duke subsidiary Piedmont Natural Gas provides gas service, as it does to about three-fourths of the state’s counties.
With a few narrow exceptions, third-party electricity sales are prohibited; solar companies can’t erect panels and sell the output to anyone other than a regulated utility. And they can’t sell their power unless they’re connected to a grid run almost exclusively by Duke.
Thanks in large part to favorable state rules under the federal Public Utility Regulatory Policy Act, or PURPA, independent solar developers have gained a sizable foothold here. They own the vast amount of North Carolina’s solar power capacity — the second most in the country.
But they and Duke are at loggerheads, with the utility introducing new tests and surcharges for grid connections that have delayed projects from coming online. A 2017 law designed to break the logjam has mostly fallen short: Solar farms are still waiting to connect under the old PURPA scheme, delaying a new competitive bidding program that was supposed to take its place.
“They’ve just been stonewalling,” Harkrader said of Duke. “There’s really not much solar being built now. Most everybody, including my company, are now working outside of North Carolina.”