After turning back a political assault on its groundbreaking renewable energy law, North Carolina could soon be a proving ground for a new strategy in the corporate-led war on clean energy -- this one targeting the fast-growing number of homeowners installing solar panels.
Like the last attack on the state's renewables program, this one is led by the American Legislative Exchange Council, an influential group that brings together corporations and mostly Republican state lawmakers to advocate for business-friendly legislation -- activity that has drawn charges of illegal lobbying by the nonprofit. ALEC, whose corporate members include major coal and electric companies, has long fought environmental regulations and initiatives that encourage a shift to cleaner energy sources.
Nowhere has its efforts been more concerted in recent years than in North Carolina, which in 2007 became the first state in the coal-dependent Southeast to require investor-owned electric utilities to purchase or generate an increasing amount of energy from renewable sources.
Last year ALEC teamed up with the Heartland Institute, a conservative think tank that's been a leader in promoting climate science denial, to craft model legislation reversing state renewable energy standards. Americans for Tax Reform, an ALEC member, was also involved in promoting the legislation. Other groups that worked with ALEC to make the case for repealing North Carolina's law included the John Locke Foundation, a think tank founded and largely funded by Republican donor and N.C. budget director Art Pope, and the American Tradition Institute, part of a family of conservative advocacy groups founded and funded by fossil fuel interests.
With the ideological ground readied, bills were introduced this year in both the N.C. House and Senate to roll back the renewables law. Three of the four primary sponsors of the House bill have been active with ALEC, while the primary sponsor of the Senate bill previously worked for Citizens for a Sound Economy, an anti-regulatory advocacy group founded by Charles and David Koch of the Koch Industries oil and chemical conglomerate. The Kochs have close ties to ALEC, as does their company.
But the legislation met resistance from North Carolina's burgeoning renewable energy industry. It was also opposed by rural economic development advocates, who are concerned about the jobs and boost to the tax base that clean energy generation has brought to economically struggling communities, and farmers who have invested in power generation systems fueled by livestock waste, which is classified as a renewable energy source under the North Carolina law.
The controversy resulted in a split in the GOP supermajority-controlled legislature between moderate Republicans, who supported the law because of its job creating potential, and their more ideologically conservative counterparts, who criticize the renewable standard as an interference in the market -- never mind that North Carolina does not have a free electricity market but a regulated monopoly dominated by Charlotte-based Duke Energy, which has been generally supportive of the renewable energy law.
In the end, both pieces of legislation failed to pass either chamber by the deadline for keeping bills alive for the rest of the biennial session. But state Rep. Mike Hager (R-Rutherford) -- a former Duke Energy engineer and ALEC member who led the attack on the renewables law -- told the John Locke Foundation that the fight would continue.
Last week, details emerged on what the next stage of the battle might look like.
ALEC takes aim at the solar boom
With ALEC's annual policy summit set to get underway on Dec. 4, the British newspaper The Guardian published an investigative series about the group based on leaked documents it obtained.
Among the revelations was that ALEC plans to launch what The Guardian describes as "a sweeping new offensive" against renewable energy by blocking state governments from expanding renewable energy programs and the federal government from cutting greenhouse gas emissions.
It also wants to penalize homeowners who install their own solar panels and feed surplus power back to the grid, The Guardian reported:
Further details of Alec's strategy were provided by John Eick, the legislative analyst for Alec's energy, environment and agriculture program.
Eick told The Guardian the group would be looking closely in the coming year at how individual homeowners with solar panels are compensated for feeding surplus electricity back into the grid.
"This is an issue we are going to be exploring," Eick said. He said Alec wanted to lower the rate electricity companies pay homeowners for direct power generation -- and maybe even charge homeowners for feeding power into the grid.
"As it stands now, those direct generation customers are essentially freeriders on the system. They are not paying for the infrastructure they are using. In effect, all the other non direct generation customers are being penalised," he said.
ALEC's anti-solar efforts come as the U.S. solar energy industry is booming. An industry report released this week found that more U.S. homes added solar panels in the third quarter of this year than ever before, with installations up 35 percent from the same period last year.
Sunny California and Arizona top the list of states with the most installations, but coming in third place was North Carolina. While the residential sector is still a small part of the solar market, it is experiencing the strongest growth, in part because of an almost 10 percent drop in the cost of panels since last year.
But the solar boom presents a problem for big utilities. Attending a meeting of financial analysts in New York earlier this year, Duke Energy CEO Jim Rogers said the growing popularity of rooftop panels "is obviously a potential threat to us over the long term," Bloomberg Businessweek reported. As costs come down and battery and power management technology improves, Rogers said, "then we have someone just using us for backup" -- which is exactly the issue ALEC says it plans to address.
Whether Duke Energy had anything to do with ALEC's plan to penalize customers who install solar panels is not clear. The company has been a member of ALEC's energy task force and served as ALEC's corporate co-chair for South Carolina and Indiana. But the documents obtained by The Guardian suggest that Duke Energy let its ALEC membership lapse in the past year, amid mounting pressure to quit the group.
Duke Energy was listed among the companies ALEC targeted as part of its "Prodigal Son" project to lure back the more than 60 corporate and 400 legislative members who left following the controversy over the 2012 killing of Florida teen Trayvon Martin and Stand Your Ground laws, which ALEC helped promote nationwide. However, ALEC's notes for Duke's lapsed membership, dated April 22, 2013, say, "Merged with Progress Energy, new contacts," suggesting the company's lapse may have been only temporary.
Meanwhile, Duke Energy is refusing to give customers and the public at large a definitive answer on whether or not it's a member of ALEC.
"We do not release each and every group Duke is a member of, such as ALEC," Duke Energy spokesperson Jennifer Zajac told Facing South. "Memberships are evaluated on an annual basis and could change."
ALEC's reach grows in North Carolina
Though Duke Energy's role in ALEC may be uncertain, what is clear is ALEC's considerable sway in North Carolina's Republican supermajority-controlled legislature.
N.C. House Speaker Thom Tillis (R-Mecklenburg), who plays a critical role in advancing legislation, is a member of ALEC's national board and was named the group's legislator of the year in 2011. The current ALEC state co-chair, Rep. Jason Saine (R-Lincoln), serves as the vice chair of the powerful appropriations and commerce committees. The past state ALEC co-chair, former Rep. Fred Steen, is Gov. Pat McCrory's legislative lobbyist.
Other North Carolina lawmakers who are members of ALEC include Reps. Tim Moffitt (R-Buncombe), who chairs a number of key committees including one on regulatory reform; Tom Murry (R-Wake), chair of the commerce committee and natural resources appropriations subcommittee and vice chair of regulatory reform; Ruth Samuelson (R-Mecklenburg), chair of the Environmental Review Commission and vice chair of the environment and public utilities committees; and Paul "Skip" Stam (R-Wake), vice chair of the finance and rules committees.
On the Senate side, ALEC members include Tom Apodaca, a Hendersonville Republican who chairs Ways & Means, Rules, and the Select Committee on UNC Board of Governors, and Tommy Tucker (R-Union), who co-chairs the State and Local Government and general government appropriations committees.
In all, 54 out of 170 North Carolina lawmakers belonged to ALEC as of June, according to the documents obtained by The Guardian. North Carolina was one of only seven states to increase its membership more than 40 percent. At the same time, the legislative session that adjourned in late July saw at least two dozen bills introduced that promoted ALEC priorities, including the renewables repeal legislation.
But ALEC efforts to discourage the shift to renewable energy is again likely to meet popular resistance in North Carolina. A poll released earlier this year by the N.C. Sustainable Energy Association found that over 82 percent of North Carolinians said state leaders and elected officials should seek more renewable energy sources.
That included 89 percent of Democrats, 81 percent of independents, and over 75 percent of Republicans.