Energy policy in North Carolina

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Energy policy in North Carolina
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Quick facts
Energy department: North Carolina Department of Environment and Natural Resources[1]
State population: 9.8 million
Per capita income: $37,049
Energy consumption
Total energy consumption: 2,573 trillion BTU[2][3]
Per capita energy consumption: 267 million BTU
Energy spending
Total state energy spending: $36,102 million
Per capita energy spending: $3,741
Residential natural gas price: $11.22 per thousand cubic foot
Residential electricity price: 10.93 cents per kWh
See also
Energy on the ballot
Statewide fracking on the ballot
Local fracking on the ballot
Policypedia
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Energy Policy Project
Energy policy in the United States
Energy use in the United States
Energy terms and definitions
Energy policy in North Carolina
Fracking in North Carolina

Energy policy in North Carolina depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in North Carolina, and many other states, focuses on decreasing emissions and dependence on fossil fuels by increasing energy efficiency and the use of renewable energy. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.

Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: "Energy policy in the United States" for more information on energy policy.
See also: Fracking in North Carolina

Energy overview

State facts

Below are quick facts about North Carolina's energy climate.

North Carolina

  • is a net electricity importer.
  • has no fossil fuels.
  • has renewable energy in the form of biomass, biofuels, hydropower and solar energy.
  • is among the top states in the nation for producing nuclear energy.
  • has 73 hydroelectric dams.
  • mandates that 10 percent of all electricity come from renewable sources by 2018.[4]

In North Carolina

  • total energy consumption per person is in the lower one-third of the nation.
  • there are one-third of the nation's private-access biofouling stations.
  • electricity is the main source of energy used in home heating.
  • renewable energy sources made up slightly more than 5 percent of net energy generation in 2013.
  • the residential sector is the largest energy-consuming sector in the state.[4]

Available energy resources

North Carolina has no traditional energy resources such as oil, coal, or natural gas. The state does not produce coal, and does not have any natural gas reserves or production. A pipeline is planned for expansion to connect the Marcellus and Utica shales to the north. Because of the state's access to Wilmington Port it ships oil and coal. This lack of traditional energy resources means North Carolina is a net energy importer, bringing in all the coal, natural gas and petroleum consumed in the state.[4]

North Carolina has renewable energy resources mainly produced from the state's 73 hydroelectric dams. Solar energy and biomass provide a portion of renewable energy generation. Biomass comes from wood and wood waste, and some from landfill gas and municipal solid waste. There is high potential for biomass resources that come from agriculture and animal waste, in addition to the increasing popularity of solar energy. Non-hydroelectric renewable resources supply only about 2 percent of the net production. Slightly more than 5 percent of the states total generation is from hydroelectric energy and other renewable sources.[4]

Energy consumption in North Carolina
NC energy consumption chart.png

Legend[5]
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Consumption and prices

As shown on the pie chart in 2011,, almost one third of North Carolina's energy use was in the residential sector, over one-quarter for transportation, less than one-quarter for commercial uses, and the rest was used mostly in industrial. Most of the energy used in the state is in the form of coal (primarily used for electricity generation), followed by petroleum. Gasoline, used in transportation, accounts for most of the petroleum consumed in the state. North Carolina has one of the highest motor gasoline taxes in the nation.[4] Generally the price of gasoline in the state tracks closely to the national average.[6][7]

According to the U.S. Energy Information Administration's (EIA) February 2014 report, the federal excise tax is 18.40 cents per gallon of gasoline and 24.40 cents per gallon of diesel fuel. In addition to that, North Carolina collects a total tax of 37.8 cents on every gallon of gasoline and gasohol diesel fuel, which ranks it at the eighth highest in the United States.[8][9]

Comparisons tables

The table below compares North Carolina's consumption and spending for energy, as well as prices for gas and electricity, and carbon emissions to those of Georgia, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • North Carolina's rank of 13th in carbon emissions means that carbon emissions are lower in North Carolina than in Georgia, which has a ranking of ninth.
  • Likewise, per capita income in North Carolina is lower than the national average, and similar to Georgia, which at 41st ranks two places behind North Carolina's ranking of 39th in per capita income.
  • These two states are very similarly placed in the high-rank on population, overall energy consumption and overall energy spending.
  • Total energy consumption in North Carolina (at 12th) is somewhat lower than in Georgia (at ninth), and total spending in North Carolina is lower since it ranks 12th to Georgia's ranking of 10th. This is somewhat surprising because electricity prices are only slightly higher in North Carolina at 31st compared to Georgia at 34th, but gas prices are significantly higher in Georgia which was ranked at the eighth highest price and North Carolina ranked 20th.
Consumption and Expenditures Comparisons Summary
Type North CarolinaGeorgiaU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population9.8 million1010.0 million8313.9 million
Per Capita Income Average$37,04939$36,86941$42,693
Total Consumption2,573 trillion BTU122,573 trillion BTU997,301 quadrillion BTU
Per Capita Energy Consumption267 million BTU38306 million BTU28312 million BTU
Total Spending on Energy$36,102 million12$42,405 million10$1,394,088 million
Per Capita Spending on Energy$3,74144$4,32230$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$11.2220$13.728$12.48
Price of Electricity, cents per kWh10.933110.483412.31
Total Carbon Dioxide Emissions, million metric tons (2010)142.913173.795,631
*Rank is from highest to lowest.

Electricity is the popular home heating source in North Caroline. Almost 25 percent of homes in North Carolina are heated with natural gas. LPG heats 8.6 percent of homes, fuel oil is the next most common source, followed by other sources.

See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in North Carolina
Source North Carolina 2011 U.S. average 2011
Natural gas 24.8% 49.5%
Fuel oil 4.8% 6.5%
Electricity 59.2% 35.4%
Liquid Petroleum Gases (LPG) 8.6% 5%
Other/none 2.5% 3.6%

Production and transmission

North Carolina produced 569 trillion BTU of energy in 2011. Of that 75 percent came from nuclear and the remaining 25 percent came from what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels."[10]

Energy production by type in North Carolina, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Nuclear 424.1 74.55% 5.13%
Other 144.8 25.45% 2.03%

North Carolina produces more than 5 percent of the nation's total nuclear electricity power. Duke Energy Carolinas, LLC, Progress Energy Carolina Inc. and Progress Energy Carolinas Inc. are the three nuclear power plant producers. Although the state is among the highest in terms of production, it still does not meet the energy demands of the state and must use alternative power sources, and rely on imported resources.[4]

Coal is the source for more than half of the electricity generated in the state. Most of the coal used in electricity generation is shipped into North Carolina by rail and truck from Kentucky and West Virginia, with smaller amounts shipped from Virginia and Pennsylvania. Imports also arrive through Wilmington Customs District port into the state.[4]

Hydroelectric dams and biomass make up the bulk of the state's renewable energy sources and the other portion of North Carolina's energy generation. These resources come from Progress Energy Carolinas Inc. (which has two locations) and Duke Energy Carolinas, LLC (which has three locations), making up more than 5 percent of the state's net electricity generation.[11]

Petroleum is imported through the Port of Wilmington into North Carolina. Exploration for oil and natural gas has occurred in the state, but sufficient sources for development have not been found. Natural gas is not being produced in the state, however, planned pipeline expansion will connect the state to Marcellus and Utica Shales shale gas production.[12]

Where electricity comes from in North Carolina[13]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 26,000 0.26% 0.09%
Natural gas-fired 2,126,000 21.05% 0.21%
Coal-fired 4,217,000 41.75% 0.24%
Nuclear 3,139,000 31.08% 0.4%
Hydroelectric 342,000 3.39% 0.11%
Other renewables 239,000 2.37% 0.12%
Total net electricity generation 10,101,000 100% 0.25%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

In North Carolina there are currently three investor-owned utilities and 79 municipal utilities. There are seven natural gas utilities.[14][15]

North Carolina is supplied natural gas through Columbia Gas Transmission Corp., East Tennessee Natural Gas Co. and Transcontinental Gas Pipeline Co. Duke Energy is the largest electric company and has 7,900 miles of transmission lines in the United States with its headquarters in Charlotte, North Carolina. Progress Energy, Duke Energy, Dominion N.C. Power and electric cooperatives and electric power companies, distribute most of the North Carolina's electricity. Most coal that is used in the state comes from Kentucky and West Virginia.[4][16]

Energy policy

Policy Issues
State regulators in North Carolina are creating more rules intended to regulated drilling and fracking operations in the state. The long process resulting from these rules is increasing the price of utilities in North Carolina as well as the other neighboring states.[17]
See also: Fracking in North Carolina

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. The low price of electricity in North Carolina may result from the fact that more than 34 percent of electricity is generated from nuclear plants, a portion comes from hydroelectricity, which is traditionally a cheap source of electricity. Over 55 percent of North Carolina's electricity is generated from coal, which until recently has been a low-cost source of energy.[18] North Carolina has been average among U.S. states regarding energy efficiency and renewable energy use. It was the first state in the southeast to adopt a Renewable Portfolio Standard, called the Renewable Energy and Energy Efficiency Portfolio Standard (REPS). The standard requires investor-owned utilities and electric cooperatives to obtain 12.5 percent of the electricity sold to customers from renewable energy sources by 2021. Electric power suppliers may comply in a variety of ways through different renewable resources. An additional requirement was added to focus on energy recovery from poultry waste and for electricity derived from swine waste.[19][20][21]

North Carolina ranked 24th on the Energy Efficiency Scorecard produced by the American Council for an Energy-Efficient Economy.[22][23] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect" which refers to the fact that "some of the theoretically estimated gains in energy efficiency will be eroded as consumers consume additional goods and services."[24][25]

Major legislation

  • North Carolina Senate Bill 3 (2008), mandates a combination of the renewable energy and energy efficiency portfolio standard (RPS). Public electric utilities must purchase or produce renewable energy power and savings in specific increments. These increments are comprised 6 percent in 2015, 10 percent in 2018 and growth thereafter.[26]
  • North Carolina Net Metering requires investor-owned utilities to provide opportunities to their customers for net metering and operate systems that generate electricity. Qualified technologies include solar, wind, hydropower, ocean or wave energy, biomass resources, combined heat and power (CHP) or hydrogen. Utilities must file annual reports with the North Carolina Utilities Commission. The reports must include the number of net-metering applications and customer-generators, and the size and types of energy technologies among other requirements.[27]
  • The Affordable and Reliable Energy Act was created to reduce high energy costs and decrease the financial burden on the citizens of North Carolina. The bill was revised by the renewable energy portfolio standards to support cost recovery by public utilities for specific costs of compliance with renewable energy portfolio standards. In addition, this act requires an energy policy study provided by the North Carolina Legislative Research Commission. Any recommendations on any changes may be added by the commission in future General Assembly reports.[28]
  • The Clean Energy and Economic Security Act (2012) established an oil and gas board with authority over issues related to oil and gas exploration and development in North Carolina. This includes hydraulic fracturing and horizontal drilling. The act directs purchasing large vehicles such as school buses and heavy-duty trucks. The act requires that the operate on compressed natural gas, or natural gas and gasoline. The act will help the government task force develop public-private partnerships to provide more compressed natural gas (CNG) fueling locations, and to ensure the use of fuel-efficient and cost-efficient tires on state vehicles in North Carolina.[29]
  • The North Carolina Wind Energy Permitting Standards (2013) created a statewide permit requirement for wind energy facilities. Individuals must receive a permit from the Department of Environment and Natural Resources (DENR) before starting construction on any wind turbine or group of wind turbines located within a half a mile of one another.[30]
Policypedia
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State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.


See also
Local fracking on the ballot

Statewide fracking on the ballot

Government agencies and committees

  • The North Carolina Utilities Commission (NCUC) is an independent regulatory agency that has been regulating North Carolina's public utilities since 1977, including those that are municipally-owned. Types of utilities regulated include electric, natural gas, water, transportation, combined water and sewer utilities and certain aspects of local telephone service. More than 2,200 utilities are under the agency's jurisdiction. Most of these utilities must obtain approval before they set new rates; issue stocks or bonds; or undertake major construction projects, such as water wells, power plants or transmission lines. The NCUC organization is composed of seven commissioners who decide the cases brought to attention for changes in utility operations, rates and for construction projects. Commissioners are appointed by the Governor and confirmed by the State Senate for staggered, six-year terms. The commissioners' office, under the direction of a chairperson appointed by the governor for a two-year term, has oversight of all NCUC staff-related activities.[32]
  • The North Carolina State Energy Office oversees programs related to energy efficiency and savings for North Carolina governments, schools, universities and private businesses. The group also serves as the Energy Policy Council, Governor's Scientific Panel on Offshore Energy and North Carolina Open-Net.[33]
  • The Department of Environment and Natural Resources is responsible for the protection of the state's natural resources. The department is managed by Secretary of Environment and Natural Resources. There are eight divisions in the department that oversee water and air quality, coastal management, environmental outreach, fisheries and state parks, among other areas.[34]

Major organizations

  • North Carolina's Land Quality Section of the Division of Energy, Mineral, and Land Resources (DENR) is an organization that administers regulatory programs with the goal of protecting the quality of water, air and public health. Technical assistance is also offered to the public, businesses, local governments and farmers to encourage responsible actions towards the environment.[35]
  • NC Sustainable Energy Association was founded in 1978 as a nonprofit membership organization of community members interested in an independent energy future for North Carolina. The group values respect, integrity, collaboration, a diverse set of energy solutions and responsiveness. The group drives to improve market development and public policy to produce affordable energy, clean energy jobs and business opportunities to benefit North Carolina.[36]
  • The NC GreenPower is a 501(c)(3) non-profit association that is spread statewide with a mission to better the quality of North Carolina's environment through programs that connect consumers with efficient energy and carbon offset providers. A panel of 24 members represents the Board of Directors. These stakeholders were appointed by the North Carolina Utilities Commission and vote on annually for open seats. The group supports careers and internships to advance a team that supports a cleaner, brighter future for North Carolina and all of its citizens.[37]
  • The Center for Energy Research and Technology (CERT) is grounded in sciences and engineering at the North Carolina Agricultural and Technical State University. The center supports research, training and community outreach. The organization is made up of distinguished faculty, staff and students with the aim of prominent sustaining practices and reducing energy and water consumption through practicing energy use, conservation and reduction.[38]

In the news

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See also

External links

References

  1. National Association of State Energy Officials, "North Carolina," accessed March 9, 2014
  2. These figures come from the U.S. Energy Information Administration "State Profiles and Energy Estimates, North Carolina Overview." Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
  3. U.S. Energy Information Administration, "North Carolina Overview," accessed February 26, 2014
  4. 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 U.S. Energy Information Administration, "North Carolina Profile Analysis," December 18, 2013
  5. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  6. Gas Buddy, "Historical Gas Charts," accessed February 26, 2014
  7. To compare current gasoline prices in North Carolina to the U.S averages, go to GasBuddy.com
  8. U.S. Energy Information Administration, "Petroleum Marketing Monthly," February 2014
  9. The Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  10. U.S. Energy Information Administration, "State Energy Data System, Production," accessed February 26, 2014
  11. U.S. Energy Information Administration, "North Carolina State Energy Profile," February 27, 2014
  12. U.S. Energy Information Administration, "North Carolina State Energy Profile," February 27, 2014
  13. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration "North Carolina Overview", accessed February 27, 2014
  14. North Carolina Utilities Commission, "Natural Gas Industry," accessed February 27, 2014
  15. Thrive in North Carolina, "Utilities," accessed February 27, 2014
  16. Thrive in North Carolina, "Utilities," accessed February 27, 2014
  17. Times Free Press, Gas drillers turn to northwest Georgia, accessed March 17, 2014
  18. Institute For Energy Research, "North Carolina," March 15, 2014
  19. According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
  20. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  21. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  22. For a full explanation of how the American Council for an Energy-Efficient Economy calculates this ranking see the executive summary of their report here: [1]
  23. American Council for an Energy-Efficient Economy, "State Energy Efficiency Policy Database," accessed February 27, 2014
  24. International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
  25. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013, accessed March 3, 2014
  26. American Council for an Energy-Efficient Economy, "North Carolina Energy Efficiency Policy Database," accessed February 27, 2014
  27. Database of State Incentives for Renewables & Efficiency, "Net Metering," reviewed March 5, 2013, accessed March 15, 2014
  28. General Assembly of North Carolina, "Affordable and Reliable Energy Act," published accessed February 27, 2014
  29. General Assembly of North Carolina, "Clean Energy and Economic Security Act," May 23, 2012
  30. Database of State Incentives for Renewables & Efficiency, "Wind Energy Permitting Standards," June 18, 2013
  31. North Carolina General Assembly, "Committees," accessed February 27, 2014
  32. North Carolina Utilities Commission, "Commerce," accessed February 27, 2014
  33. North Carolina State Energy Office, "About," accessed March 11, 2014
  34. North Carolina Department of Environment and Natural Resources, "Home", accessed May 19, 2014
  35. Division of Energy, Mineral and Land Resources, "Energy Program," accessed February 4, 2014 (dead link)
  36. NC Sustainable Energy Association, "Home," accessed February 27, 2014
  37. NC GreenPower, Home, accessed February 27, 2014
  38. North Carolina Agricultural and Technical State University, "Center for Energy Research and Technology," accessed February 27, 2014