Is North Carolina's renewable energy law in jeopardy?
In 2007, North Carolina became the first state in the Southeast to pass a law requiring investor-owned utilities to produce more energy from cleaner sources or from greater efficiency. By 2025, 12.5 percent of all electricity sold in in the state has to come from renewable sources such as wind and solar or from energy efficiency programs.
But such laws are now being targeted for repeal by conservative forces who argue that the additional costs to North Carolina consumers -- which an independent analysis estimated at about $3 per month on the high end -- are overly burdensome.
Those forces have gained greater clout in North Carolina with the election of incoming Republican Gov. Pat McCrory and Republican supermajorities in both the state House and Senate, potentially putting the state's renewable energy law at risk of being overturned.
Last week the Washington Post reported that the Heartland Institute, a libertarian think tank skeptical of climate change science, has teamed up with the conservative American Legislative Exchange Council (ALEC) to craft model legislation reversing state renewable energy standards nationwide:
The Electricity Freedom Act, adopted by the council's board of directors in October, would repeal state standards requiring utilities to get a portion of their electricity from renewable power, calling it "essentially a tax on consumers of electricity." Twenty-nine states and the District of Columbia have binding renewable standards; in the absence of federal climate legislation, these initiatives have become the subject of intense political battles.
Also joining the push to repeal state renewable energy programs is Americans for Tax Reform (ATR), a conservative group that's a member of ALEC. In an op-ed published last year, ATR President Grover Norquist and Patrick Gleason, the group's director of state affairs, said that the "iron is hottest to strike" in states where Republicans recently took control of the government.
"If North Carolina and New Hampshire elect a Republican governor next year, those states also will be able to focus on repealing their rate-increasing mandates," they wrote.
While New Hampshire picked Democrat Maggie Hassan, North Carolina’s election of former Charlotte Mayor McCrory gives the state its first Republican governor since 1984.
Who is ALEC and Heartland?
ALEC is a nonprofit that brings together conservative state legislators and corporate representatives to draft model legislation promoting free-market and conservative policies. Its modus operandi has drawn widespread criticism, with the watchdog group Common Cause filing an IRS complaint earlier this year accusing the group of violating its tax-exempt status by lobbying state lawmakers.
"ALEC is a corporate lobby front group masquerading as a public charity,” Common Cause President Bob Edgar said in announcing the complaint. "It tells the IRS in its tax returns that it does no lobbying, yet it exists to pass legislation that serves the economic and partisan interests of its corporate members in states all over the country."
ALEC, which is holding its annual policy summit this week in Washington, D.C., does not make its membership public, but the Center for Media and Democracy's ALEC Exposed investigation has revealed that at least 29 current members of the N.C. House and three members of the N.C. Senate are affiliated with the group. They include N.C. House Speaker Thom Tillis (R-Mecklenburg), who was named ALEC State Legislator of the Year in 2011, and House Majority Leader Paul Stam (R-Wake), who is currently running for speaker pro tem.
N.C. House Majority Whip Ruth Samuelson (R-Mecklenburg) is a member of ALEC's Energy, Environment and Agriculture Task Force, which adopted the model legislation targeting the renewable energy standards at ALEC's 2012 annual meeting held in July. Samuelson also chairs the legislature's Environmental Review Commission and the House Environment Committee, and she is a member of the Public Utilities Committee. All North Carolina lawmakers known to be affiliated with ALEC won re-election this year, according to a Color of Change analysis.
The Heartland Institute -- itself a member of ALEC and its energy committee -- has also been embroiled in controversy recently over its climate work. Back in May, the group undertook a billboard ad campaign in its hometown of Chicago likening those who believe in global warming to "Unabomber" Ted Kaczynksi, a domestic terrorist serving a life sentence for murdering three people (photo above).
Earlier this year, scientist Peter Gleick of the environmental group Pacific Institute obtained documents from the Heartland Institute revealing that the group received $200,000 in 2011 from the Charles G. Koch Foundation, one of the family foundations run by the owners of the Koch Industries oil and chemical conglomerate, a major funding source for the climate denial movement. The leaked documents additionally revealed that Heartland was planning an effort to undermine the teaching of climate science in public schools.
Heartland has also received over $670,000 since 1998 from Exxon Mobil, another major funder of climate science denial, according to Greenpeace's ExxonSecrets website. Meanwhile, ALEC has received at least $1.4 million from the Texas-based oil giant, which is a member of the group’s Energy, Environment and Agriculture Task Force along with other major energy interests including BP America, Chevron, Dominion Resources, Duke Energy, Energy Future Holdings, Koch Industries, Marathon Oil, Peabody Energy and Shell Oil, according to ALEC Exposed.
The Pope connection
The Heartland Institute also has connections in North Carolina -- primarily through Art Pope, CEO and chair of the Variety Wholesalers discount retail chain and a major conservative benefactor.
Pope is one of four national directors of the free-market advocacy group Americans for Prosperity, which was founded with the support of Charles Koch and his brother David, and he is a close associate of the Kochs, attending their top-secret annual political strategy sessions and giving to many of the same conservative causes. A Facing South analysis of the tax records of Pope's family foundation finds that they have donated at least $100,000 to the Heartland Institute since 2007.
Pope is also the founder and primary funder of the John Locke Foundation, a Raleigh, N.C.-based conservative think tank that's been the dominant voice of climate science denial in North Carolina policy circles. The group collaborated with the Heartland Institute on a joint project called Climate Strategies Watch, an initiative that sought to discredit the Center for Climate Strategies, a nonprofit that worked with states including North Carolina to figure out ways to reduce climate-disrupting pollution.
At the same time, Pope has been a key force behind the Republican Party's recent capture of North Carolina state government. As Facing South has reported, Pope, his family, and his corporate treasury spent at least $768,000 in 2010 to help the GOP take control of the N.C. legislature for the first time since Reconstruction. And according to campaign finance reports filed so far this year (final reports won't be available until January), Pope's family and business spent another $668,000 to strengthen Republican control in 2012, while three groups with which he's affiliated -- Americans for Prosperity, Civitas Action and Real Jobs NC -- spent another $1.4 million on state-level contests during the latest election cycle.
Among the politicians who benefited from the Popes' generosity was Governor-elect McCrory, whose campaign received $20,000 in direct contributions from Pope family members. Days after the election. McCrory held a press conference to introduce his transition team and plans for his upcoming term; among those who joined him onstage was Art Pope, who is serving as one of the co-chairs of McCrory's transition team.
Other members of Pope's network are also playing key roles in shaping the McCrory administration. Lindsey Wakely, who worked at the Pope-funded N.C. Institute for Constitutional Law and who is former legal counsel to Pope's company, is the transition team's attorney. Thomas Stith, a former staffer at the Civitas Institute founded and funded by Pope, is the head of the transition team, which also includes Jack Hawke, a long-time Pope associate and former Civitas president.
The Civitas Institute has long advocated against North Carolina's renewable energy program, while Civitas Action, the group's political arm, has spent thousands of dollars in independent expenditures targeting Democrats who have been supportive of state efforts to address climate change.
A hard choice ahead for McCrory?
Pope's John Locke Foundation -- which has called for the repeal of the state's renewable energy law -- has already begun working with ALEC to undermine renewable energy initiatives in North Carolina.
Last year, representatives of the groups gave presentations around the state that were critical of the state's renewable energy standard. Among the presenters was Daren Bakst, director of legal and regulatory studies for the John Locke Foundation and a member of ALEC's Energy, Environment and Agriculture Task Force, which crafted the model law overturning state renewable energy standards.
Joining Bakst were representatives of the American Tradition Institute (ATI), a fossil-fuel industry-funded think tank that was behind a controversial freedom of information lawsuit against the University of Virginia that sought to discredit a prominent climate scientist. ATI has also targeted state renewable energy programs.
Several years ago, the John Locke Foundation teamed up with the Beacon Hill Institute, a conservative research organization that has received support from the Koch family foundations, to release a report claiming North Carolina's renewable energy law was having a negative economic impact. ALEC is citing that analysis and similar ones done in other states as part of its drive to overturn renewable energy laws. However, the Beacon Hill studies have been criticized for arbitrarily choosing high-end estimates for the future price of renewables and for incorrectly claiming they bring no environmental benefits.
Gabe Elsner of the public watchdog group Check and Balances Project told the Washington Post that ALEC's Electricity Freedom Act coupled with the Beacon Hill reports amount to "a one-two punch against clean energy laws across the country" by fossil-fuel interests.
Should the Electricity Freedom Act be considered in the next North Carolina General Assembly, it would not be the first time legislation was introduced there targeting the state’s renewable energy standard. Last year, Rep. George Cleveland (R-Onslow) -- among the state lawmakers with ALEC ties -- sponsored a bill to overturn North Carolina’s renewable energy law. It gained no co-sponsors and went nowhere, but the outcome could be different now that ALEC is getting more actively involved in the issue.
However, there are at least two politically powerful forces in North Carolina that are likely to oppose efforts to overturn the state’s renewable energy law.
One is the people themselves. A recent national survey testing support for a federal renewable energy standard found that the average U.S. citizen is willing to pay up to $162 a year in higher electricity bills to support increased generation from clean energy sources. With North Carolina's residential power customers estimated to pay only an extra $36 a year at the high end, those survey's findings suggest North Carolinians would actually be willing to pay more for cleaner energy.
Another powerful force that would likely oppose scrapping North Carolina’s renewable energy law is the state's utilities.
Duke Energy and Progress Energy, which recently became a Duke subsidiary, have already invested considerable time and money to comply with North Carolina’s renewable energy law and have signed long-term contracts with providers. Last year, a spokesperson for Progress Energy said the company did not support overturning the renewable energy law, while Duke Energy's official position is that carefully crafted renewable energy standards "can help our country transition to a cleaner and more sustainable energy future."
Utilities' opposition to repealing the law would put Governor-elect McCrory in a difficult position.
On the one hand, McCrory is close to Art Pope and his network of climate science-denying, anti-renewable energy associates -- and McCrory has been working to strengthen his ties to that crowd. Following his failed 2008 run for governor against Democrat Beverly Perdue, McCrory polished his credentials with the tea party faithful by headlining a 2010 Americans for Prosperity bus tour. Pope is not only a national director of that group, a leading force of climate science denial and a foe of renewable energy initiatives, but his family foundation is one of the AFP foundation's biggest funders.
McCrory further strengthened his credentials with the GOP's far-right wing during his recent gubernatorial campaign by endorsing a N.C. GOP resolution condemning Agenda 21 -- a 20-year-old United Nations statement in favor of urban planning and energy conservation -- as a conspiracy promoting "extreme environmentalism." AFP and other tea party groups have led opposition to Agenda 21 nationally.
But on the other hand, McCrory is no climate science-denying extremist. He spent 29 years working for Duke Energy, a leader among utilities in recognizing the reality of climate change and calling for policy solutions. Duke Energy contributed the maximum of $8,000 to McCrory's recent campaign -- $4,000 during the primary, in which he ran unopposed, and another $4,000 during the general election. And the economic development director for McCrory's transition team is Tony Almeida, the retired vice president for Duke Energy's Large Business Customers division and the company's former vice president of business relations and economic development.
Most recently, McCrory worked as senior director of strategic initiatives for the Charlotte, N.C. office of Moore & Van Allen, a major law firm that counts among its clients a variety of energy interests including solar and wind power companies. During his recent campaign, McCrory called for an "all of the above" approach to energy that embraces not only coal and natural gas but also solar and wind power. And during his 14 years as mayor of Charlotte, N.C., McCrory governed as a moderate and championed mass transit for a region plagued with suburban sprawl.
As Bloomberg news recently reported, McCrory "has left the state guessing" whether he will govern as the bipartisan Charlotte mayor or as the tea party-aligned gubernatorial candidate.
Should the Electricity Freedom Act pass the state legislature and end up on his desk to be signed or vetoed, it would certainly serve as a test of which side he's on.
(Photo of Heartland Institute billboard via Sourcewatch.org.)