S.B. 3 started as a measure to mandate that utility companies generate at least 7.5 percent of their energy from renewable energy sources, while also increasing energy efficiency measures. Much debate about the bill focused on later provisions that affected utility companies’ ability to recover construction costs.

The debate ignored a “slight catch,” Bakst said. “A bill that would require utilities to provide customers at least 7.5 percent of their electricity through renewable resources does not require that all the customers have to live in North Carolina.”

S.B. 3 allows utilities to meet about 40 percent of the renewable energy requirement by purchasing “renewable energy certificates” from out-of-state facilities, Bakst said. “These certificates are designed to allow for investments in renewable energy when electricity from renewable sources is not available inside the state,” he said. “The electricity that is purchased through these certificates likely will never reach North Carolinians.”

North Carolina will need these certificates because the state does not have much potential for generating renewable energy in state, Bakst said. “Southeastern states like North Carolina face extensive physical limitations on renewable energy,” he said. “For example, North Carolina does not have the same type of wind resources as many other states. The N.C. Utilities Commission’s own renewable energy consultant told the legislature it should pursue a target of requiring 5 percent renewable energy use, not 7.5 percent.”