Hood: Affordable energy fosters economic growth
North Carolina is grappling with higher electricity prices compared to its neighbors, which is a concern for economic growth. While some suggest data center demand is responsible, a recent study indicates no statistical correlation. Policy experts recommend changes to the state's clean-energy goals and electricity generation strategies to ensure affordable and reliable power.
John Hood, a board member of the John Locke Foundation, highlights North Carolina's struggle with electricity prices, which rank 28th lowest in the U.S., trailing neighboring states like Virginia and South Carolina. This disparity is seen as a potential impediment to the state's economic growth and competitiveness, despite otherwise favorable tax, regulatory, and resource advantages. The article notes that North Carolina's renewable-portfolio standard is a contributing factor to higher electricity costs compared to states with more lenient or non-existent targets.
A contentious point in the debate is whether the surge in data center construction is driving up electricity prices. However, Thomas Pyle and Daniel Simmons of the Institute for Energy Research counter this, stating their study found "no statistically significant correlation between the number of data centers in a state and its current electricity prices." They argue that prices in top data center states are virtually identical to the average, and there's no link to faster rate increases, making it unwise to block data center development based on this premise.
Hood references his colleague, Jon Sanders, who points to past legislative action where the General Assembly overrode Governor Josh Stein's veto to modify clean-energy goals, projected to save households and businesses up to $13 billion on electric bills. Sanders further recommends converting North Carolina's carbon goals from mandatory to aspirational and ensuring that any retirement of baseload generation is replaced with equal or greater new baseload capacity, ideally from nuclear or natural-gas plants. Additionally, Sanders proposes an "Only Pay for What You Get" Act, aiming to incentivize reliable and least-cost generation by tying utility cost recovery to the dependability of electricity output, underscoring electricity's role as a basic human need and critical economic development factor.