North Carolina energy policy affects economic growth, not data centers, analyst argues
An opinion piece argues that North Carolina's relatively high electricity prices, which hinder economic growth and job attraction, are primarily due to state renewable energy policies, not data center demand. The author, John Hood, references studies from the American Legislative Exchange Council and the Institute for Energy Research to support his claim. He advocates for policy changes to ensure more affordable and reliable energy.
North Carolina's ability to attract companies, entrepreneurs, and families is being hampered by its relatively high electricity prices compared to neighboring states like Virginia, South Carolina, Tennessee, and Georgia. According to an American Legislative Exchange Council report, North Carolina ranked 28th-lowest in average retail electricity price last year.
John Hood, a John Locke Foundation board member, argues that the state's renewable-portfolio standard is a key factor driving up these prices, despite recent amendments to include nuclear power. He challenges the growing political narrative that demand from newly built data centers is the cause, citing a study by Thomas Pyle and Daniel Simmons of the Institute for Energy Research. Their research found no statistically significant correlation between data center concentration and higher or faster-increasing electricity rates.
Hood suggests that blocking data center construction is economically unwise given their benefits. He also highlights recommendations from his colleague, Jon Sanders, to formally convert North Carolina's carbon goals from mandatory to aspirational. Sanders further proposes requiring the replacement of retired baseload generation with an equal or greater amount of new baseload power, such as nuclear or natural-gas plants, and implementing an "Only Pay for What You Get" Act to incentivize reliable generation. These measures, they contend, would ensure electricity affordability, which is crucial for the state's economic development.