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Jul 16, 2021

North Carolina General Assembly Week in Review

After a week-long recess, this week talks of a new budget were fairly quiet as onlookers await the House’s version. Only one Appropriations subcommittee met, Information Technology, but no votes or decisions were made. Most of the chatter this week was about the House’s sweeping energy bill that kept House members in their seats until nearly 1 o’clock in the morning. Read more about that and this week's legislative news in our newsletter.

The state has began to see an uptick in the number of coronavirus cases. As of this morning, in the state of North Carolina, there were 1,020 confirmed cases of the coronavirus, 492 individuals hospitalized, and sadly, 13,519 confirmed deaths. There have been 9,492,636 doses of the vaccine distributed in NC, which is about 59% of the total adult population.

As we all continue to feel the effects of the global pandemic and adjust to a new normal, we want to highlight a few ways our clients across North Carolina have worked to support residents and make this time a little easier for those throughout the state. Read more about what our clients are doing to help by clicking here.

For more information on COVID-19 in North Carolina, click here to visit the Department of Health and Human Services website, and be sure to stay up to date on the latest federal guidelines issued by the Centers for Disease Control and Prevention (CDC) by clicking here.


Energy Bill

A revised version of a House energy bill that would have wide-ranging implications for consumers and energy producers caused friction between the Republican and Democratic caucuses this week. The bill, H951: Modernize Energy Generation, was converted from a study bill to a sweeping energy bill last month. During a lengthy meeting of the House Committee on Energy and Public Utilities in June, legislators on both sides of the aisle raised some concerns with the bill. Democrats objected to the process used to craft the landmark piece of legislation, arguing low-income rate payers were left out of the discussions, and criticized the bill for not aiming to reduce carbon emissions by 70% by 2050, a goal Governor Cooper (D) has called for. Republicans contend that the bill does begin to prepare North Carolina for a clean-energy future, by increasing our reliance on solar power and battery storage, and decommissioning coal-fired plants.

After last month’s committee, the bill sponsors went back to the drawing board and revised several key sections, and put the bill up for a vote this week in the same House Committee on Energy and Public Utilities. In essence, the bill would require energy producers to phase out a few specifically cited coal powered plants and replace the energy output with natural gas, solar energy and battery storage technology. The retirement of the coal plants would depend on the utility’s ability to meet reliability standards and would put an emphasis on increasing use of natural gas. To finance their long-term sustainability, the bill would allow energy utilities to seek rate increase approvals several years in advance without having to file rate cases every year with the Utilities Commission. The bill would also establish a mechanism to utilize securitization, similar to what was done in 2019 when the General Assembly authorized a securitization for storm recovery costs. The revised bill increased the amount of securitization utilities can use, from $200 million in the previous version to now $500 million, which bill sponsors say is approximately half of the total value of the coal-powered plants.

After narrowly passing out of Committee, the bill went to the House floor for a vote. Democrats argued that the bill was still not in a place where they could vote for it. Rep. Pricey Harrison (D-Guilford) asked why the state would switch one stranded asset (coal) for another (natural gas) when we are “looking at a 0% carbon emissions future.” Other Democrats criticized the power being taken away from the Public Utilities Commission and questioned why the legislature was making decisions about preferred energy sources, when the public staff at the Commission were the actual energy experts. Rep. Becky Carney (D-Mecklenburg) argued that the public staff at the Utilities Commission are in place to protect rate payers, and that by removing their authority to modify rate cases and regulate utilities’ ability to pass costs onto consumers, rate payers will be harmed.

A handful of Republicans also criticized the bill, particularly for the solar piece of the bill. Rep. Mark Brody (R-Union) pointed out that the amount of solar power capacity would increase to 7,327 megawatts, and claimed that installation of solar panels to accommodate that capacity would require 45,000 acres of land. Brody and a couple other Republicans claimed that solar panels are toxic and can potentially infiltrate water supply or surrounding properties.

The bill passed its second reading 58-50 on the House floor, but things got electrified when Rep. Harrison objected to third reading, a procedural move to delay the bill’s final vote by at least a day. Because several members had previously arranged plans to be gone Thursday, according to Speaker Moore (R-Cleveland), an objection to third reading meant members would have to be back in the chamber at 12:01AM. At midnight, all but two members stayed in Raleigh, and the bill again passed, but this time with no debate, by a count of 57-49. Two Democrats voted in favor, and five Republicans voted against the bill.

It now goes to the Senate, where major revisions are expected. At the start of the House session Wednesday, bill sponsor Rep. John Szoka (R-Cumberland) compared the bill’s status to being at the 2-minute warning of the first half of a football game. “During the third quarter it will be in the Senate, and the last quarter of the came we will come together to make this a good bill,” said Szoka.


Critical Race Theory

This session, when Senate President Phil Berger (R-Rockingham) has put his weight behind an issue, it has usually gone his way. He successfully championed a bill to reintroduce the science of reading in public schools, and he effectively blocked Gov. Cooper’s nominee to lead the Department of Environmental Quality. Now, he is taking aim at “indoctrination” in public schools and universities to prevent schools from promoting Critical Race Theory concepts to students, teachers or staff. On Wednesday, Berger hosted a press conference to introduce his bill, H324: Ensuring Dignity & Nondiscrimination in Schools, and to announce that the Senate would be introducing a bill to place a constitutional amendment on next year’s primary ballot to ban affirmative action.

Reading from prepared remarks, Berger said, “students must not be forced to adopt an ideology that is separate and distinct from history - an ideology that attacks ‘the very foundations of the liberal order,’ and that promotes ‘present discrimination.’” Berger asserted that parents are attending school board meetings across the state to speak out against methods being used in the classroom to promote discrimination, and that the legislature should clamp down on certain ideologies before they enter the classroom.

The bills still have a long way to go, as they have not yet even passed a Committee meeting, but it will surely cause some controversy with their Democratic colleagues. In a Senate Higher Education Committee meeting Wednesday where the bill was up for discussion only, several Democrats pointed out problems with the bill. Sen. Jay Chaudhuri (D-Wake) called the bill a “speech code” and claimed it would have a chilling effect on teachers. The bill will go back to the Higher Education Committee for a vote in the next couple weeks.


Coastal Dredging

Local governments along the coast can look forward to an easier process of securing bids for dredging services. H735: Minimum Contracts/Coastal Dredging Services passed the full Senate this week and was presented to the Governor this morning. If signed, the bill would exempt local government entities from securing three competitive bids for coastal dredging projects, as they have to do with other large construction projects. Sen. Norm Sanderson (R-Pamlico) presented the bill in Committee and said this was an important bill because there are not very many dredging companies, and by the time a local government secures three bids, sometimes the company has moved on to another state or region. The process of dredging is important to coastal communities because it allows massive ships to more easily carry bulk goods and supplies into our ports. Dredging is also performed to reduce the exposure of fish, wildlife and humans to contaminants by preventing the spread of contaminates to other areas of the waterway.


Upcoming Legislative Meetings

Wednesday, July 21

1:00PM Senate: Finance

2:30PM House: Banking