NC’s governor signs major energy bill, laying the groundwork for a budget compromise

With North Carolina’s top Republican lawmakers standing beside him, Democratic Gov. Roy Cooper signed Wednesday a piece of energy legislation that was years in the making.

The long-awaited proposal, House Bill 951, solidifies Cooper’s goal of carbon neutrality in the state by 2050 and gives Duke Energy, the state’s dominant utility, a win it has long sought on multi-year rate-making.

Though North Carolina’s most prominent businesses and renewable-energy advocates objected to its passage, the agreement is a win for both the Republican-majority legislature and the governor, and it comes as both parties negotiate a spending plan for the state.

North Carolina has been in a holding pattern on the budget since 2018, when the legislature successfully overrode Cooper’s veto of its conservative spending plan. The governor and legislature have been in a stalemate over the state budget since then.

Cooper’s signing of the energy bill Wednesday indicates that this year, top Republican lawmakers and the governor might be able to stand next to each other once again in the coming weeks if the two parties work out a mutually beneficial state spending plan for the first time in Cooper’s more than four years as governor.

Lawmakers say the compromise on energy legislation may make it easier for the two parties to come to an agreement on the budget next.

“When you’ve had a successful experience in negotiating a deal, it makes the next deal between the same people much easier because you understand each other better and you understand that you can’t get all you want,” said Senate minority leader Dan Blue, a Democrat serving Wake County.

The energy bill is not the first compromise between the two branches this year. Cooper signed a criminal justice reform bill with bipartisan support and worked with the legislature to create a plan to reopen schools amid the pandemic. But the energy proposal is one of the most complicated compromises between the two branches yet, and lays the groundwork for an even bigger trade-off in budget negotiations.

“It creates momentum,” said Republican Sen. Paul Newton, a Republican from Mount Pleasant. “Having a bipartisan solution here on energy does help lead to a bipartisan solution on the budget.”

The sacrifices they make

The sacrifices each side made to come to an agreement on the energy bill are similar to some of the concessions the legislature and governor will have to make to successfully pass a budget.

The legislature and the governor compromised on how to codify the governor’s Clean Energy Plan, move away from coal and regulate utilities in order for the bill to become law.

“I’d be remiss if I didn’t highlight the display of bipartisanship shown in this effort,” Cooper said. “Making transformative change is often controversial and never easy, especially when there are different views on big, complex issues. Coming to the table to find common ground is how government should work.”

In budget negotiations, the two parties will need to find a middle ground on corporate tax cuts championed by Republicans, whether, or how, the state expands Medicaid, which is a top priority for Democrats, and how much of a raise teachers and state employees should receive. Some Republicans also want to include in the budget policy provisions that limit the governor’s powers, which Cooper opposes.

“There’s a huge appetite to get this budget impasse resolved,” Blue said.

One key difference between budget and energy bill negotiations, however, is that Duke Energy, while not at the table in final discussions on the energy bill, was key in the agreement the legislature and the governor reached.

Duke benefits from the now-law because it will allow the utility to request up to 4% increases in each of the second and third years of a multi-year rate-making process, The News & Observer previously reported.

No single outside interest is at the center of budget negotiations, by contrast, which may make a compromise on a spending plan more complicated. Instead, agencies, businesses, residents and politicians across the state have a stake in the budget and hopes for what the final draft will look like.

For now, the House and Senate are negotiating on what should be included in a counter proposal to the governor, but lawmakers hope to work out an agreement in the coming days and weeks.

For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at link.chtbl.com/underthedomenc or wherever you get your podcasts.

Under the Dome

On The News & Observer's Under the Dome podcast, we’re unpacking legislation and issues that matter, keeping you updated on what’s happening in North Carolina politics twice a week on Monday and Friday mornings. Check us out here and sign up for our weekly Under the Dome newsletter for more political news.