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The environment could take a beating

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The fate of North Carolina's environment was sealed when Gov. Pat McCrory appointed John Skvarla as secretary of the N.C. Department of Environment and Natural Resources.

While not a legislator, Skvarla will have lawmakers' ears on regulation, budgeting and departmental priorities. Where science figures in to this is uncertain, judging from his comments about climate change and from a mission statement sent to DENR staff last week. Obtained by INDY Week, Skvarla established the department's position on science as "That all decisions are made with a respect and understanding that environmental science is quite complex ... and most important contains diversity of opinion."

That sounds innocuous, open-minded even, but this is from a businessman who seriously entertained the debunked theory that oil is a renewable energy source.

Taken to an extreme then, could oil be classified as renewable energy in Senate Bill 3? Surely nothing that brazen could happen.

After much gnashing of teeth, SB 3 passed in 2007 and established North Carolina as the only state in the Southeast to have a renewable energy portfolio. Public utilities such as Duke and Progress are now legally required to sell some power that is generated by renewable sources, including solar and wind. Three percent of the electric utilities' 2011 retail sales in North Carolina had to come from renewable sources; conservation could also account for a small amount. That figure rises to 6 percent by 2014 and peaks at 12.5 percent beginning in 2021.

Sen. Ellie Kinnaird, a Democrat representing Orange and Chatham counties, predicts the energy industry and likeminded lawmakers will "attack" SB 3. "We'll go backward and that's their goal," she says.

Duke Energy, a former employer of Gov. Pat McCrory, was a major combatant in the original SB 3 fight. With Progress Energy, Duke successfully convinced lawmakers to insert language in the bill that allows the companies to charge ratepayers now for projected construction costs associated with nuclear plants—even though the plants may not be built for years, or ever.

As for changes to SB 3 this session, Duke spokesman Mike Hughes says, "There are so many rumors: that it's about to be abolished, that it will be more stringent." Hughes adds that Duke has complied with the renewable energy standards and will "for the near term."

The company, however, would oppose changes to the standard "so soon after it was enacted," Hughes says. "Investments are required to meet those standards."

Duke Energy's legislative priorities, including regulatory reform, water rules and coal ash ponds, "will continue to evolve," Hughes says.

One bill that is bound to make Duke Energy unhappy will be sponsored by Kinnaird. She says she plans to back a measure that will award special rates to customers who use less electricity.

It's likely to encounter significant resistance from the utility companies, which would generate less revenue if people use less energy. (This is why you receive flyers in the mail from PSNC Energy advertising gas grills.)

Undaunted, Kinnaird says, "We need to get these bills out to counteract and contrast what's out there."

Elizabeth Ouzts, state director of Environment North Carolina, fears the anti-regulatory climate will lead to an erosion of clean water rules, particularly those governing new development near Jordan Lake, a drinking water source for at least 250,000 people in the Triangle.

Because of high levels of pollutants, parts of Jordan Lake have been on the federal list of impaired waters since 2002. A bill passed in 2009 called for developments, wastewater treatment plants, agriculture and the state Department of Transportation to reduce the amount of pollutants they discharge into the lake for an overall total of 35 percent.

New developments must limit pollution released upstream by leaving buffers along creeks and streams and controlling their stormwater runoff—which can be achieved by installing holding ponds and reducing the amount of pavement in the development.

"From our view we want to protect clean energy standards and the Jordan Lake rules," Ouzts says. "The best time to prevent pollution is before you build."

Speaking of potential pollution, fracking is already legal in North Carolina; drilling could start as early as next year. The fear among environmental groups and concerned citizens is how that practice will be regulated. Regulatory reform that is "business-friendly" (our decoder ring translates that to mean fewer and looser rules) is hardly a recipe for cracking down on polluters. And for a pro-business, anti-regulation mind-set, look no further than the state Mining and Energy Commission, which is charged with crafting proposed rules. It is packed with energy interests and fracking advocates, including its chairman, Lee County Commissioner Jim Womack.

And if the financially gaunt DENR takes additional budget hits, there could be fewer inspectors not only to monitor these operations but also to enforce environmental laws in general.

As for offshore drilling, it could be a while before you see oil rigs from your condo at Carolina Beach. If it happens, the drilling would occur in federal waters, which start about three and a half miles from shore. Barring major political action in Congress—or a plea to the feds by McCrory—those waters are off-limits until 2017. Still, the GOP has signaled that they want drilling inland and at sea.

More than 300 miles west, could a feud between the City of Asheville and Buncombe County have larger implications for the state? It depends on how a bill is written. We know there will be legislation forcing Asheville to surrender its ownership of the water system without compensation to the Metropolitan Sewerage District, a governmental entity in Buncombe County. We won't go into the complicated, decades-long acrimony between the city and county, but the concern for the rest of North Carolina is that the bill could set a precedent for the state to require takeovers of othe municipalities' functions such as water, transit and sewer.

"It could apply to any public utility that is funded exclusively through revenue bonds," says Barry Summers of SaveOurWaterWNC. "These systems are very vulnerable." (In revenue bonds, the utility pays off the debt through customer rates.)

Several towns in North Carolina, including Butner, have passed resolutions opposing the legislation because it "sets a dangerous precedent that will have a chilling effect on any local government investing in infrastructure."

"It is pretty clear state government has that power," says Carrboro Mayor Mark Chilton. "They have the ultimate say over what we do. This is obviously highly concerning."

At press time Tuesday night, the town was considering a resolution opposing the bill.

McCrory, though, having been mayor of Charlotte, could help local governments thwart such takeovers, Chilton says. "He worked for more autonomy of cities and towns."

Rep. Chuck McGrady, a Republican from Henderson County, is co-sponsoring the bill. He says it has "no statewide implication" but adds that "somebody could decide it's what they want anywhere." That sounds like a statewide implication to us, but McGrady, a former Sierra Club president, emphasizes the bill applies to a "specific situation with a specific set of facts not duplicated anywhere else in the state."

McGrady also maintains that he and co-sponsor Rep. Tim Moffitt, R-Buncombe, are ensuring the bill will not allow lawmakers to transfer a city's assets to private companies such as Aqua North Carolina. "We intend to have a prohibition against privatization in the bill," McGrady says. "It's just not going to happen."

The original version of this story incorrectly listed Barry Summers' last name as Waters.

This article appeared in print with the headline "Unrest in the forest."

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