legislature

How ALEC and Exxon Secretly Fracked North Carolina

  • Posted on: 17 July 2013
  • By: Connor Gibson

Former EPA Administrator Michael Leavitt speaks at an ALEC event sponsored by ExxonMobil, among other dirty energy interests and Fortune 500 companies. (AP Photo/Elaine Thompson through Bill Moyers.com)

Remember that controversial law last year, legalizing fracking in North Carolina after being vetoed by the state's governor? The law bears tell-tale signs of being written by the American Legislative Exchange Council (ALEC), a corporate front group with ties to the fracking industry.

Like the Exxon-backed fracking loopholes in Ohio and numerous other states, the new North Carolina law contains the same "trade secrets" provisions that ensure the public will not have the right to know which chemicals gas frackers are pumping underground to retrieve shale oil and gas. The "trade secrets" provisions are key to ALEC's model bill in order to allow Exxon, Shell, Duke Energy and other ALEC member companies to more quickly extract, pipe and burn gas without having to bother with pesky transparency laws.

Here's a list of NC ALEC legislators who co-sponsored the bill legalizing fracking: S820 or HB1052 -- the so-called "Clean Energy and Economic Security Act"

  • Sen. Tom Apodaca
  • Sen. David Rouzer -- member of ALEC's Energy, Environment and Agriculture task force, which created the frack fluid disclosure loophole bill with internal sponsorship by ExxonMobil.
  • Rep. Mike Hager
  • Rep. Tim Moffitt
  • Rep. Fred Steen -- ALEC's State Chairman in NC

Rep. Fred Steen co-sponsored the House version of the so-called "Clean Energy and Economic Security Act." Steen was ALEC's State Chair in North Carolina, and his job is to ensure ALEC models are introduced and, ideally for ALEC, passed. Rep. Steen was the only state legislator serving as State Chair in North Carolina (other states often have multiple legislators serving as co-chairs), and according to ALEC's tax forms, his position implies the following responsibilities (emphasis mine):

State Chairmen duties shall include recruiting new members, working to ensure introduction of model legislation, suggesting task force membership, establishing state steering committees, planning issue events, and working with the Private Enterprise State Chairman to raise and oversee expenditures of legislative 'scholarship' funds.

As ALEC's state chairman in NC at the time of this vote, Rep. Steen appointed a "Private Sector Co-Chairman" to help oversee ALEC activity in NC. In this case, Rep. Steen worked with North Dakota lobbyist Joel Gilbertson, who represents clients like AIG, PhRMA, and Crop Life America (a front group for pesticide and chemical fertilizer interests). Rep. Steen was listed on ALEC's website as its State Chairman since at least late 2008, suggesting that he has been re-appointed to that position at least once--a term lasts two years.

Ironically, co-sponsoring Rep. Mike Hager has been asked about his role in ALEC before, telling the Charlotte Business Journal that, "I'm not a big fan of model legislation." Apparently, keeping toxic chemicals secret from constituents is something Rep. Hager is a big fan of, in which case ALEC models are pretty useful. Rep. Hager has received $15,500 from oil, gas and electric utility interests in this election cycle, on top of $3,250 from his first successful election bid in 2010. One of the utilities donating to Rep. Hager is Duke Energy, his former employer, which operates natural gas pipelines that deliver to over 500,000 customers and is expanding gas generation at its power plants.

North Carolina's fracking loophole law has drawn attention from around the country, including a statement of support from Republican presidential candidate Mitt Romney. The new NC law barely overturned a veto by former Gov. Beverly Perdue, in a heartbreaking twist involving one Democratic legislator being bought out at the last minute and another accidentally voting in favor of the bill and refused the opportunity to correct her vote, something that is commonly acceptable when such a mistake is made. The Charlotte Observer explains:

Rep. Becky Carney, a Democrat from Mecklenburg County who opposes fracking, pushed the wrong button and accidentally voted with Republicans to override the veto. A maneuver by Wake County Republican Paul “Skip” Stam prevented her from changing her vote, giving the GOP a historic one-vote margin of victory. "It was a huge mistake,” Carney said afterward. “I take full responsibility.” Democrats denounced Stam’s quick parliamentary maneuver as a dirty trick that resulted in the passage of a landmark energy overhaul that could create a natural gas production industry in the state. [...] Carney said it was the first time in her 10-year legislative career that she pushed the wrong button on a vote. Mistaken votes are not uncommon and letting lawmakers change their votes is routine practice in the state legislature.

This local news clip posted by the Voter's Legislative Transparency Project, which tracks ALEC activity in North Carolina, includes more on Rep. Carney's error:

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Duke Energy Ties to Gov. McCrory Increase Concerns over SB10 Proposal to Fire NC Utilities Commission

  • Posted on: 13 February 2013
  • By: Connor Gibson

This guess post was written by Sue Sturgis for the Institute for Southern Studies' online magazine, Facing South.

This is a critical moment for North Carolina's energy future, as a packed public hearing held in Raleigh this week showed -- and there are growing concerns that the politician who might get to make key decisions about it has significant conflicts of interest.

On Monday, Feb. 11, about 180 people attended a N.C. Utilities Commission (NCUC) hearing on Duke Energy's plan for meeting its customers' power needs over the next two decades. Dozens of citizens testified against Duke's proposed Integrated Resource Plan, which calls for generating most of its energy from polluting sources: dirty coal plants (24 percent), natural gas plants (29 percent), and risky nuclear plants (29 percent). Efficiency would account for only 4.5 percent of Duke's generation mix, while wind and solar would make up only 2.25 percent. The plan would cost Duke's customers dearly, as the company -- which supplies electricity to over 95 percent of North Carolina customers since its merger with Progress Energy -- would quadruple rates within a decade.

Speaker after speaker called on commissioners to require Duke to increase its generation from renewable sources such as solar and to encourage greater efficiency. Many of those who testified cited the urgency of acting now, pointing to mounting signs that the climate has already been dangerously disrupted by unchecked greenhouse gas pollution.

"What are we waiting for, the next tragic super storm to strike?" asked Avram Friedman, executive director of the Canary Coalition, a nonprofit that advocates for clean air in western North Carolina. "What is it going to take for you to act in the public interest?"

But there are mounting concerns that the public interest will get even less consideration if North Carolina's legislature gets its way and gives Gov. Pat McCrory (R) sole control over the commission's membership.

A controversial bill recently introduced in the General Assembly would sweep out the current members of key state regulatory commissions including the NCUC and replace them with members appointed by the governor and/or the legislature. In the case of the NCUC, Senate Bill 10 specifies that the new appointments would be made by the governor and confirmed by the legislature. It would also downsize the commission from seven members to five. The bill has already passed the Senate and is now advancing through the House, both of which are controlled by veto-proof Republican super-majorities.

State Sen. Bill Rabon (R-New Hanover), one of the bill's primary sponsors along with Sens. Tom Apodaca (R-Buncombe) and Neal Hunt (R-Wake), told the Senate Rules Committee that the bill streamlines state government and allows key boards to be run by appointees who "are more like-minded and willing to carry out the philosophy of the new administration," as The News & Observer reported.

However, some watchdogs are protesting what they call "an unprecedented conflict of interest" created by the legislation because of McCrory's unusually close ties to Duke Energy.

In addition to having received generous campaign contributions from Duke Energy (the company, its political action committee, employees, and their families donated over $240,000 to McCrory's 2008 and 2012 gubernatorial campaigns and to the state Republican Party since he became the party's nominee, according to a recent report by the liberal advocacy group Progress NC), McCrory worked for the company for 28 years, starting out digging ditches and eventually making his way to a position as senior adviser with Duke's Business and Economic Development Group before retiring in 2007 to run for governor.

Because of that employment history, the clean-energy advocacy group NC WARN last month joined with the state AARP to ask the governor to recuse himself from making appointments to the commission and from appointing a new Public Staff director to represent consumers in utility cases because of his longtime association with Duke. This week NC WARN sent a letter to McCrory raising concerns about the commission overhaul proposal.

"If the bill passes, you would be required to appoint all the members of the Utilities Commission," NC WARN Executive Director Jim Warren wrote in the Feb. 11 letter. "The public perception would be inescapable that Duke Energy had captured its regulator, and had done so with the Governor's assistance."

But the governor's financial ties to the utility giant are not merely historic: Though he's no longer employed by Duke Energy, McCrory continues to hold a significant financial stake in the company. His latest statement of economic interest filed with the N.C. Ethics Commission and posted to the Indyweek.com website discloses that he holds stock in Duke valued at a minimum of $10,000. North Carolina ethics rules do not require reporting the exact value of the investment.

Notified of the holdings, Warren said they are "just more evidence that the governor has an unprecedented conflict of interest."

McCrory's history of conflicts

This is not the first time concerns have arisen over potential conflicts of interest related to McCrory's close ties to Duke Energy, as Facing South reported back in 2008.

In 1994, while working for Duke and serving as an at-large city councilman and mayor pro tem in the company's hometown of Charlotte, McCrory chaired a council meeting and voted on a matter that directly affected Duke's finances. City of Charlotte v. Cook involved Charlotte's efforts to condemn private farmland to build an underground water pipe for a project that would enable the city to purchase power from Duke instead of the electric membership corporation that was the authorized provider for that location.

The case eventually ended up in state Supreme Court. Though the court majority ultimately ruled there was no wrongdoing by the city, a dissenting opinion by Justice Beverly Lake Jr., a Republican, pointed to a conflict of interest on McCrory's part:

The record evidences multiple Duke Power internal e-mail messages and memoranda reflecting that Duke Power and the City collaborated to have the City acquire a fee simple title to the property in order that Duke Power could provide the power to the plant. These e-mail messages indicate that the mayor pro tempore of the City, an employee of Duke Power, as well as the project director had contact with Duke Power officials and discussed condemning a fee simple interest for the project. The mayor pro tempore chaired the 12 September 1994 City Council meeting where the subject of condemning a fee simple was discussed, and he voted in favor of a fee simple condemnation.

McCrory filed an affidavit saying he would not have participated in the meeting if he had known Duke was involved. However, the court pointed to evidence that McCrory did in fact know Duke was involved -- though it ruled that "an ethical problem involving the Council has to rise to a much higher level than this one for us to upset a decision by the Council."

In another action that raised conflict of interest concerns, McCrory went to Washington, D.C. in 1997 to testify as Charlotte mayor against federal clean air regulations for the city that would have cost his employer Duke Energy an estimated $600 million. As a local paper reported at the time:

When asked about a possible conflict of interest arising from his appearance on Capitol Hill as Charlotte's mayor to testify about a matter that would directly affect his employer, Duke Power (where he serves as manager of business relations), McCrory replied, "No, in fact it's quite beneficial because I'm very knowledgeable on the subject."

In the letter it sent to McCrory this week about the latest conflict of interest concern, NC WARN asked the governor to oppose the NCUC provision in the commission overhaul bill and to call for it to be removed from the House version of the legislation. It also asked McCrory to state that, should the section pass in spite of his opposition, he would appoint an independent panel to recommend candidates for the NCUC and abide by its recommendations.

If he fails to do so, NC WARN's Warren wrote, McCrory risks further alienating the people from the government that's supposed to serve them:

The Utilities Commission provisions of the bill would set the precedent that whenever legislative leadership and the governor changes party, the seated commissioners would be thrown out and replaced. It would do away with the Commission's institutional legitimacy as well as its knowledge base and continuity gained by handling its highly complex legal, technical, and policy issues. The public, already skeptical that utility regulation is in the public's interest, would see the Commission as just a rubber stamp wielded by politicians and their utility industry backers. Instead of bolstering faith in the integrity and effectiveness of state government, the bill would take cynicism to a new level.

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Duke Energy and ALEC Attack North Carolina Renewable Energy Portfolio Standard

  • Posted on: 15 January 2013
  • By: Connor Gibson

NC Rep. Mike Hager: ALEC member and former Duke Energy employee.

Corporate polluters are taking aim this year at states with renewable energy laws, starting with an attack on North Carolina's clean energy economy by a corporate front group known as ALEC with support from Duke Energy, ExxonMobil, and Koch Industries. North Carolina state Representative Mike Hager says he is confident that he has the votes needed to weaken or undo his state's clean energy requirements during his second term. Rep. Hager is a former Duke Energy engineer and a member of the American Legislative Exchange Council, or ALEC. Duke and Progress Energy (now legally merged) have given Rep. Hager $14,500 for his last two election bids, outspent only by the NC Republican Party.

This is where ALEC makes things awkward for Duke Energy: the law that Rep. Mike Hager is targeting (2007 SB3) was created with input from Duke Energy, and Duke explicitly opposes ALEC's "Electricity Freedom Act," the model law to repeal state Renewable Energy Portfolio Standards (REPS). Duke Energy re-asserted its support for North Carolina's REPS law to the Charlotte Business Journal last April and Progress Energy publicly supported the law before merging with Duke.

Apparently, Duke forgot about supporting North Carolina's clean energy incentives somewhere along the way. Duke Energy remains a paying member of the American Legislative Exchange Council.

Duke Energy and outgoing CEO Jim Rogers have dismissed over 150,000 concerned citizens demanding that Duke leave ALEC due to its role in protecting polluters, suppressing voters, increasing gun violence and other serious threats to the public on behalf of ExxonMobil, the National Rifle Association, Reynolds tobacco and other corporate interests with a rich history of negligence and dishonesty.

ALEC: The Polluter's Voice

The American Legislative Exchange Council (ALEC) creates model state laws rolling back protections on our health, our clean air and water, public safety, public education…public anything, really. State legislators that support a corporate ideology pay a small fee to become ALEC members, working alongside giant companies to create models bills that are then introduced in states across the country.

In contrast to Duke Energy's "Call to Action" supporting climate legislation and clean energy development, it has not abandoned ALEC's long record of denying climate science and blocking solutions to global warming. ALEC focuses this year on undoing state laws that increase production of clean energy like wind and solar power.

ALEC's Electricity Freedom Act model bill was written by the Heartland Institute, a shill group made infamous for comparing those who recognize climate scientists to terrorists like Ted Kaczynski.

This dirty ambition is ALEC's self-stated priority on energy issues this year--repealing state laws that created Renewable Energy Portfolio Standards (REPS), including North Carolina's SB3. Todd Wynn, a corporate influence peddler who heads ALEC's Energy, Environment and Agriculture task force, named North Carolina as one of several states ALEC will focus its clean energy attacks, citing a debunked report from the Koch-funded Beacon Hill Institute of Suffolk University's economics department. Like ALEC, Beacon Hill is part of the Koch-funded State Policy Network. See the Morning Sentinel and a scathing Portland Press Herald editorial for important critiques of the Koch-funded Beacon Hill reports cited by Todd Wynn.

Actually...Clean Energy has Treated North Carolina's Economy Well!

We've known for decades that phasing out fossil fuels (coal, oil, gas) and ambitiously implementing clean energy not only slows our sprint toward irreversible, catastrophic climate change, but stimulates the economy and creates jobs that do not poison us. In North Carolina, SB3 has helped create the current 15,200 full-time equivalent clean energy jobs in NC, up 3% from the previous year, and generated $3.7 billion in economic activity in 2012 (North Carolina Sustainable Energy Association 2012 Industry Census).

While ALEC has touted a pile of Koch-funded reports written with the pre-determined conclusion that clean energy is ALWAYS too pricey, the Charlotte Business Journal reports that SB3 has a "negligible impact on customer bill increases" for Progress Energy Carolinas' customers, at about 41 cents per month.

If let be, North Carolina's Senate Bill 3 would ensure at least 3% of North Carolina's energy is from renewable sources this year, increasing to at least 12.5% by 2021. North Carolina appears to be one of the first states subjected to ALEC's dirty energy agenda this year.

What Next for the ALEC Attacks?

Expect similar ALEC attacks on clean energy laws in states around the country. According to its own documents, ALEC spent the last couple years monitoring states attempting to introduce state-level renewable energy portfolio standards in West Virginia, Vermont and Virginia as well as legislative attacks on REPS laws in New Hampshire and in Ohio (by Sen. Kris Jordan, an ALEC member).

Now with rumors of war appearing in North Carolina, it appears that ALEC has morphed from the opportunistic observer to the coordinator of attacks on our states' clean energy laws.

For more on how the American Legislative Exchange Council is degrading public policies across the United States, see ALECExposed.org.

This piece was crossposted on Greenpeace blogs.

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