As I headed to Raleigh on Monday, I was sure that my week would involve long meetings with Senate conferees on the education portion of the budget. I was wrong.
While I attended public meetings of the full conference committee that received lots of press coverage, particularly when the Senate conferees walked out, I never met with my counterparts who have responsibility for negotiating the differences between the House and Senate budgets on education spending. Why was that? Well, we don’t have a target. In other words, we haven’t been given the number that we need to hit to create a balance budget. We can’t decide how much to allocate for school buses, computers, textbooks, teaching assistants or a myriad of other education-related programs until we know how much money we have.
The holdup involves some big issues; the biggest being teacher pay. The Senate wants an 11% pay raise for teachers, and the House has offered 6%. If the Senate gets its pay raise, the money to pay for that has to come from somewhere, and the cuts would likely come from allocations for teaching assistants, textbooks and a range of health and human services, such as the child care subsidy.
One major issue went away when the Senate decoupled tenure (technically “career status”) from the pay raise. While that has no financial implications, it was a significant concession. For its part, the House also conceded on a lottery-related issue. However, these concessions didn’t move the process far enough along that the conferees on education funding and on health and human services funding could start negotiating.
At this point, we are on call. With my cell phone on, I’m heading back to Henderson County.
Even though we didn’t make a lot of progress on the budget, I still had a productive week. While the House passed its coal ash bill last week, my task this week was to begin work on refinements to the bill to put forward when the House and Senate conference their differences.
The House’s coal ash bill, which still carries the Senate number, Senate Bill 729 [Coal Ash Management Act of 2014], passed the House on a 94-16 vote. All Republicans and a majority of the Democrats supported the bill. The debate on the bill was in some ways similar to the debate in the Senate. Members with coal ash ponds in their districts sought to circumvent the process by having their coal ash pond designated as “high priority” so that their cleanups would occur first and so that their coal ash ponds couldn’t be “capped in place.”
One amendment that was defeated actually would have defined almost all of the coal ash ponds as “high priority.” In arguing against that amendment, my point was that, if everything is “high priority,” then nothing really is since there would be no priorities.
Another issue that was debated at some length was the cost issue, specifically who pays. Both the Senate and the House bills don’t directly decide this issue, primarily because the bills focus on getting the coal ash ponds prioritized, getting cleanup plans approved and starting the work. Duke Energy can’t get a rate increase related to the work on the coal ash ponds until the work is done, and it is really premature to face that issue — at least, that is my view.
In arguing that Duke Energy’s shareholders should eat all of the costs related to coal ash ponds, proponents of that position seemed to forget that we are generating a lot of energy right now from coal. Coal ash is a byproduct of that energy production and, as such, I believe is properly an expense borne by the ratepayers.
In other words, the cost issue isn’t black and white. Some costs relating to coal ash are properly borne by Duke Energy’s shareholders because Duke Energy didn’t always act prudently. On the other hand, if we mandate that coal ash going forward has to be handled in some particular way, those costs should clearly be borne by the ratepayer.
One issue — a very technical issue known as the “compliance boundary” — probably is the reason why the House bill didn’t garner unanimous support. Under current state law, if one runs a landfill or has a coal ash pond or has a manufacturing facility that pollutes groundwater, one doesn’t violate state law until the pollution reaches the compliance boundary. Sometimes that means when the pollution reaches the property line, but more often that means a certain distance from the source of pollution.
In the last legislative session, the General Assembly passed a regulatory reform bill that, while intended to clarify the compliance boundary issue, only complicated it. Since the last legislative session, there has also been litigation over the issue. The House bill, unlike the Senate bill, directly addressed the court decision interpreting NC law and rules on compliance boundaries for coal ash ponds.
There were a myriad of different issues addressed by the nearly three dozen amendments offered in committee or on the floor. The best way to understand the legislation would be to look at the latest bill summary.
The bottom line is the coal ash bill is a very complex piece of draft legislation. As it winds its way through the legislative process, it is changing in response to criticism and concerns raise by various groups, but primarily the environmental community, the regulator (the NC Department of Environment & Natural Resources or DENR), and Duke Energy. My perception is that the environmental community had low expectations for the Senate bill, and expectations that the House would produce a stronger bill than the Senate. The Senate exceeded those expectations, but that made it hard for House members to meet expectations for their bill.
DENR and the McCrory Administration argued that the Senate and House bills are unconstitutional because the General Assembly is taking away the Governor’s power to appoint the majority of an independent board that will ultimately make most decisions relating to coal ash. Aside from those arguments, most of DENR’s concerns revolved around the timetables for accomplishing various tasks like prioritizing the coal ash ponds and approving cleanup and closure plans.
Duke Energy has kept a low profile. Its folks are genuinely embarrassed by what has happened, and its lobbyists have tried to be responsive to legislators’ requests for information. With that said, Duke Energy probably prefers the House bill to the Senate bill, because of some leeway provided by the House bill in meeting various schedules and because of the House’s effort to clarify the compliance boundary issue.
Rather than working on the budget, my week started with a meeting with environmental leaders, followed by a meeting with DENR representatives and then lots of communications with constituents, coal ash recyclers, Duke Energy, large energy users, and a host of others. At week’s end, the Senate hasn’t taken action on the House bill, but is expected to “not concur” which will cause the appointment of a conference committee on which both Senator Apodaca (R-Hendersonville) and I will likely serve.
I am not sure what to expect next week. While many hoped that we’d be home by this date, it seems pretty clear that we’ve got at least two more weeks, assuming we can get movement on the budget next week. If no progress is made on the budget next week, I’ve still got plenty of work to do on the coal ash legislation so I expect to stay busy.