Members of North Carolina’s manufacturing community visited the North Carolina General Assembly on June 11 to share their concerns about how increasing energy costs could negatively impact the manufacturing sector, which would in turn harm North Carolina’s economy. The visits were part of the Carolina Utility Customers Association (CUCA) Day at the Capital.
Manufacturers began raising concerns about the projected increases in December 2023, when the North Carolina Utilities Commission (NCUC) approved a multi-year rate plan (MYRP) for Duke Energy Carolinas’ customers. While the multi-year rate plan projected a first-year increase of 7.2% for industrial users, actual plant data compiled from a sample of manufacturers by CUCA Technical Director Stephen Terry, Ph. D., P.E., revealed an increase of 16.8% in the first year of the MYRP. When factoring in other increases, such as fuel riders, some manufacturers are seeing a 28% or greater increase in utility costs.
“At a time when our state’s leaders are working to create new manufacturing jobs in North Carolina, this drastic rate increase is causing adverse impacts on local manufacturers who are already faced with an increasingly competitive global economy, as well as skyrocketing inflation,” said Kevin Martin, CUCA Executive Director. “When manufacturers suffer, so do their employees and the communities where they are based.”
A representative of a local manufacturer that is the largest employer in their North Carolina town put it bluntly to their legislator, stating that their top three production expenses are energy, materials and labor, respectively.
“The fact that energy costs are outpacing every other cost for manufacturers is a red flag that should not be ignored,” Martin added.
Another leading local manufacturer shared that their energy costs have risen 92% in North Carolina since 2019. They have more than a dozen locations in other states and countries, and their cost of goods clearly shows that North Carolina is out of alignment with the pace of energy cost increases, according to the manufacturer.
According to Worker Adjustment and Retraining Notification (WARN) notices from the North Carolina Department of Commerce, nearly 7,000 manufacturing jobs were lost in North Carolina in 2023.
“This figure far outpaces lost jobs in other industries, and soaring energy costs are a driving factor,” said Martin. “Manufacturers are the bedrock of the North Carolina’s economy, and we need to strengthen our manufacturing sector, not add to their already heavy burden.”
About Carolina Utility Customers Association
Founded in 1983 by North Carolina manufacturers, Carolina Utility Customers Association (CUCA) is a 501 C (6) non-profit trade association representing large industrial manufacturers, or large energy users. CUCA exists to increase members’ competitiveness by maintaining utility service reliability and reducing energy-related operating costs through advocacy, intervention, and education. For more information, please visit https://cucainc.org/.
