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N.C. Textile Mills Rail Against Proposed Energy Rate Hike

Manufacturers in North Carolina, who employ thousands of workers across the state, are voicing strong opposition to H.B. 951, legislation in the North Carolina General Assembly that would result in higher energy costs and harm a broad spectrum of industries, including its textile manufacturers.

The bill is currently under consideration by the Republican Caucus for a vote to advance to the House floor, according to the National Council of Textile Organization (NCTO). A group of more than 30 North Carolina textile companies wrote to members of the state’s Assembly “to express grave concern about H.B. 951 that will prove extremely harmful to North Carolina’s textile manufacturers.”

They said North Carolina has a deep and beneficial history as a national leader in textile production that even with the emergence of global competition, leads the nation with over $2 billion in annual textile exports, and ranks No. 1 in total textile investment in the United States. North Carolina employs more than 33,000 people in more than 600 textile manufacturing facilities and N.C State University is home to the nation’s only college devoted entirely to textiles.

“Media reports have indicated that stakeholders are meeting behind the scenes at the General Assembly to propose ‘major energy legislation,’ the group wrote. “At the same time, Duke Energy has presented a plan to the Utilities Commission to spend some $80 billion on new electric generation facilities and related infrastructure. As long-term substantial investors and employers in North Carolina, we urge the General Assembly to reject any proposal that would result in higher energy costs for the state’s industrial base.”

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The companies said the industry operates in a highly competitive global environment and cannot pass on higher costs to captive customers. On par with raw materials, energy is a leading cost factor in textile manufacturing, they said.

“Further, many countries such as China subsidize energy costs for their textile sector, giving them a substantial, unfair advantage in the global marketplace,” the firms wrote. “As a result, textile manufacturers are extremely sensitive to utility rates and the unfortunate reality is that if not protected from rate increases many of our facilities will cease making investments in this state, while others will shut down entirely and move operations elsewhere. Moreover, any energy cost increasing proposals would be devastating in light of the generational economic crisis being confronted by our industry as result of COVID-19.”

They noted that over the past 15 months, many U.S. textile companies were confronted with idle capacity, rampant cancellation of orders, plant closures, and workers being furloughed. Textile orders for the military also declined because of Covid restrictions.

“Regrettably, conditions have been so severe during the pandemic that century-old textile companies that survived the Great Depression, the onslaught of imports over the past 40 years, and the recent Great Recession have faced possible bankruptcy,” the letter stated. “COVID-19 has created an unprecedented destruction of demand for apparel and textiles. Billions of dollars of orders for U.S. fiber, yarn, and fabric were cancelled last year as retail shopping outlets were closed for many months and then operated at reduced capacity.”

The group concluded by encouraging the legislators to study market competition “to better understand opportunities to ensure that energy rates in North Carolina are set at levels that allow manufacturers to remain competitive in the global marketplace.”

North Carolina textile mills are voicing strong opposition to a bill in the sate Assembly that would result in higher energy costs.
Jay Flanary, Frontier Yarns NCTO

The Carolina Utility Customers Association (CUCA) held a press conference on Monday for the same cause–to highlight the impact a 50 percent increase in industrial customer rates will have on its members.

Several industrial executives personalized the impact these cost increases would have on the industry. Dan Nation, director of government affairs for Parkdale Mills, noted that his company has nine plants in North Carolina and a 50 percent increase in energy costs over the next 10 years would devastate his company.

Jim Booterbaugh, president and CEO of National Spinning, which has 350 employees in North Carolina, said the rate increase would end any thought of facility expansion, a comment echoed by Allen Smith of Elevate Textiles, who described the global environment in which the industry operates.

Brian Rosenstein, the CEO of TSG Finishing, talked about the long history of textiles in North Carolina and how his firm has operated in the state since 1960. Jay Flanary, director of manufacturing at Frontier Yarns, argued that his company competes in the market every day, and he encouraged North Carolina to study competition in energy markets.

CUCA was joined by environmental and consumer advocates including Southern Environmental Law Center (SELC), the North Carolina Justice Center and Appalachian Voices. Each of these groups also opposed the legislation for reasons such as it does not help North Carolina reach its climate goals, it replaces coal plants with natural gas and it continues Duke Energy’s overearning as rate increases are allowed through a multi-rate schedule. SELC and the Justice Center spoke of the negative impacts to low- and moderate-income residents across the state.