Dan Nation, director of Government Affairs at yarn spinner Parkdale (Photo © Devin Steele)
Jim Booterbaugh, president & CEO of National Spinning Co. (Photo © Devin Steele)
Reporters covering the press conference at the N.C. Legislature (Photo © Devin Steele)
Dan Nation, director of Government Affairs at yarn spinner Parkdale (Photo © Devin Steele)
N.C. textile execs mobilize, sound alarm on energy bill
Posted July 1, 2021
By Devin Steele
RALEIGH, N.C. – Executives of textiles companies representing well over 500 years of collective history in North Carolina mobilized in front of the N.C. Legislature here on June 28 to rally against proposed energy legislation in the state’s General Assembly.
These leaders say House Bill 951, currently under strong consideration by the Republican Caucus for a vote to advance to the House floor, would result in much higher energy costs and harm business and electricity customers.
In advance of the press conference, organized by the Carolina Utility Customers Association (CUCA) and the National Council of Textile Organizations (NCTO), 31 North Carolina textile companies signed a letter that was sent to the General Assembly. They urged lawmakers to reject any energy rate increasing proposals, including those proposed in H.B. 951, and to make cost controls a central component of any new energy legislation.
Even with the emergence of global competition, North Carolina leads the nation with more than $2 billion in annual textile exports, and it ranks No. 1 in total textile investment in the U.S., the letter stated. With this level of investment, the state employs more than 33,000 people in 600+ textile manufacturing facilities, it continued. Additionally, N.C State University is home to the nation’s only college devoted entirely to textiles, the Wilson College of Textiles.
“This state has a deep history as a national leader in textile production,” said Dan Nation, director of Government Affairs at yarn spinner Parkdale, a 105-year-old yarn spinner with headquarters in Gastonia, N.C., that operates nine of its 23 plants in the state and employs nearly 1,000 people in N.C. “It's a proven fact that a manufacturing job creates and sustains at least three adjacent jobs, so our industry supports over 120,000 jobs in this state.”
So important is this issue that textile leaders hastily arranged the Monday press conference after a conference call just three days before, on Friday. They converged on the capital city from all corners of the state – and even from Philadelphia, corporate headquarters of TSG Finishing – to sound the alarm on the potential devastating impacts of legislation that could raise energy costs up to 50 percent over the next 10 years, according to Kevin Martin, executive director of CUCA. (The event garnered media coverage throughout the state.)
Their warnings were dire and urgent:
“(The legislation) will cripple our plants and will definitely push investment out of this state and into other states, causing North Carolina lose jobs,” said Nation.
“We're currently looking at an expansion for one of our facilities … and now we're questioning whether going forward that new facility can be in North Carolina because of impending utility rates,” said Jim Booterbaugh, president & CEO of 100-year-old National Spinning Co., which employs 350 people in the state and has corporate offices in Washington, N.C., a yarn-spinning facility in Whiteville, N.C., a fiber-blending plant in Kinston, N.C., and a nonwovens subsidiary in Maiden, N.C.
“As a service-based textiles company, the relationships with our customers and our vendors are the key to our success. That’s why we refer to them as partners. These actions (initiated) by Duke Energy are not what a partner does in a business relationship, and this bill will affect both our business as well as our families and will make it harder for us to operate as a going business in North Carolina. I personally get phone calls on a regular basis from economic development groups from other states, and this is the type of bill that will have me answering those calls,” said Brian Rosenstein, fifth-generation CEO of family-owned, 121-year-old TSG Finishing, which operates all of its manufacturing facilities in Hickory, N.C., and employs about 200 North Carolinians.
“This would impact future decisions about where we expand – and clearly we have options to expand elsewhere – so we need to think about what this does long-term,” said Craig Yokely, executive vice president of Custom Fabrics at Glen Raven, based in Glen Raven, N.C., which has operated in the state for 135-plus years and employees more than 700 people in the state.
“As a leading textile company, we operate in a highly competitive global market, and energy contributes significantly to the cost of our products. Increases in energy costs would negatively impact our ability to competitively manufacture in this state, potentially affecting the viability of the longstanding industrial base in North Carolina. We continue to invest in North Carolina, operations and workforce, and rely on this state to maintain competitive infrastructure costs,” said Allen Smith, president at American & Efird, who was representing the entire Elevate Textiles’ Charlotte, N.C.-based conglomerate, which employs 2,250 people at eight manufacturing sites and a distribution center in N.C.
“H.B. 951 will be devastating to the North Carolina textile manufacturers. In the Southeastern U.S., we have a clear advantage due to reasonably priced electricity, and energy is a leading cost in the manufacturing of textile products. We cannot afford to risk those jobs with reckless pricing,” said Jay Flanary, director of manufacturing at Frontier Yarns, Sanford, N.C., which runs four plants and employs about 1,000 North Carolinians.
In addition to these speakers, several other textile executives were on hand for the event, including representatives of 141-year-old Shuford Yarns in Hickory, N.C. Joining speakers were environmental and consumer advocates organizations, including representatives of the North Carolina Justice Center, the Southern Environmental Law Center and Appalachian Voices.
“In 2019 Duke Energy fought for multiyear rate planning, which is the ability for the utility to increase rates each year without a rate case at the Utilities Commission,” said Martin in his opening remarks. “It was defeated then, and we are asking that it be defeated again here in 2021. The costs are simply too great for customers. Impact numbers have been released, but there are games and semantics being played with these numbers. Bottom line, if this bill passes, significant rate increases will be associated with this bill.
“Duke still has not engaged openly with customers about these issues and what can be done to address the impact of rate increases,” he continued. “The bill was supposed to be about fixing problems, but it is not. It's about Duke protecting its earnings and getting multiyear rate planning. If it were about fixing problems, all options would have been on the table, including electric market reform and competition. Duke could use some competition right now.”
For the textile industry and other industrial producers, such rate hikes could wreck a sector as it emerges from the coronavirus pandemic, according to Booterbaugh.
“We face lots of challenges,” he said. “Last year we faced COVID, where we had lack of demand and we had to fight through that. This year, we're facing inflationary measures, and then from time to time, we need to modernize in order to remain competitive. When Duke Energy needs to modernize, they put in rate increases, and the nice thing is that Utilities Commission is there to check those rate increases and make sure they're fair to organizations like ours.
“We don't have that,” he continued. “We have to compete with other textile companies here and abroad. One thing in North Carolina that has helped us is good utility rates. With a 50% increase that we're looking at potentially over the next 10 years, North Carolina is not going to be competitive going forward.”
Rosenstein told eTC: “We've been fortunate during the pandemic that our supply chain, with everything that's going on with labor and raw materials, to be able to manage pretty successfully because we have partnerships with our vendors. But when something like this comes up, it's almost an almost impossible situation – there is no middle ground, it's black or white. So we have to fight for what's in our best interest.”
From the podium, Rosenstein said that a bill of this nature will hamper TSG Finishing’s efforts to grow and develop more environmentally friendly technology, as well as continue to support the United States military and the medical business with critical Personal Protective Equipment (PPE).
Flanary said the industry opposes performance-based rates in multiyear rate planning because it gives utility companies the ability to raise rates in three-year planned increments – without oversight from the Utility Commission or scrutiny from the public staff.
“There is currently a public process where state employee experts scrutinize any proposals,” he said. “These decisions are not always in our favor, but it needs to be continued. We ask that you study opportunities for competition in electric markets. Competition is proven to lower cost. This could result in hundreds of millions in savings for North Carolina customers.”
Many countries such as China subsidize energy costs for their textile sector, giving them a substantial, unfair advantage in the global marketplace, according to the letter sent to lawmakers. As a result, textile manufacturers are extremely sensitive to utility rates, it continued.
“The industry is growing. Business is good for many,” Nation told eTC. “We have our share of problems, and we don't need power to be one of them. Energy is one of the highest cost components of our manufacturing processes across the board. Whichever process you’re talking about, all of us are very concerned about energy.”