July 19, 2007
North Carolina

Clean energy bill has a catch

Provisions make it easier to finance new power plants.

Legislation to force N.C. power companies to be greener would also make it easier for them to build power plants that would pollute, environmentalists and some lawmakers say.

The complex proposal requires Duke Energy Corp. and other power companies to produce 12.5 percent of electricity from energy efficiency programs and renewable sources, such as the wind, the sun and animal waste.

Environmentalists have fought for clean energy requirements for years, increasingly popular around the country. But some say this bill is little comfort because it has several corporate-sponsored provisions, including ones that make it easier to finance new power plants and pass those costs on to consumers.

“This is a bill that was supposed to be about renewable energy,” said Gudrun Thompson, a lawyer with the Southern Environmental Law Center in Chapel Hill. “It’s ironic, and it’s really been at the behest of the utilities.”

The legislation easily passed the N.C. Senate earlier this month. It’s being debated in the House Committee on Energy and Energy Efficiency, where it has been held up over concerns about the financial risk to ratepayers.

Rep. Pricey Harrison, the chairwoman and a Guilford County Democrat, delayed the committee vote because she wants independent experts to testify.

The bill sets up a classic legislative battle pitting consumer advocates and environmentalists against corporate interests. It’s also framed by larger concerns over how to battle global warming, meet skyrocketing power demand in the region and protect consumers.

At least 21 states and Washington, D.C., have renewable energy requirements. The proposed 12.5 percent goal lags those of other states, such as Florida, that are shooting for 20 percent.

Under the proposed N.C. legislation, the cost of renewable energy and energy efficiency programs would be passed on to consumers. Renewable energy can cost more to produce than power from coal-fired and plants that run on other fossil fuels.

Some environmentalists say their original intent to require renewable energy production from utilities has been tainted. Duke and other utilities, eager to build new multibillion-dollar power plants with as little financial risk as possible, have successfully attached their own provisions to the proposed legislation.

At issue are several provisions that would allow utilities to pass the costs of failed projects to consumers, making it easier for Duke to attract Wall Street investment and financing for new plant projects.

Some consumer advocates and environmentalists say new coal and nuclear projects are onerous. Coal-fired plants emit carbon dioxide, blamed as a cause of global warming, and nuclear plants have radioactive waste that has to be stored and have been financially risky.

Another provision in the proposed legislation would let utilities pass on the financing costs of building new plants while they are still under construction.

Current law allows the costs of new plant construction to be passed along only after a plant is operating or if a utility can demonstrate financial distress.

Duke spokeswoman Paige Sheehan praised the bill. She said the only added cost for consumers would come from meeting the renewable energy requirement. The region needs reliable power production to meet growing demand in the Charlotte region, she said.

The company is also planning to build a $2.4 billion coal-fired power unit at its Cliffside facility about 55 west of Charlotte. It also has plans to build two new nuclear reactors in Cherokee County, S.C.

Duke chief executive Jim Rogers said that without the provision to pass on financing costs for the planned $6 billion project, Duke will not move ahead with the nuclear plant.

Bill Could Cost Customers

Under pending legislation, Duke Energy and other utilities would be required to produce one-eighth of electricity through energy efficiency and renewable energy programs.

On residential accounts, the companies could charge an extra $10 a year from 2008 to 2010, $12 a year from 2012 to 2014, and $34 a year after that. Commercial rates for the same time periods would be $50, $150 and $150. Industrial rates would be $500, $1,000 and $1,000.


URL to article:  https://www.wind-watch.org/news/2007/07/19/clean-energy-bill-has-a-catch/