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NC utility warrior seeks a greener peace

ned.barnett@newsobserver.comOctober 26, 2013 

When offered a handshake in greeting last week, Jim Warren held out his left hand. He said his right was sore because of overuse on his computer.

It seemed appropriate to find Warren nursing an injury. The man is by vocation a scrapper who for years has taken on one of the biggest powers in North Carolina – its electric utilities. Through NC Warn, the Durham-based advocacy group he leads, Warren has fought Duke Power and Progress Energy over rate hikes, new plants and nuclear safety. Now, with the state’s two major utilities freshly merged into Duke Energy, he’s up against the nation’s biggest electric utility.

Last week, Warren should have been gearing up for battle after North Carolina regulators upheld a 7.2 percent rate increase for Duke Energy’s customers. The N.C. Utilities Commission dismissed concerns raised by the state Supreme Court in response to a challenge to the rate hike by state Attorney General Roy Cooper.

Cooper said he would repeat his appeal, adding it to three other appeals he has under way against utility rate hikes. But Warren, while opposed to the increases, is looking beyond those technical disputes. Indeed, the champion of consumer rights and public safety said he no longer wants to fight the power company. Now he wants to join forces with it to reduce global warming. Warren’s change in attitude arises from his concern about the change in climate. He thinks global warming is happening faster than we realize and that the risk of letting carbon emmissions fill the atmosphere to the point of natural catastrophe is “white-knuckle terrifying.”

That fear has moved the warrior to seek peace and an alliance with the utility. His pitch is that utilities face a “death spiral” and they need to go green now to save themselves and help save the planet, beginning with the Carolinas.

What he’s telling utility executives is, “We want to find a way to quit fighting and work with you to de-carbonize the Carolinas.” Enlisting the resources and reach of Duke Energy, he said, “could make a huge difference because they’re so big.”

Warren’s proposal may sound Quixotic, but it is the utility executives who are delusional when they tilt at windmills and other forms of renewable energy. Growth in wind, solar and thermal energy combined with advances in energy efficiency and technology that controls power use are decentralizing power generation. As the trend grows, more homes and businesses will unplug from the grid and rely on their own power sources. As the customer base shrinks there will be upward pressure on utility rates, further opening the market for less costly alternatives.

Warren said big electric utilities, “are staring at the abyss.” Many energy executives and analysts agree that huge fossil fuel-based utilities can’t continue as they are, but they disagree about how rapid the changes in power generation and energy use will be.

In the meantime, Warren said, many utility executives and board members plod on from quarterly return to quarterly return, as oblivious as the dinosaurs. “It’s just the inertia,” he said. “This is what they know. They made a buck this way yesterday.”

Others see the risk of new and disruptive technologies. Bloomberg Businessweek noted in August: “There are 3,200 utilities that make up the U.S. electrical grid, the largest machine in the world. These power companies sell $400 billion worth of electricity a year, mostly derived from burning fossil fuels in centralized stations and distributed over 2.7 million miles of power lines. Regulators set rates; utilities get guaranteed returns; investors get sure-thing dividends. It’s a model that hasn’t changed much since Thomas Edison invented the light bulb. And it’s doomed to obsolescence.”

That prospect was raised by a sobering January report from the Edison Electric Institute (EEI), the utilities trade group. It said that said utilities that don’t change will end up like Kodak after it failed to respond to the switch from film to digital. Instead, it said, utilities must get in front of change just as Verizon and AT&T have moved to capture the wireless phone market as land lines disappear.

Like the climate, utilities also face a tipping point. The EEI report noted, “When investors realize that a business model has been stung by systemic disruptive forces, they likely will retreat.”

Warren said Duke Energy should re-conceive its 15-year plan. That means giving up on building costly nuclear plants and weaning itself from fossil fuels as it joins the revolution in solar, wind and other renewable forms of energy.

Lisa Parrish, a Duke Energy spokeswoman, said the utility’s latest plan shows it will use more renewable energy and it is closing or converting coal-fired plants. But Warren said such adjustments are too small and destined to be too late.

Some may dismiss Warren’s urgent call as just another alarm from a group called WARN. But he’s not saying the sky is falling. He’s saying it’s filling. Science says he’s right and utilities, and the rest of us, can’t afford to be wrong.

Editorial page editor Ned Barnett can be reached at 919-829-4512, or nbarnett@newsobserver.com

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