Nuclear reactor plan on hold

Promoting energy savings will come first, Progress Energy says. Expect rates to go up

Progress Energy will delay building a new reactor at the Shearon Harris nuclear plant in Wake County and instead push customers to use less electricity.

Robert McGehee, chief executive of the Raleigh utility, said Wednesday that the company will also observe a moratorium on proposing coal-burning power plants as it devotes the next two years to testing whether its 1.2 million customers in the state are willing to commit to energy efficiency.

Progress Energy's emphasis on energy conservation comes amid growing concern over global warming and the environmental damage caused by major power plants.

Under its new programs, the typical customer could cut energy use by about 10 percent to 15 percent, said Lloyd Yates, the incoming president for Progress Energy Carolinas.

Progress Energy is willing to offer solutions, such as leaky duct repair, tuneups for air conditioners, home energy audits and advanced technologies to save kilowatts that are usually wasted.

But the company's proposal could exact a toll on energy hogs who leave lights burning in empty rooms and chill their homes to goose-bump levels in the summer. Progress Energy officials expect to charge all customers a little extra to make up for the revenue lost from those who conserve.

Progress will develop an energy efficiency program to save 2,000 megawatts of electricity, equivalent to the capacity of several power plants.

"Hopefully after two years, we can set even more aggressive targets," McGehee said.

Progress Energy's announcement came on the heels of Charlotte-based Duke Energy's plan to offset about 1,700 megawatts with energy efficiency.

Last year Progress and Duke were among a small group of utilities leading the way to win federal licenses for the nation's first new nuclear reactors in three decades. Duke is still committed to licensing two reactors in South Carolina, and Progress is on track to seek two in Florida.

About two dozen states have laws that require utilities to derive a portion of their electricity from renewables, such as solar and wind, and from efficiency programs. These programs achieve energy savings by charging customers extra to pay for alternative power sources and for efficiency options.

Progress and Duke are backing similar legislation here -- provided the bill also includes provisions making it easier to recover costs for new power plants, even if the plants are not completed.

Progress Energy will invest about $50 million to $60 million a year in efficiency programs in North Carolina, an investment the company would like to recover. The programs are similar to those proposed by Duke Energy and will include duct testing for leaks, home energy audits and promotion of compact fluorescent light bulbs.

Some of the proposals are being tested now, such as remote-controlled thermostats to adjust settings on air conditioners and appliances. The company is also testing equipment that gives real-time readings on energy consumption and cost, to help people change their usage patterns.

The state's consumer advocacy arm, known as the Public Staff, will review the company's detailed proposal when it's filed in September with the N.C. Utilities Commission. To win approval, the plan will have to include a cost-benefit analysis showing projected savings and a plan to measure and verify the savings.

"We support the goal, but we have to be a little skeptical whether they can reach it," said Public Staff Director Robert Gruber. "There's not a lot of specifics in the press release."

The company is looking for options to keep the juice flowing as it adds 25,000 to 30,000 new residential and business customers each year in the Carolinas. That's equivalent to adding about 250 megawatts a year to the company's electricity demand during times of peak demand. For comparison's sake, the Shearon Harris nuclear plant has a capacity of 900 megawatts.

"You can take three to four years of growth out with this efficiency," said Bill Johnson, the company's chief operating officer.

But company officials say that Progress will have to build power plants by 2018 to replace aging power plants and to keep up with growth. In the coming year, Progress will make a final decision on whether to add a reactor to the Shearon Harris plant.

Progress Energy now saves about 1,000 megawatts a year in the Carolinas through programs that encourage energy use during off-peak times. The company has about 30,000 residential customers signed up on "time of use" rates, which charge a premium for using electricity during times of peak demand and give discounts for using power when demand is low.

New programs would add 1,000 megawatts to existing savings.

"These do look like significant numbers," said Michael Shore, senior air policy analyst at N.C. Environmental Defense, an advocacy group on pollution issues. "These are the types of programs that make a difference."