Energy bill moves ahead

Cost comparisons would be required

Skeptical lawmakers reluctantly passed a measure out of a House committee Monday requiring the state's electric utilities to increase their reliance on renewable resources and energy efficiency programs.

To soften opposition from environmentalists, the House Committee on Energy and Energy Efficiency said Progress Energy and Duke Energy must meet cost criteria to build nuclear power plants and coal-burning plants. And the committee also added emissions standards so that alternative energy sources such as wood waste and animal waste would not end up causing more pollution than power plants.

The bill now goes to the House Committee on Public Utilities for a Wednesday hearing, bringing North Carolina a step closer to becoming the first state in the Southeast to require utilities to rely on renewable resources and energy efficiency programs.

"I hate some parts of this, but I'm willing to take the lumps," said Rep. Pryor Gibson, a Democrat from Anson County. "We must have just about everything in this bill."

The bill would help Raleigh-based Progress and Charlotte-based Duke save hundreds of millions of dollars on financing new power plants, a sticking point for months. But some were appeased by a last-minute change Monday that would require utilities to prove to the N.C. Utilities Commission that nuclear plants and coal-burning plants are more cost-effective than efficiency and renewable sources before they could build.

The state currently requires that utilities justify a proposed plant's projected cost, but the bill would require a direct cost comparison to other options, said Michael Shore, senior air policy analyst of N.C. Environmental Defense.

Despite continued opposition from many environmental groups, supporters said the changes make the bill palatable, though far from perfect. They emphasized the upside: It would at long last bring renewables and efficiency to North Carolina on a large scale.

"I don't think that it's the apocalyptic bill that the opponents think it is," said Rep. Pricey Harrison, the Guilford County Democrat who chairs the House energy committee. "But I do think we're making it easier for the utilities to make the case for getting new nuclear and new coal plants built. I guess I'm convinced the good outweighs the bad."

The bill would require that 12.5 percent of the electricity sold by Progress Energy and Duke Energy come from efficiency programs and from renewables such as solar energy and farm animal waste by 2021. Municipal utilities and electric cooperatives would have to meet a 10 percent standard by 2018.

Currently, most of the state's electricity is generated by nuclear power plants and coal-burning plants; less than 2 percent comes from renewable sources and efficiency. About two dozen states have a renewable energy standard.

The financing provisions make it easier for utilities to recoup their costs for major power plants by passing the costs to customers sooner. Duke chief executive Jim Rogers has said that his company would not build new nuclear plants unless the state made it easier to finance the risky investments.

The protections in the bill passed Monday would save a utility up to 20 percent on the cost of a power plant. The savings from lower interest payments on a $3 billion power plant could come to $600 million, said Duke Energy spokesman Paige Sheehan. Those savings would be passed on to consumers through lower rate increases, utility officials say.

Because small generating facilities don't have to meet federal clean-air standards, the bill also requires any electricity generated from alternative sources, such as animal or wood waste, meet the highest available emissions standards.

The bill also requires that, to be certified, renewable energy facilities must meet all state and federal laws and regulations to provide electric power in the state.