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Duke, in effect, would charge customers the cost of power plants it doesn't have to build because it successfully saved that much energy. That higher cost is meant to be a reward for agreeing to sell less power, which is good for the environment. Duke says the formula amounts to a discount for its customers.

But some consumer advocates say Save-a-watt's complicated billing formula would give Duke too high a profit margin and that the savings from energy efficiency instead should translate into lower rates.

"Save-a-watt is extremely speculative by design and introduces excessive administrative burdens. There are cheaper and better ways to gain energy efficiency," said Shana Becker, a consumer advocate with N.C. PIRG, a consumer protection group.

Reward for risk

But the promise of profits is also a reward for bearing extra risk, Duke spokesman Tom Williams said. A third party would verify the energy savings compared with a baseline year, and the utility wouldn't get paid unless it succeeded in reducing demand, he said. "We want to be compensated."

Under the South Carolina agreement, large commercial users could opt out of some efficiency programs and save the money. Becker called that a giveaway to win support and said it was unfair to smaller users who would have to pay the Save-a-watt fee.

Environmentalists for years have pushed utilities to institute efficiency programs to reduce demand and mitigate the need for future coal-fired power plants, which emit heavy doses of carbon dioxide. The gas is blamed as a cause of global warming.

Utilities have resisted the programs, considered financially self-defeating because they encourage customers to buy less electricity. But Duke and other power companies are now more willing as carbon dioxide regulations appear likely from Congress after the presidential election.

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