An energy bill North Carolina can grow with

RALEIGH -- North Carolina is one of the fastest-growing states in the country. Two of the primary qualities that have fueled that growth are a reliable supply of low-cost electricity and a clean environment.

The state's leadership has a history of making balanced decisions to ensure that we do not lose sight of the importance of either quality as we deal with the benefits and the challenges of growth. Senate Bill 3 -- labeled Promote Renewable Energy/Base Load Generation -- is another example of this balanced decision-making.

The North Carolina Chamber, as the advocate for the business community, has a responsibility to carefully evaluate any legislative proposal to ensure that overall it will benefit the economy. There must be a demonstrable benefit for every new dollar of investment and any additional costs. We've carefully evaluated the proposed changes in SB 3 and have concluded that they provide a sound, balanced approach to complex environmental and economic issues for these reasons:

Affordable, reliable electricity is the cornerstone of our economy. It creates jobs and fuels growth. This legislation takes a long, comprehensive view of the state's electricity needs in the coming decades and acknowledges that relying solely on improved efficiency and renewable energy isn't good long-range planning.

In an increasingly competitive marketplace it is essential that businesses be able to anticipate and plan for cost increases. SB 3 provides cost certainty in a couple of key ways: 1) Annual costs to customers for purchasing renewable energy are capped and 2) the costs of energy efficiency programs can only be assigned to the customers that directly benefit from the program.

Renewable energy and new energy efficiency programs have broad popular support. Studies confirm that stimulating renewable energy and new efficiency programs is a responsible way for the state to attempt to meet a portion of the growing need for new electricity. The investment in these programs is a cost to consumers, but it may offset the need for new power plants and ultimately be less expensive than other alternatives.

Important components of the legislation are the continued requirement that the Utilities Commission approve all costs to the customers of the utilities and the authority given to the commission to stop renewable or efficiency programs if they don't work or become too costly.

For many decades, North Carolina has adopted policies that ensured our regulated utilities remained financially sound so they can access the lower-cost capital needed to invest in the state's infrastructure. SB 3 creates new policy with that same philosophy in mind.

The utilities will be allowed to recover the costs of commodities such as limestone and ammonia, which are used in the operation of pollution-control equipment, on an annual basis. These costs can vary greatly from year to year, so recovering them in the same manner as fuel costs makes sense.

The regulatory review process for new power plants, prior to and during construction, is improved. This provides the utility and its investors more certainty about what costs will be recovered in rates once the new plant is placed in service.

Repealing the sales tax on energy used in manufacturing is a critical element of this package. North Carolina is one of the few states that taxes the energy used in manufacturing, which places the state at an economic disadvantage when recruiting new business and industry.

This legislation represents a significant amount of consensus among a wide range of stakeholders. We urge the General Assembly to pass SB 3 and continue its tradition of balanced decision-making to help ensure that reliable, affordable and environmentally responsible electricity remains a cornerstone of our state's economy.

(S. Lewis Ebert is president and CEO of the North Carolina Chamber (formerly N.C. Citizens for Business and Industry).)