If state Senate Bill 3 becomes law, the power companies should throw a big party for the rest of us. That's because every person who pays an electric bill will become an unwilling investor in North Carolina electric utilities, without the benefits of owning company stock, collecting dividends or having a vote.

SB 3 started out as feel-good renewable energy and energy efficiency legislation. However, its major impact is on the fossil fuel and nuclear side of generation. To reduce the significant financial risk to utility companies in building multibillion-dollar coal-fired and nuclear power plants, SB 3 transfers it from private investors, who can cash out of risky projects, to ratepayers, who can't.

This risk and cost transfer is accomplished by allowing power companies to collect the costs of building a new generation unit before it produces even a watt of electricity. There isn't a business owner or corporation that wouldn't love to have that deal. They're stuck persuading banks or the equity markets to finance their projects.

The utilities argue that collecting some of the costs up-front will allow them to secure lower interest rates on construction financing. That lower rate, they contend, benefits ratepayers in the long run.

True, but that's not the whole story. That lower rate is possible only because ratepayers are the captive monetary backstop if construction costs go out of control. Make that, when costs go out of control. Power plants are notorious for cost overruns.

Historically, utilities have been horrible at predicting the price of base load generation. Recent history shows they aren't getting any better at it. Last summer, Duke Energy told the Utilities Commission that an 800-megawatt coal-fired unit at Cliffside would cost $1 billion. Last month, Duke upped the price tag to $1.8 billion. However, that $800 million jump could be chump change if Duke, Progress Energy, the electric cooperatives or municipalities decide to go with nukes.

Though green-power advocates have heaped accolades on SB 3, the greatest financial benefit it bestows goes to nuclear power. On top of construction costs, SB 3 also sticks ratepayers with the developmental costs of "potential" nuclear units. That means a utility could collect revenue on a nuclear plant that exists only on paper. This provision is so generous, it's essentially an incentive for the utility companies to go nuclear.

If all that weren't bad enough, SB 3 allows the utilities to cast a wider revenue net by saddling ratepayers with constructions costs for plants in other states (provided some of that power is dedicated to North Carolina), and even for units that eventually get canceled.

Under SB 3, the Utilities Commission is the only body standing between the power companies and our wallets. The commission is charged with putting the brakes on any unreasonable costs the utilities may want to recover up-front. North Carolina has an able commission and dedicated staff, but they simply do not have the technical resources or manpower to make a meaningful determination. For information and expertise, they'll either depend on the utility asking for the rate increase or on industry consultants. Care to guess how that will turn out?

If all this is news to you, you're not alone. SB 3 has been an insiders' deal from the get-go. Public debate has been virtually nonexistent. Those who testified before the crucial Senate Finance Committee last week were given only two minutes to speak.

As short as the committee's treatment of these speakers was, even worse was the vote. The committee passed SB 3 without any serious financial analysis of its total impact on consumers. The renewable energy portion of this bill has been thoroughly vetted, but the construction cost element remains a deep, dark mystery.

The full Senate passed SB 3 yesterday. Now it's up to the House to fix this mess before it's unleashed on unsuspecting consumers. At the very least, public hearings explaining this bill should be held across the state. Better yet, the House should split SB 3 into two pieces of legislation. I don't much care for the renewable energy part, but I abhor the utilities' attempt to use it as cover to escape the scrutiny of private investors and the marketplace.