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Can N.C. up the ante on renewable energy?

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When the General Assembly enacted Senate Bill 3 in 2007, it was an important step toward using more renewable energy sources for electricity in North Carolina—and a step away from coal, and perhaps from nuclear power as well.

Since then, however, renewable-energy technologies have blossomed to the point that the modest goals established by SB 3 are already outdated. A spate of reputable studies indicate that North Carolina should set its sights far higher. They show that renewable sources—including solar cells, offshore wind turbines, biofuels and hydropower—combined with strong energy efficiency programs, could account for at least 40 percent of the state's electricity needs within 15 years.

North Carolina was the 29th state, but the first in the Southeast, to adopt a minimum requirement for the use of renewable power sources by the electric utilities. But North Carolina's REPS—short for Renewable Energy and Energy Efficiency Portfolio Standard—requires just 12.5 percent of electricity that is sold to come from renewable sources, and energy efficiency by 2020. Other states have more aggressive benchmarks: New York calls for 29 percent by 2015, and California, 33 percent by 2020.

"There is no question that North Carolina can do much more than 12.5 percent with energy efficiency and renewables," says Elizabeth Ouzts, state director of Environment North Carolina, a nonprofit research and advocacy group. "SB 3 was a great first step, but there's so much more we can do, and we need to put the policies in place that can help make it happen."

Exactly what those policies should be, however, is a much-debated subject in progressive circles leading up to the 2011 legislative term.

In a recent report, Environment N.C. found that solar power could provide 2 percent of the state's electricity by 2020 and 14 percent by 2030. To reach those goals, North Carolina would need to grow solar-cell installations by 54 percent annually—what California has done in the last decade.

After that, from 2020 to 2030, a growth rate of 20 percent per year would be sufficient.

Those might seem like daunting targets, but according to Environment N.C., they're not. In 2008, North Carolina increased solar-power capacity by 600 percent with the opening of several solar "farms" like the one at SAS in Cary.

Installing solar panels on 100,000 rooftops over the next 10 years, and on 700,000 rooftops by 2030, would take North Carolina halfway to its goals, the report found, with SAS-scale installations accounting for the rest.

As for wind, a 2009 study done for the General Assembly by University of North Carolina researchers indicated that there's enough offshore wind power within 50 miles of the state's coastline to meet all of the state's current electricity needs.

The federal government has divided the coastline into 311 tracts, each measuring nine square miles. If 45 of them were developed as offshore wind farms, they could supply 20 percent of the state's electricity.

UNC and Duke Energy have since announced a demonstration project in the Pamlico Sound, testing up to three wind turbines for cost, effect on migratory birds and other environmental and socioeconomic impacts.

The North Carolina studies comport with an analysis by the World Resources Institute of "clean power opportunities" in the southeastern United States. In North Carolina, the institute study found, renewables could supply 40 percent of the state's electricity by 2025. Costs would be comparable to those of conventional power sources—coal, nuclear, natural gas—but with major advantages in air quality, reduced water consumption and zero "climate impacts," it said.

The institute analysis didn't include energy-efficiency programs. But a 2009 scorecard from the American Council for an Energy-Efficient Economy did. It rated North Carolina 26th of the 50 states for efficiency, including state building codes and utility-sponsored incentive programs. With more aggressive policies, the council study found, North Carolina could reduce electricity usage by almost one-fourth by 2025. In the next 20 years, renewables (40 percent) combined with energy-efficiency (24 percent) could account for nearly two-thirds of the state's electric-power needs.

Today, renewables account for just 3 percent of the state's electricity, with nearly all coming from biofuels and hydropower. Coal accounts for nearly two-thirds, nuclear for 31 percent.

To reach these goals, however, advocates of renewable power will again need to grapple with nuclear power. When SB 3 was enacted, the state's investor-owned utilities—Duke Energy and Progress Energy—insisted that the Legislature include a provision guaranteeing that any money the companies spend on nuclear plants, no matter how much, must be compensated with higher rates.

The CWIP provision (for construction work in progress) assured that the utilities would recover nuclear plant costs in any rate case. But now, Duke Energy is lobbying for SB 3 to be changed so that utilities are compensated for CWIP costs as they're incurred, without an overall rate review.

For utility customers, rate increases related to nuclear plant construction costs would come sooner; any savings resulting from the actual production of nuclear power would come later.

Duke Energy officials (but not Progress Energy) pitched the CWIP change in a recent meeting with legislative leaders and a few "legislative skeptics," says state Rep. Pricey Harrison, D-Guilford, a self-described "skeptic."

"When they were arguing for SB 3," Harrison said, "the utility lobbyists would say the CWIP provision they were after was better [for ratepayers] than the ones in Florida, Georgia and South Carolina. Now they're back asking for what they have in the other states."

Harrison worries that if the Legislature reopens SB 3, including the 12.5 percent target, it will have to consider the CWIP rule, too. "It's very frustrating," she adds, "because, as a veteran of these utility debates, I can tell you the utilities always win."

The alternative, she suggests, is to leave the REPS target alone while enacting policies to push the state past it anyway.

Such policies could include long-term "feed-in" rates for solar- and wind-farm developers who sell power to the utilities, which would help them raise capital, Ouzts says.

At the N.C. Sustainable Energy Association, whose members include companies selling solar, wind and energy-efficiency products, Deputy Director Paul Quinlan says the options are under debate by groups working with the Energy Policy Council, which is closely affiliated with Gov. Bev Perdue.

Four council groups, working on renewables, efficiency, carbon emissions and transportation, have a mid-September deadline for reporting, prior to the next scheduled EPC meeting Sept. 24.

State Sen. Josh Stein, D-Wake, who also attended the session with Duke Energy, said he understands Harrison's hesitance about reopening SB 3. "Whenever you have complicated and delicately negotiated legislation," Stein says, "different groups will be nervous about revisiting it."

But Stein thinks the untapped potential for renewable power and energy efficiency in North Carolina is too great not to take a fresh look. "I think positioning North Carolina for a clean-energy future is what we need to do."

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