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Duke Energy pays lip service to efficiency

Never mind global warming, officials say, they need their coal



On the morning of Sept. 12, a headline blared from the front page of The News & Observer: "Gases heat seas, stoke storms, scientists say." The story, one of hundreds of media reports this year about the perils of global warming, explained that greenhouse gases are heating ocean surfaces where hurricanes form.

Coincidentally, Sept. 12 was also the first day of Duke Energy's testimony before the N.C. Utilities Commission about its proposed new coal-fired power plants. Duke Energy Carolinas President and CEO James Rogers has waxed poetic before Congress about limiting carbon dioxide emissions from coal-fired power plants, the primary culprit in global warming. He's penned op-eds in major newspapers lauding energy efficiency and conservation. And in the utility's 2005 annual plan he wrote, "As a major coal-burning utility, some might expect us to duck this issue, but avoiding the debate over global climate change and failing to understand its consequences are not options for us."

Yet, Rogers' purported allegiance to clean energy doesn't square with reality. Despite the worldwide red alert over carbon dioxide's contribution to catastrophic climate change, one of the nation's largest utilities has made few inroads into energy efficiency or conservation.

Moreover, Rogers, who also sits on the National Coal Council board, is asking the N.C. Utilities Commission for a certificate of public convenience and necessity to build two 800-megawatt coal-fired power plants near Charlotte. Although Duke would retire four outdated Cliffside units as part of its air permit requirements, if approved and constructed, the new, cleaner plants, Cliffside 6 and 7, would still belch an estimated 11.5 million tons of carbon dioxide annually.

"It's not either-or," Rogers told the state commission last month, adding the new plants are essential to meet the state's future baseload electricity demands. "Cliffside will not reduce our commitment to sound and cost-effective energy efficiency programs."

Considering Duke's weak commitment to these programs, it would be difficult for the utility to reduce its support much lower. The utility's effete energy efficiency initiatives fail to meet the benchmark set by the National Action Plan for Energy Efficiency, which Rogers co-chairs. The NAPEE has recommended that 1 percent to 3 percent of a utility's annual revenues should go toward energy efficiency programs--in Duke's case, $46 million to $50 million.

"You've incorporated nowhere that aggressive of an energy efficiency plan?" Gary Davis of the Southern Alliance for Clean Energy asked during the hearing.

"That is correct." Rogers replied.

Duke's $2 million energy efficiency and conservation campaign, required as part of the Cinergy merger, includes mailing educational booklets to 50,000 ratepayers ($690,000), providing educational videos to 140,000 customers ($715,000) and offering online, phone or onsite efficiency audits ($445,000) and Web-based tools ($150,000) to large industrial and commercial customers.

Duke's 2005 annual plan added no new efficiency programs; its 2006 plan allots 200 megawatts for energy efficiency and conservation--twice that of 2005--but lists no specific initiatives.

Duke isn't America's lone coal crusader. Cliffside 6 and 7 are just two of the 153 proposed coal-fired power plants in the nation, according to the Department of Energy. And no wonder: The Energy Policy Act of 2005 contained $9 billion in coal subsidies, nearly twice the incentives given to renewable programs. While the law extended renewable energy production tax credits for two years, it was stripped of a national renewable energy standard. However, several states, including Texas, have such a standard, requiring utilities to generate a percentage of their power from wind, solar, biomass or other renewable sources. In North Carolina, the utilities have beaten back legislative attempts to pass such a compact.

N.C. Waste Awareness and Reduction Network, among the groups questioning Duke at the hearing, says building new plants works at cross purposes with energy efficiency and conservation.

"In North Carolina, we can't go both directions," says Jim Warren of NC WARN. "The utilities are about to drag the state down a dark alley of their failed strategies."

The commission is expected to announce its decision this fall. It remains to be seen which dire prediction will sway its members: Rogers' prognostications of brownouts and economic decline if the plants are canned, or the scientific consensus that global warming and greenhouse gases are wrecking the planet.

Unwinding the spin

For three days in mid-September, top Duke Energy officials testified before the N.C. Utilities Commission about the company's $2 billion proposal to build two new, 800-megawatt coal-fired power plants. Information and quotes are excerpted from the official hearing transcript.

On the necessity of new plants:

James Rogers, president and CEO of Duke Energy Carolinas, is the co-chair of National Action Plan for Energy Efficiency, a venture between the Environmental Protection Agency and U.S. Department of Energy. A statement from NAPEE's executive summary, which was read in the hearing, states: "Capturing this energy efficiency resource would offer substantial economic and environmental benefits across the country.... This scenario could defer the need for ... 40 new 500-megawatt coal plants."

Janice Hager, Duke Energy Carolinas vice president of rates and regulatory affairs: "I strongly believe in what the NAPEE report says about the ability to defer plants; we just don't believe it's these plants."

On energy efficiency programs:

Rogers: "With the right collaboration, right consensus and the right regulatory treatment, we could beat that number [100 megawatts of energy efficiency] over time."

Hager: "I think that what it means to give it high priority is that we move forward aggressively on energy efficiency, and I believe we are doing so."

Hager: "We believe that 100 megawatts is the magnitude of energy efficiency. We're not adding any more energy efficiency capacity beyond 101 megawatts."

Rogers: "We're prepared to step up and invest in energy efficiency programs for prolonged periods of time, but we didn't put a specific time or dollar amount because we thought that would be presumptuous."

On "collaboration":

To generate recommendations for energy conservation and conservation measures, also known as demand side management, the utility has formed a "collaborative group" including Environmental Defense, the State Energy Office, Olde South Homes, Food Lion and UNC.

Richard "Stick" Williams, Duke Energy's vice president of diversity and employee development, sits on the UNC-Chapel Hill Board of Trustees. UNC-Charlotte received a $10 million gift from Duke Energy, which also endowed a professorship for the university's Global Institute for Energy and Environmental Systems to research energy and environmental issues. There was no collaborative group to discuss the proposed new coal-fired power plants

On Duke's political clout:

Responding to an attorney's question, "Would you agree that Duke Energy has a certain degree of political clout in North Carolina?" Rogers said: "I don't know enough to comment on that."
According to state election documents, since July 2005, Duke Energy's political action committee has contributed more than $101,000 to state legislators and party committees. Of that amount, $13,000 went to chairmen and vice-chairmen of the House and Senate rules committees, including $4,000 to state Sen. Walter Dalton, who represents Rutherford and Cleveland counties, where the Cliffside plants are located. In the rules committees, the Energy Future Act of 2006 died at the 11th hour last session, despite assurances from House leadership to its sponsor, state Rep. Pricey Harrison, that it would pass. The proposal would have allocated $95,000 to study the health impacts of fossil fuels and the environmental benefits of renewable energy, conservation and energy efficiency.

On the health costs of pollution emitted from coal-fired power plants:

Hager: "We don't include the health costs associated with residual emissions because it's not the appropriate thing for us to do."
According to a 2004 report by Abt Associates, coal-fired power plants are responsible for 38,000 non-fatal heart attacks, a half-million asthma attacks and 24,000 premature deaths in the United States each year. The report was commissioned by several environmental groups, although Abt also consults for the EPA and the Bush administration.

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