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Insider "605" meetings shape laws

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North Carolina is a major culprit in U.S. greenhouse gas emissions, ranking fourth in the nation in increases of global warming pollution from 1990-2004. That somber report, released last week by Environment North Carolina, underscores the importance of clean energy legislation winding through the state house—including a trip through a little-known working group whose meetings are largely a mystery.

Senate Bill 3 has been saddled with pet projects, including huge sales tax exemptions and financial perks known as "cost assurances" for nuclear plants, both unrelated to renewables or energy efficiency. It would mandate 10 percent of the state's energy to be covered by renewables and energy efficiency by 2018. The House version, HB 77, is more aggressive, setting the benchmark at 20 percent by 2021.

However, SB 3 has become a "comprehensive energy bill" since lobbyists, special interests and state agency staff began tinkering with it during insider meetings.

In political shorthand, the Energy Issues Working Group is known as a 605, named for the room in the Legislative Office Building where it once met to discuss environmental legislation. (Because it has grown to more than 70 members, it now convenes in Room 544.) The 605 has long been a part of the quasi-legislative process, but the give-and-take occurs with little public scrutiny.

The group includes lobbyists from environmental groups, utilities, industrial ratepayers and other interests as well as employees of state agencies whose chiefs are elected or appointedthe Utilities Commission, Department of Environmental and Natural Resources and the Attorney General's office.

Sen. Marc Basnight asked that a 605 convene beginning in mid-February to discuss SB 3; it has met weekly since. In the interim session last year, 605s were announced on Environmental Review Commission agendas, but during the current regular session, no 605 meetings, which are public and streamed on the Internet via the General Assembly Web site, have been publicly announced. The only notification is an e-mail distribution list coordinated by George Givens, a legislative staff appointment to the ERC, who chairs the meetings.

Givens says he will consider placing the meetings on the daily legislative calendar, available at the state house and on the General Assembly home page, but cautions that too much attention could squelch open discussions.

"Generally I'm on the side of open government, but there is some room for folks to exchange viewpoints where they have an opportunity to be wrong or try new ideas," Givens says. "If it were subject to routine press coverage, they wouldn't get as much done."

"I think it should be listed on the calendar," Sierra Club director Molly Diggins says. "I don't see any problem with people coming."

"The interests talking shouldn't be a big public thing," says Elizabeth Outz, director of Environment North Carolina. "But the meetings shouldn't replace the open, democratic process."

State Rep. Paul Luebke, who blasted 605s during a press conference with the House bill sponsors and Environment North Carolina, says the proposed amendments often end up in legislation.

"The bill gets legitimized in 605s and then the senators bless whatever happens."

Basnight says through his spokesperson that 605s don't replace public legislative committee debate.

In SB 3, Duke Energy Carolinas and Progress Energy have sweetened their bitter renewables pill by including nuclear facilities. While nuclear energy emits little if any greenhouse gases, it generates radioactive waste, which must be transported and disposed. There are also safety concerns regarding the plants.

"We believe nuclear has to be a solution," said Scott Gardner of Duke Energy during an animated conversation with Luebke in front of reporters, adding, "There is no incentive for the utilities to do renewable energy."

The Carolina Utilities Customers Association, which represents manufacturers, has inserted a sales tax exemption on electricity and other fuel sources that would cost state and local governments $42 million annually. Sharon Miller, CUCA executive director, says other Southeastern states totally or partially exempt manufacturers from energy sales tax, placing North Carolina at a competitive disadvantage.

The N.C. Farm Bureau has also inserted a proposed amendment that would extend the sales tax exemption to farmers.

"If industry doesn't have to pay some of its sales tax, why should agriculture pay for it when farmers are struggling to stay in business?" says Mitch Peele, senior director of public policy for N.C. Farm Bureau.

Environmentalists are asking for assurances that if animal waste is used as fuel, the provision not be used as leverage against environmental protection regarding hog and poultry farms.

Recommendations move to the Senate committee on agriculture and environment, and if the tax exemptions survive, to finance—where lawmakers can change the bill to their liking. With dozens of pages of amendments to be folded into the bill, it is unclear whose special interests will survive during the final 605 meeting, Thursday, April 19, at 2 p.m.

"We've got a long way to go," Diggins says.

Correction (April 19, 2007): The Sierra Club director's name was misspelled; it is Molly Diggins.

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