Jul. 16--RALEIGH

For years, environmental advocates have pushed for North Carolina to require its power companies to use a set amount of renewable energy sources, such as wind energy, solar energy or animal waste. This year, that might happen -- but the bill that would do it also includes provisions that some advocates say would hurt the environment by encouraging more coal and nuclear power plants. The bill, which was overwhelmingly approved by the N.C. Senate, is now being studied by the N.C. House of Representatives. It would require Duke Energy and Progress Energy to generate a significant amount of their electricity through renewable sources.

The bill is expected to face a tougher fight in the House than it did in the Senate. The House energy committee is scheduled to hold a three-hour public comment period on the bill today in Raleigh at 3 p.m. According to the proposed bill, by 2021 the companies would have to generate at least 12.5 percent of their electricity through renewable energy sources. They could also meet the requirement through energy-efficiency programs. The idea is known as a renewable-energy-portfolio standard, and more than half of U.S. states have adopted such standards at varying levels. Until recently, Southern states have been reluctant to consider renewable-energy standards, which are likely to ncrease customers' electricity rates because, at least for now, generating power from renewable sources is more costly than using traditional power plants.

Last week, Florida Gov. Charlie Crist, a Republican, signed three executive orders that will cut the state's greenhouse-gas emissions and increase its use of renewable energy. It's critical that North Carolina follow suit, said state Rep. Pricey Harrison, D-Guilford, who is the chairwoman of the House committee on energy and energy efficiency. "It's clear that we're facing a problem with global climate change," Harrison said. "We have to wean ourselves off fossil-fuel-based energy, and we don't really have a choice about that." The question for environmentalists is whether the current version of North Carolina's renewable-energy bill would actually achieve that goal.

The original version of the bill dealt only with renewable energy. But as the bill made its way through the Senate, additional sections were added to the bill that would help companies finance new coal and nuclear plants. While new plants are under cons ruction and before they ever come on line, power companies would be allowed to incorporate the financing costs into the electric rates that customers pay. Under current law, companies are not allowed to charge customers for the costs of future plants. Sixteen environmental groups sent a letter last week to House Speaker Joe Hackney, D-Orange, to protest the bill's financing provisions.

"Effectively, these provisions accelerate the construction of the very plants that renewable energy and efficiency measures are intended to offset," the letter says. The groups also have concerns about the environmental effects of converting animal waste to energy. A few other environmental groups, including the N.C. Sierra Club, are monitoring the bill and are not opposed to it in its current form. Duke Energy supports the bill "as a whole package," said Paige Sheehan, a spokeswoman for the company. She said that the piece of the bill that would ease financing for power plants could result in lower costs and by extension lower electricity rates for customers.

"If you recover your financing costs during construction, it can lower the overall cost of the plant because the interest does not accrue," Sheehan said. But House members said they are concerned that the financing bill could allow higher rates for customers, on top of the increases that would be phased in because of the renewable-energy standards. -- James Romoser can be reached at 919-833-9056 or at jromoser@wsjournal.com.