Sep 28, 2007 - Knight Ridder Tribune Business News
Author(s): Kim Leonard

Sep. 28

Pennsylvania's approach to ensuring a steady power supply at reasonable costs in coming years can't focus just on developing wind and other so-called environmentally friendly technologies, Morgan K. O'Brien, CEO of Duquesne Light Co., said Thur day.

O'Brien jumped into the ongoing fray in Harrisburg over Pennsylvania's energy policy, advocating in an interview a "common sense middle ground" that stresses low-cost power and economic growth along with environmental benefits. That means talking more about investing in clean-coal technologies -- using a plentiful resource that already generates 55 percent of the state's electricity -- and perhaps putting less emphasis on wind and solar power, he said at Duquesne Light's headq arters, Downtown. It means allowing Pennsylvania utilities to buy power in such a way that makes prices competitive with those in other states, O'Brien said.

And it means conservation steps that "make sense" by focusing on industries and other big users of electricity, r ther than homeowners. "There needs to be a balance between what's good for the environment and good for the customer," he said. Duquesne Light has 585,000 customers, primarily in Allegheny and Beaver counties. O'Brien outlined the utility's position yesterday as a special legislative session on a wide range of energy initiatives continued in the state's capital. Gov. Ed Rendell's Energy Independence Strategy calls for a charge on utility bills to create an $850 million fund that would support alternative energy and clean fuel technologies, along with conservation programs.

Senate and House Republicans are pushi g their own plans with a mix of clean energy and conservation initiatives. The state Public Utility Commission, meanwhile, has pushed utilities into an open-market method of buying electricity for their customers, O'Brien said. But he said utility companies need more flexibility to secure energy in a variety of ways -- through long-term, negotiated contracts as well as open-market auctions -- to control costs. John Hanger, president of Citizens for Pennsylvania's Future, which supports Rendell's plan, questioned whether O'Brien's support for coal-fired generating plants is workable.

True "clean-coal" technology that captures and stores carbon emissions isn't ready for use, Hanger said, and it doesn't address the mining industry's damage to the environment. "Frankly, we believe very strongly that in the future we will not be burning rocks to make electricity," he said. As to the argument that wind and solar power remain inefficient, Hanger said, "Mr. O'Brien needs to ask where these technologies are moving," and added that in 10 years, solar equipment likely will be included in most new homes. State Consumer Advocate Sonny Popowsky said O'Brien makes some good points when it comes to buying power, adding Duquesne Light has "done a better job than any other utility in the state" of controlling customers' costs under deregulation.

The company proposed a six-year price for residential and small business customers in 2004 that was "pretty good," and the PUC rejected it, later approving a three-year deal, Popowsky said. The state's policy, he said, "is much too narrow and focused on short-term market prices, without recognizing that customers need to have stable, reasonable prices over time."

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