Jun 24 - The News & Observer

North Carolina took a radical step a year ago, requiring that as much as 12.5 percent of electricity in the state come from solar power, other alternative sources and conservation programs.

Hailed as a victory for environmentalists, it was the first such requirement in the Southeast. It seemed so daring that Progress Energy officials warned that the energy conservation goal might be unrealistically high. Gov. Mike Easley expressed doubt that it was achievable.

But a year seems like an eon ago.

Now, instead of celebrating their coup, environmental advocates say electric utilities got off easy. Some say nearly a third of the state's power could come from conservation programs. For proof, they point to conservation programs in other states, as well as utilities' research in this state.

Energy conservation is increasingly promoted as an alternative to building new power plants, but in this state efficiency advocates are in a race against the clock to tap conservation methods.

Progress Energy and Duke Energy are proposing six new nuclear reactors in the Carolinas and Florida. Duke this year began construction on its Cliffside coal-burning power plant west of Charlotte.

If big power plants are built, they could satisfy the state's electricity needs for the next half-century: That would wipe out any urgency to try other options, advocates fear. The rationale for building power plants is based on utilities' forecasts, which show unabated population growth.

With new power plants on the horizon, utilities' power-demand forecasts have taken on urgent significance and will be scrutinized at a July 1 public hearing before the state Utilities Commission in Raleigh.

N.C. Waste Awareness and Reduction Network, a Durham group, contends that the utility forecasts are flawed, because they underestimate the potential of conservation programs.

If state regulators agree, the utilities could be required to revise their forecasts, undermining the case for new power plants.

"That's the core of the whole thing," NC WARN's director, Jim Warren, said. "We can move ahead without power plants and keep power bills down and cut greenhouse gases."

Utility growth projections in this state are rarely questioned and typically are accepted as scientifically valid, though the power companies in past years have overestimated statewide energy demand by as much as 8.5 percent, according to filings with the Utilities Commission.

For decades, the state's appetite for cheap electricity has grown unchecked. New residents have favored spacious homes that suck up power to run PCs, entertainment centers and plasma-screen televisions. A typical North Carolina resident burns through more electricity each year than a power customer uses in most other states.

Efficiency advocates are convinced that if Progress Energy and Duke Energy paid customers generously to conserve, statewide electricity use would stay flat, even with North Carolina's relentless population growth.

State doubts critics

The math tells a different story, said Robert Gruber, director of the Public Staff, the state's consumer advocacy agency. A utility company can expect to reduce power demand by only about 1 percent a year, he said.

That may be enough to flatten power demand in some states, but not in a state like North Carolina that is growing at a rapid clip and adding 100,000 electricity customer accounts a year.

Complicating the picture are North Carolina's electricity rates, among the cheapest in the nation. The cheaper the cost of power, the less likely that people will pay extra for high-efficiency appliances and other energy-saving upgrades, regardless of the financial incentives utilities offer.

"We have to look at what's a reasonable step to take," said James McLawhorn, director of the Public Staff's electric division. "If you try to [persuade] ... the customers to do it, the payback's not there."

Progress Energy is forecasting a 1.8 percent annual growth rate, but the Raleigh utility is planning to slow the electricity demand to 1.1 percent a year through conservation programs, according to filings with the Utilities Commission.

Progress is adding 25,000 customer accounts a year; Duke Energy, about 50,000. Progress has grown from 660,000 customers in the Carolinas in 1975 to 1.4 million today. And homes fed by Progress use 50 percent more electricity than three decades ago.

Beware, utilities say

Utility officials warn that ruling out new power plants would wreak havoc on state electricity supply, as has happened in California and the Northeast.

"To imply that we can meet all that growth with energy efficiency alone is irresponsible and just plain wrong," Progress spokes-man Mike Hughes said. "Our company expects to add more than a half-million households and businesses by 2030, and this state will add nearly 4 million people during that same time."

NC WARN cites a 2007 engineering study prepared for Duke that suggests the potential for the Charlotte utility to offset 19 percent of its electricity demand. The study suggests conservation options that give customers financial incentives to upgrade to more-efficient appliances and windows, solar water heaters, geothermal heat pumps and other measures.

Adopting the measures would take about two decades, at an estimated cost of 6 cents per kilowatt hour, about half the cost of building a nuclear plant, according to some estimates. Customers would pay either way -- to finance the construction of new power plants or for conservation incentives -- through their monthly utility bills.

But Duke spokeswoman Paige Sheehan characterized the list as potential efficiency programs, not a guarantee that utility customers would take advantage of the programs if they were available. Rather than 19 percent, Duke is proposing to offset electricity demand by 1.6 percent over the next five years through conservation programs.

"This is too important to distort and misrepresent," she said. "It takes time to get people to embrace and change their habits."

john.murawski@newsobserver.com or (919) 829-8932

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