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Energy bill would make public pay

RALEIGH - It's hard to run a business when nobody wants to buy what you're selling. Some businesses have found a way around this obstacle: Get the government on your side. This is the reality in the renewable energy industry, where excessively high prices keep the industry from being competitive. North Carolina has a voluntary program, called NC GreenPower, which allows the public to voluntarily support renewable energy. The participation rate has been dismal. Renewable energy sold through the program accounts for only about .01 percent of all electricity sold in the state. The state Senate passed Senate Bill 3 since North Carolinians won't voluntarily support renewable energy. Apparently, the state Senate thinks people must be forced to support renewable energy against their will.

RALEIGH - It's hard to run a business when nobody wants to buy what you're selling. Some businesses have found a way around this obstacle: Get the government on your side.

This is the reality in the renewable energy industry, where excessively high prices keep the industry from being competitive. North Carolina has a voluntary program, called NC GreenPower, which allows the public to voluntarily support renewable energy. The participation rate has been dismal. Renewable energy sold through the program accounts for only about .01 percent of all electricity sold in the state.

The state Senate passed Senate Bill 3 since North Carolinians won't voluntarily support renewable energy. Apparently, the state Senate thinks people must be forced to support renewable energy against their will.

The state House is considering the legislation. The bill would create what is called a 12.5 percent renewable energy and energy efficiency portfolio standard. The REPS has two distinct requirements that have been combined to give the false impression that one can't exist without the other.

Portfolio standards
First, there is a renewable portfolio standard that requires utilities to provide 7.5 percent of their electricity through... more [truncated due to possible copyright]  

RALEIGH - It's hard to run a business when nobody wants to buy what you're selling. Some businesses have found a way around this obstacle: Get the government on your side.

This is the reality in the renewable energy industry, where excessively high prices keep the industry from being competitive. North Carolina has a voluntary program, called NC GreenPower, which allows the public to voluntarily support renewable energy. The participation rate has been dismal. Renewable energy sold through the program accounts for only about .01 percent of all electricity sold in the state.

The state Senate passed Senate Bill 3 since North Carolinians won't voluntarily support renewable energy. Apparently, the state Senate thinks people must be forced to support renewable energy against their will.

The state House is considering the legislation. The bill would create what is called a 12.5 percent renewable energy and energy efficiency portfolio standard. The REPS has two distinct requirements that have been combined to give the false impression that one can't exist without the other.

Portfolio standards
First, there is a renewable portfolio standard that requires utilities to provide 7.5 percent of their electricity through renewable sources, such as solar and wind power. Second, utilities would need to achieve a 5 percent reduction in energy use through energy efficiency measures.

The renewable portfolio standard ensures that the renewable energy industry has a market for its services, even thought it comes at the expense of the public. According to the North Carolina Utilities Commission's own consultant, La Capra Associates, the renewable requirement would cost about $310 million annually. Those costs would be passed on to customers.

The energy efficiency requirement presumes that electricity customers aren't capable of making their own decisions. Utilities would charge all customers extra and then, if some customers do the "right thing," they could recover some of their money in the form of incentives. The "right thing" would be buying energy-efficient products, such as refrigerators, stoves and other appliances.

There's nothing wrong with energy efficiency, but there's something wrong with the government acting as a nanny with a dictator complex. Individuals already buy energy-efficient products. Businesses take steps to improve energy efficiency because it helps to increase profit. As a result, energy efficiency measures and their costs are unnecessary.

Customers would incur costs to compensate utilities for the incentives and administrative expenses that are part of energy efficiency programs. In addition, utilities almost certainly would be allowed to charge higher electricity rates to recover any lost revenue as a result of a reduction in the demand for electricity.

New ‘taxes'
The extra costs of the REPS would amount to new taxes. They are mandated costs that are in addition to the necessary costs to receive electricity. These taxes would be buried in electricity rates and wouldn't be listed as separate line items on electricity bills. This is just one more insult to customers, courtesy of the Senate.

Electricity customers aren't the only victims of this bill. Mountain and coastal communities should be concerned about this legislation, unless they like the idea of massive wind turbines lining their landscape. To achieve a 7.5 percent renewable portfolio standard, at least hundreds of wind turbines, as tall as 400 feet or the size of 40-story skyscrapers, would be required on the coast, and either in the mountains or offshore.

There also are winners of this bill. The Senate legislation started out as just a REPS bill. There was a small chance that the bill would be passed. So tons of "goodies" were added to the bill. Of course, none of the "goodies" are beneficial to customers.

For example, a significant amount of risk for new power plant construction has shifted from utilities to customers. In the first five years of the bill, there are $224 million worth of tax cuts to benefit special interests, such as manufacturers and developers. These tax cuts may make sense individually, but not as a way to make a bad bill palatable.

Senate Bill 3 demonstrates that it's business as usual in the legislature. Special interests, such as utilities and manufacturers, got what they wanted, and the public gets to pay the price.

Daren Bakst, a lawyer, is legal and regulatory policy analyst for the John Locke Foundation in Raleigh.



Source: http://www.fayobserver.com/...

JUL 13 2007
https://www.windaction.org/posts/9997-energy-bill-would-make-public-pay
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