Wednesday, September 06, 2006

Tax Us To Teach Us

N.C. consumer agency recommends rate hike for conservation

RALEIGH, N.C. — The agency that represents North Carolina utility consumers is supporting an increase in electricity prices to pay for energy efficiency and conservation programs.

The Public Staff of the North Carolina Utilities Commission recommended that the state consider using the proceeds of a rate hike to create a public benefit fund. The fund would promote efficiency and conservation or even pay rebates for energy-saving measures such as added insulation in homes.

The idea emerged from a workshop last week that included the Public Staff, the state's utilities, trade groups and environmental organizations. Industry groups remain wary that such programs can be wasteful if not closely monitored.

Public Staff executive director Robert Gruber acknowledged that a conservation program could end up paying people to waste energy, if done the wrong way.

"What if I give you $200 to go to Sears and buy yourself an energy-efficient refrigerator, and you put the new refrigerator in the kitchen and move the old refrigerator out to the garage to stock it with soda and beer for the weekend?" Gruber said. "What you want to do is what they call 'market transforming' things — like building codes — because that has a long-term effect."

At least two dozen states have programs that finance energy saving programs through added charges to customers.

A study would help show precisely how much such a program would cost in North Carolina. Monthly charges in other states usually amount to a few dollars or even less than a dollar, Gruber said.

Part of the increase would be used to compensate the utilities for lost revenue.

State officials are taking a close look at options for producing electricity as North Carolina's two biggest power producers make plans for new, multibillion-dollar power generators.

About 95 percent of the electricity generated by Progress Energy and Duke Power now comes from coal-fired and nuclear power plants.

Duke Power plans to build two coal-fired plants in Rutherford and Cleveland counties, and a nuclear plant in South Carolina. Progress plans to apply for a federal license to build a new nuclear reactor at the Shearon Harris plant in Wake County.

Cutting electricity consumption would alleviate the need for new power plants.

The state utilities commission already has ordered a separate study that would analyze the costs and benefits of requiring utilities in North Carolina to get part of their power from renewable resources, such as solar, wind, water or biomass. Such a program would also have to be financed by a public utility fund.

"Anything that can reduce the need for new plants can help the consumer and help the environment in the long run," Gruber said.

But large industrial customers oppose fee increases that would subsidize improvements in homes or offices. The newly recommended study would investigate whether those large customers could be exempted from the rate increases, Gruber said.

I don't think so. A few people may learn to conserve but not enough in my opinion to support increasing taxes rates.

posted by David at 11:33 PM :: Permalink ::