By Mark Binker
What happened to that renewable energy bill?
For those who heard a few months ago about an effort to promote alternatives such as solar water heaters and burning poultry litter for kilowatts, that might seem like a simple question.
It's not.
House and Senate versions of the bill were first drafted to encourage conservation and the use of renewable energy as a means of cutting down reliance on coal and nuclear plants. The Senate version of the bill appears headed for final approval.
It now contains provisions useful to companies that build new coal and nuclear plants — the very technologies renewable energy is supposed to supplant — in addition to providing incentives for conservation and alternative energy.
Whether that is a broad-minded approach to meeting the state's energy needs or a train wreck that caters to industry depends on who you ask.
"This bill deserves to be studied in political science classes as an example of hard political reality," said Rep. Grier Martin, a Wake County Democrat.
The measure began its transformation in late January as part of what legislators call "a stakeholder process." Energy companies, environmental advocates, legislators and members of government agencies gathered in a conference room of the legislative office building to rebuild the bill.
According to participants, this was done at the behest of Senate leaders — who wanted to handle several pending energy-related matters in one bill — and organized by legislative staff members. However, much of the drafting of the bill was done by lawyers who work for the utility company Progress Energy.
"That's exactly right, and that's troubling," said Rep. Pricey Harrison, a Greensboro Democrat and the chairwoman of the House Energy and Energy Efficiency Committee, which is vetting the bill.
Asked about their work on the bill, Progress Energy spokesman David McNeill said, "We have been involved in this collaborative effort for many months with a diverse group of constituents, including regulators, environmental groups, utilities, businesses and consumers."
A Duke Energy spokeswoman said her company supports the bill as drafted by the stakeholder group.
"The process of collaborating in advance and seeking consensus and delivering a comprehensive package to lawmakers actually helps speed the legislative process, and I hope informs the process in a very constructive way," said Paige Sheehan, with Duke.
It is worth noting that the political action committees for Progress Energy and Duke Power were two of the top 10 donors to North Carolina legislative campaigns during the 2006 election. No environmental or consumer advocate group broaches the top 25.
Several provisions were grafted onto the bill during the stakeholder process. The one that has prompted the most outcry from environmental and consumer groups would allow utilities to charge customers for the cost of financing new coal and nuclear plants before those plants come online.
"Giving utilities cheap money, cheap financing, on the backs of ratepayers doesn't guarantee customers will have lower rates in the end," said Shana Becker, a lawyer with the N.C. Public Interest Research Group. "To the contrary, it encourages the utilities to aggressively invest in plan construction."
Encouraging investment in coal and nuclear is at odds with the goals of encouraging energy conservation and using renewable energy, several environmental advocates said.
"That view is fundamentally dead wrong," said Sen. Dan Clodfelter, a Mecklenburg Democrat who other participants in the stakeholder group said arbitrated the major differences between parties.
"You can't draw a bright line and solve all your problems by just doing one thing like renewable energy," Clodfelter said. As the state grows from about 9 million residents today to about 12 million in 2030, multiple sources of energy must be tapped to meet demand.
The bill as it has been reconstructed and passed by the Senate was meant to address the state's total energy needs, he said. It was meant to square with political reality as well, Clodfelter said.
"I think if we were trying to run it a piece at a time, you'd see individual sections get defeated," he said.
The bill, for example, requires energy companies to get 12.5 percent of their power from renewable resources or conservation. Without changes that affected other areas of energy policy, energy companies might have fought that provision, several people familiar with the bill said.
On the flip side, at least two environmental groups are backing the bill despite concerns about the financing of new coal and nuclear plants.
"Environmental Defense thinks it is critical that North Carolina adopt a renewable and efficiency standard," said Michael Shore, a policy analyst for the group.
Although it was "uncomfortable" with the coal and nuclear sections, Shore said his group was willing to risk what it saw as potential problems in exchange for what he described as "more positive" pieces of the bill.
After nearly six months of tweaking by the stakeholders, the Senate passed the bill in less than a week with only one committee hearing.
It has since been more intensely scrutinized by Harrison's committee. Although she pointed to other stakeholder groups that had worked well — on clean water bills, for example — she called the vetting of this legislation "a flawed process.
"I appreciate the time and work our staff put into it. But it had no input from the House and it became a utility (company)-driven process," she said.
Harrison said she would rather pass a bill without the coal and nuclear financing provisions, but is under pressure to move the compromise legislation along.
She expects to make some changes to the bill before it's passed on to other committees and eventually debated on the House floor. She expects to add more stringent requirements that renewable energy companies that burn wood and animal waste don't emit more pollution than coal plants. And she said the coal and nuclear financing provision could be changed to add additional safeguards for consumers.
Others involved with the bill say that advocates on all sides have to take the good with the bad.
"Everyone wants to go back to their respective corners and fall back on their litmus test positions," Clodfelter said.
For her part, Harrison said she's learning on the fly after spending years first as an environmental advocate and then as a relatively new, self-described progressive member of the General Assembly.
This was her first time as a committee chairwoman managing major, controversial legislation about which she had strong opinions.
"I'm trying to learn the art of compromise," she said.
