• Introduction
• Who pays for renewable energy?
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Who pays for renewable energy?

It is well documented that power generated from renewable resources costs more than power generated from traditional fuels such as coal, nuclear energy and natural gas. The costs of developing renewable energy will be passed on to consumers. Cooperatives supported the new REPS because the costs can be contained through regulatory measures by the North Carolina Utilities Commission for a more balanced approach with possible economic and environmental benefits to rural areas. Utilities will not be permitted to charge consumers more than a phased-in cost cap found in the authorizing legislation. [See table]

North Carolina utilities point out that the state cannot meet all of its future power needs with renewable resources and energy efficiency measures alone. To meet the demand of their consumer-members, North Carolina’s 27 electric cooperatives own electric power plants and purchase wholesale electric power from major power producers. As large purchasers of electricity, cooperatives also support the construction of new, efficient power plants that use traditional fuels.

“Most legislators recognized that we can’t meet future power needs of the state on wind, solar and hog waste alone,” said Nelle Hotchkiss, vice president of corporate relations for the North Carolina Association of Electric Cooperatives. “Senate Bill 3 was intended to stimulate renewable energy production in North Carolina and provide a more diverse energy portfolio for our citizens. The legislation also ensures that state policy does not shut out coal, nuclear or natural gas power plants that are built using the best available environmental and safety standards at the most reasonable cost. These elements are necessary to ensure a successful economic future for North Carolina.”

The new legislation also considers the cost of constructing new power plants to meet growing demand. The N.C. Utilities Commission will allow investor-owned utilities to pass along to ratepayers construction and financing costs while construction is in progress. Previously, costs could not be passed to consumers until a plant was operational. As a result, the change will lower overall financing costs for power plants, and these savings will benefit consumers. The new law also will reduce consumers’ “sticker shock” for a new power plant by distributing rate increases over a longer period of time.

In addition, all power plants built in the state provide an economic boost to the communities that host them.

“Power generation is just one of many issues that we face,” Hotchkiss said. “We also must expand and improve our infrastructure, such as poles, wires and substations. Without a solid infrastructure, all the power in the world won’t make it to the consumer at the end of the line.”

Andrew Meehan is the government affairs manager for the North Carolina Association of Electric Cooperatives.