The Locker Room

Re: What about SB3?

Posted by Daren Bakst at 2:06 PM

The article on SB 3 is pretty amusing given that it is "identifying" problems that JLF pointed out months ago.  Note: In this post, I have added words in brackets when necessary for clarification (this is in addition to any words in brackets that already may have existed in a quote).  From the article:

"The law also allows the power companies to raise customers’ electric rates in order to pay for the cost of these programs [energy efficiency programs]. The amount of money that the companies can recoup depends on how much energy is saved as a direct result of the companies’ efforts.

But measuring what is essentially the “non-use” of energy is difficult, and so is determining the source of that energy savings."

From a July Spotlight:

"It is dubious to assume that a 5 percent reduction in energy use would be a result of paying higher taxes for incentive programs. In fact, La Capra [the Utilities Commission's own consultant] recognizes that there is 'a problem in attributing the correct amount of energy savings from EE [energy efficiency] measures that are part of an RPS [renewable portfolio standard] versus what would have otherwise resulted without any incentives.'"

The public, including the poor, will have to pay for ads and whatever else it takes to run these energy efficiency programs.

The article doesn't give the full picture of what the utility companies will get reimbursed for--they won't just get reimbursed for the costs of some ads or providing incentives.  They also will get reimbursed for any lost demand for electricity.  As I discussed in this past post:

"Due to SB 3, utilities now can recover for lost demand as a result of energy efficiency measures.

The likely means of recovery will be through a % of what are called avoided costs (basically what the costs of plants would be if utilities had to build them).  Duke Power, for their Save-A-Watt program, is seeking 90% of avoided costs.  This means that on top of the incentives and administration costs for energy efficiency programs, customers would have to pay 90% of what plants would have cost.  SB 3 is critical for Duke's Save-A-Watt program because there was concern whether existing law allowed utilities to recover in this type of manner.  

NC WARN, an environmental group opposed to SB 3, wrote in a letter to Speaker Hackney, 'Adding the actual costs and avoided costs authorized by Senate Bill 3, customers could pay MORE for not using electricity than for using it.'"

if that isn't bad enough, as discussed in this Spotlight, SB 3 will require North Carolinians to pay the electricity bill for people outside the state--most likely Texans and Californians.    

SB 3 was a big government, anti-consumer, anti-poor, pro-tax bill--that's why organizations from across the ideological spectrum opposed it.  However, it was good for some powerful special interests--that's why legislators from both parties supported it.

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