After a relatively smooth ride through Senate committees, renewable energy legislation packed with perks for utilities hit turbulence last week in the House Energy and Energy Efficiency Committee. After hours of debate, SB 3 passed favorably and now moves to the Public Utilities Committee.
SB 3 contains controversial provisions for construction work in progress, known as CWIP or "baseload financing." State Rep. Susan Fisher (D-Buncombe) proposed an amendment to delete CWIP from the bill, instead establishing a study commission to analyze its financial implications. Her motion failed.
CWIP allows energy companies to ask the N.C. Utilities Commission to raise rates to pay for construction before it is complete. This makes the venture less financially risky for utilities and their shareholders, but foists construction costs on ratepayers without guarantees the plantsespecially nuclear facilitieswould be built.
State legislation severely limited CWIP in 1982, and currently it applies only to instances in which a utility's financial state is "dire." SB 3 would require only that utilities successfully argue it is "prudent."
"The questions that remain are too great," Fisher said. "I've heard from constituents that it is time to move forward with renewable energy. This portion of the bill moves us backward."
Rep. Pryor Gibson (D-Anson, Union) countered that eliminating CWIP "would destroy 18 months of work."
In 2006, renewable energy legislation, which didn't include CWIP, died in the session's final hours. CWIP opponents have argued that the provision couldn't pass as a standalone bill and has to be piggybacked on renewables legislation to succeed.
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