Green power to cost jobs, jack up bills, critics say

For every policy, a study.

Advocates of clean electricity have been saying for years how much the state would gain economically if Progress Energy and Duke Energy were forced to shift from coal-burning power plants and nuclear power to solar, wind, biomass and energy conservation programs.

Now free-market advocates are making the opposite claim. Promoting renewable energy and energy efficiency will cost this state nearly 3,600 jobs and raise electricity rates by $1.8 billion, according to a study issued last week by the Beacon Hill Institute in Boston and with the John Locke Foundation in Raleigh.

"Many parties have voiced concerns that requiring a certain level of renewable energy generation would have too great an impact on electric rates, as renewable generation costs more than conventional generation," the report states. "By mandating the sale of renewable sources of electricity, the state is essentially compelling the sale and use of more expensive electricity at higher prices relative to conventional energy."

The report weighs the economic consequences of a 2007 state law requiring electric utilities to increase reliance on renewables and efficiency to at least 12.5 percent of all retail electricity sold by 2021.

Costs will rise for several reasons. Utilities are already introducing efficiency programs, in which they pay homeowners and businesses financial incentives to tune-up air conditioners or to buy energy-efficiency appliances and high-efficiency equipment.

The report says that renewables will not only cost more than conventional power plants, but also says that power companies will have to buy some of their renewable credits from out-of-state, without buying any electricity.

For example, Progress Energy, Duke Energy and municipal power agencies are already buying renewable credits from Texas wind farms, which counts toward meeting this state's renewable mandates. The green credit purchases from Texas don't include any electricity, so Progress and Duke end up sending money to Texas for the credits and spend here to generate electricity.

The big question remains if renewables cost more than conventional power plants, and if so, how much. According to efficiency advocates, alternatives can cut costs by reducing the need to build new power plants.

What's more, Progress officials have said recently that the cost of generating electricity from coal will be unknown until Congress passes its global warming bill that will include limits on carbon dioxide emissions.

A February study by Lazard, the Wall Street research firm, said that coal-burning and natural gas power plants can be comparable in cost to wind energy and biomass, such as wood scraps and methane gas from landfills. Nuclear power is more expensive than all those options, according to Lazard.

Solar energy can cost twice as much as the renewables, coal and natural gas.

But the costliest of all are natural gas peaking plants, which sit idle most of the year and are fired up only on the hottest or coldest days, when energy demand spikes.