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N.C. Agency Recommends Raising Rates to Subsidize Conservation

Believing that raising rates will cut energy use, North Carolina’s consumer advocacy agency on utility rate cases has recommended that the state study raising electricity rates to create a fund that would promote efficiency and conservation and possibly pay customers rebates for insulating their homes and taking other energy-saving measures. Part of the increase would be used to compensate the utilities for lost revenue.

The hope is that such a move will keep utilities from building new power plants, The News & Observer reports (via The Power Report). Duke Power is planning to build two coal-fired plants in North Carolina, plus a nuclear plant in South Carolina. Progress will apply for a federal license to build a new nuclear reactor at the Shearon Harris plant in southwestern Wake County.

One purpose of the study would be to see whether the large industrial customers could be exempted from paying the rate increases. Groups that represent large industrial customers are opposed to any fee increases that would subsidize private individuals or businesses to improve their homes or offices.

Utility executives are lukewarm about such programs. They say they have voluntary conservation and efficiency programs in place, but paying people to modify behavior is risky.

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