No. Carolina Senate passes renewable energy bill
By Jim Brumm
WILMINGTON, North Carolina, July 3 (Reuters) - The North Carolina Senate on Tuesday approved legislation that sets minimum standards for renewable energy and removes a two-decade-old restriction on utility financing while cutting some taxes.
The bill would cut taxes by about $220 million a year within five years.
Hammered out in Senate-organized talks that ended a week ago, the bill that cleared the Senate on a 45-3 vote was expected to face opposition in the House, where competing legislation limited to renewable energy standards is pending.
The House bill is sponsored by Rep. Pricey Harrison, a Democrat from the Greensboro metropolitan area, who opposed the inclusion of tax cuts and regulatory changes in the proposal.
Despite its popularity in the Senate, the legislation will face "more opposition in the House," she told Reuters, stopping short of predicting its defeat.
In addition to setting minimum renewable energy standards for city-owned and co-op electric utilities, and subsidiaries of Duke Energy Corp. (DUK.N), and Progress Energy Inc. (PGN.N), the Senate bill includes provisions broadening the electric utilities' fuel adjustment clause.
The financing changes remove restrictions that prevented the utilities from covering plant construction costs through rates, except when they were in financial trouble.
The legislation would phase out the state sales tax on energy -- electricity, natural gas and fuel -- now paid by manufacturers and farmers, over a five-year period.
This is expected to reduce state revenues by $19 million in fiscal 2008, which began Sunday, and about $220 million in the fifth year of the phase-out.
The Senate legislation would also phase in renewable energy and energy efficiency standards, obliging each utility to get 3 percent of its electricity from renewable sources or by reducing demand by 2012.
The proportion increases to 10 percent in 2018 for electric co-ops and city-owned utilities, which are not regulated by the Utilities Commission. For Duke and Progress, the proportion increases to 12.5 percent in 2021.
