The N&O ran a story today about NC WARN’s (Waste Awareness and Reduction Network) recent effort to raise the conservation mandate on Duke Energy well above what is required by the Renewable Energy and Energy Efficiency Portfolio Standard (REPS) that passed last year. That law requires utility companies to reduce energy production by 5 percent.

To avoid shortages of electricity, the utility companies offset this production quota by providing financial incentives to induce customers into making different choices about their energy use. These incentives can include subsidies for the purchase of relatively energy-efficient appliances and are funded through higher electricity rates.

However, NC WARN claims that the quota is not low enough - utilities should constrict energy production even more than the law requires. They are calling for Duke Energy to reduce its production of electricity by 19 percent. This, they claim, would eliminate the need for new power plants.

In fact, it is possible that NC WARN may get their wish. The Utilities Commission will soon hear testimony from NC WARN and decide whether, on the basis of their testimony, to deny Duke the ability to build new power plants.

Requiring Duke to reduce production by 19 percent would obviously create a much larger shortage than a 5 percent reduction. It would likely strain Duke’s resources to be able to offset this shortage with “energy efficiency programs.” In fact, that is exactly what Duke is saying.

NC WARN points to California’s 33 percent REPS as an example of what can be done in North Carolina. However, utility officials have rightfully pointed out that “ruling out new power plants would wreak havoc on state electricity supply, as has happened in California and the Northeast.” This, of course, would be the point of lowering the production quota - to wreak havoc on supply, creating an artificial shortage.

In an industry subject to market forces, the inevitable result of a shortage would be an increase in the price. Since prices in the electric power industry are set by a central authority, however, they would not be allowed to adjust with the declining supply of electricity. In spite of this, there should be no assumption that “conservation” advocates want to ensure that customers have access to cheap energy. They view access to cheap energy as a fundamental problem. The following quote is taken from today’s N&O article:

For decades, the state’s appetite for cheap electricity has grown unchecked. New residents have favored spacious homes that suck up power to run PCs, entertainment centers and plasma-screen televisions. A typical North Carolina resident burns through more electricity each year than a power customer uses in most other states.

Efficiency advocates are convinced that if Progress Energy and Duke Energy paid customers generously to conserve, statewide electricity use would stay flat, even with North Carolina’s relentless population growth.

The point of placing a quota on energy production would presumably be to control the choices that North Carolinians make about how they live. In this paradigm, cheap energy is viewed as the root of all evil because it allows people to “run PCs, entertainment centers, and plasma-screen televisions (which, coincidentally, use less energy than projection televisions).” In other words, the cost of energy should be so prohibitive that North Carolinians are forced into lower standards of living. The article continues:

Complicating the picture are North Carolina’s electricity rates, among the cheapest in the nation. The cheaper the cost of power, the less likely that people will pay extra for high-efficiency appliances and other energy-saving upgrades, regardless of the financial incentives utilities offer.

When “conservation” is discussed as an energy policy, it should be clear what is being considered. “Conservation” means artificial shortages, energy rationing, lower standards of living, a shrinking economy, and higher unemployment. It also means a loss of individual freedom, with North Carolinians ceding their decision-making abilities to a central authority.

To make matters worse, there is no clear reason for why energy production should be restricted to begin with. Duke Energy is trying to build a clean, reliable nuclear power plant that will produce zero emissions. Yet, “conservationists” want the project stopped. They intend to create an artificial energy shortage that cannot even claim to have any environmental benefit. Clearly, “conservation” should never be considered a viable energy policy in North Carolina. North Carolina should instead pursue access to abundant supplies of reliable and affordable energy sources.

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