Progress argues against reforms

Progress argues against reforms
Laws would raise bills, utility says
By John Murawski - Staff Writer
Published: Sat, Feb. 28, 2009 12:00AM Modified Sat, Feb. 28, 2009 06:01AM

Progress Energy officials worry that the Democratic sweep in last November's elections is
ushering in a new era of radical energy reforms that will impose a steep financial price for power
companies.

Lobbyists for the Raleigh-based electric utility are meeting with members of Congress to warn of
the steep costs that would ultimately be paid by customers through rate increases if the proposals
in Washington become law. Progress sells electricity to 3.1 million customers in the Carolinas and
Florida.

One proposal would penalize power companies for exceeding federal greenhouse gas limits when
generating electricity with coal-burning power plants. Another would levy penalties for failing to
increase reliance on clean energy resources, such as solar power and wind energy.

"Prices are going to rise for the next 20 years,"
CEO Bill Johnson told Wall Street analysts and
investors gathered at the New York Palace Hotel
on Friday.

Progress executive vice president John
McArthur warned that the company would not
likely be able to meet the proposed federal
clean energy mandates, which are stricter than
North Carolina's 2007 law. The result would be
fines that could raise the average residential bill
by a much as $6 a month.

Johnson talked to analysts and investors in New York.
McArthur said Progress is still trying to calculate
the cost of carbon dioxide legislation, but last
year the company projected that complying
with the emissions limits could add as much as
$20 to the typical monthly household bill.

Stephen Smith, executive director of the
Southern Alliance for Clean Energy, dismissed
the company's tone as alarmist. He didn't
attend the conference in New York but said the
big power companies underestimate the
potential of alternative energy.

"This is a familiar refrain: The wind doesn't
blow, the sun doesn't shine, and nothing grows
in the Southeast," Smith said. "Anything that
isn't building a nuclear plant or building a coal
plant is pie-in-the-sky to these guys."

Utility officials have been preparing for changes
for more than a year, but they're still grappling
with the speed and extent of new federal
legislation. Since Democrats gained control of
the White House and Congress, McArthur said,
there have been few restraints on the
environmental policies that Democrats favor.
President Barack Obama has made clean energy
the centerpiece of his legislative agenda.

A proposal by Rep. Ed Markey (D-Mass.) would
require that 25 percent of electricity sold by
power companies come from renewable
resources, a threshold that's twice as high as
North Carolina's law. But after recently
reviewing 112 project proposals from
alternative energy developers, Progress
concluded that such resources are scarce and
pricey.

"Those resources simply do not exist in our state today," McArthur said. "The current energy
proposals [in Congress] result in an energy tax with no environmental benefits and no reduction
in carbon dioxide."

The nuclear factor
The costs would be compounded by building multibillion-dollar nuclear plants, an expense that