SAVE THE DATE for these Business & Education Advocacy Events Intra-Regional Visit Gaston County April 16, 2008 For details, contact Brian Francis at 704.378.1333 or bfrancis@charlottechamber.com Raleigh Legislative Summit May 20-21, 2008 For details, contact Murphy Sullivan at 704.378.1374 or msullivan@charlottechamber.com

To Be Continued ...  Duke Energy recently issued the first request for proposals in the Carolinas specifically designed for renewable energy providers. The company is now evaluating more than 90 bids to produce "green" power from sources including hydro, biomass, geothermal, solar and wind.

Meet Ellen Ruff Click here to learn more about Ellen Ruff, president of Duke Energy Carolinas, who was interviewed for this story.

Lots of people involved with business, or politics, or sports, or just everyday life, like to talk about "seeing the big picture." Indeed, the whole panorama. Where you've been, where you are, where you want to go. And yes, it's so much easier to talk about this than to realize it on a daily basis.

But that's just what Ellen Ruff and Duke Energy are trying to do. They approach the energy picture as if they were fitting together pieces of a puzzle, and that's just the imagery they've chosen in attempting to explain it.

"From my perspective, the whole piece is the most important," Ruff said in a recent interview. "The main issue here is planning for the future and being in the position to be able to offer our customers a solution that is reliable and as cost-effective as possible."

In each piece of the puzzle, Duke faces formidable challenges. These pieces include new generation, energy efficiency, renewable energy, customer rates, and state and regional energy policies.

 

New Generation

Duke Energy recognizes that sometimes the best option does not involve the least cost, Ruff stated, but it produces benefits to society and the environment.

So in addition to modernizing or building coal-fired plants, such as the one in Cliffside, the company is adding the ability to generate power with natural gas in Rockingham and Rowan counties. It also wants to build a nuclear plant near Gaffney in Cherokee County, S.C.

"The demand is growing," Ruff said. "You and I are using more power. Duke is adding 40,000 to 60,000 new accounts a year in the Carolinas. ... Growth and demand are playing a role in every one of our strategies."

 

Energy Efficiency

Duke would commit $50 million a year in the Carolinas on energy efficiency efforts if certain regulations are changed. There would be a cost to customers, but incentives would mean savings could exceed those costs, depending on the amount of energy saved.

"This is based on the idea that the best power plant is the one you don't have to build," Ruff said. "We get paid for the results, not for the investment, and it saves money on the bills. That's the key."

Under the "Save A Watt" program, residential customers, as well as small business and big business, would all benefit. "It's a very remarkable and innovative program," Ruff said. "It would compensate the company, but at a price less than building would cost. So it's a win-win for the company and its shareholders. ... Our portfolio would have a menu of programs in both states with a full range from small to large."

 

Renewable Energy

"More than 25 states now have renewable standards," Ruff said. "It's a matter of time before it comes here."

So Duke is investing in solar and wind power and supporting development of other renewable sources with research and development. But once again, the company says regulatory changes must take place. Renewable energy sources are expensive, and Duke can't pass on costs of any sort within the current framework.

Duke has supported the new Renewable and Energy Efficiency Portfolio Standard in North Carolina. It requires power companies to meet 12.5 percent of customers' needs through renewable power or conservation. But costs must be capped; otherwise, such pursuits are just not feasible. "We have to make sure we're extracting the value of the assets for our customers," Ruff said. "We surely have heard from them about the rising cost of protecting the environment."

 

Customer Rates

Duke Energy's rates in the Carolinas remain 25 to 30 percent below the national average, and the company just negotiated and implemented base rate decreases of 3 to 15 percent depending on the customer group.

For small businesses, that could mean savings of as much as 6.5 percent in 2008 and as much as 9 percent in 2009.

Looming large is an issue of "rate parity," which Ruff describes as "more of an art than a science." It involves rates that correlate more directly to the cost of serving that customer.

"You don't want to drive a Mazda and make a Cadillac payment," she added. "It's a fundamental issue of fairness."

With the decline of textiles, use by industrial customers has gone down, while residential use has continued to rise. But industrial customers still bear the brunt. An industrial customer with 300 megawatts on one line uses as much energy as a small city or neighborhood. But serving the industrial customer is still cheaper because less infrastructure is required. So when rates were adjusted, industrial and commercial customers got a bigger reduction.

"For companies like Parkdale Mills, this was hugely important," Ruff said. "It also sends a message to companies that might come here that the state is committed to a fair and reasonable energy policy."

 

Energy Policy

In the Carolinas, Duke Energy supported new energy laws that provide cost-recovery assurance for nuclear development costs and new generation construction costs. The company also wants laws that help recover expenses associated with the operation of pollution control equipment.

But Ruff insists this is not a one-way street. On the national level, Duke Energy supports mandatory, economy-wide regulation of greenhouse gas emissions. And it endorses a program that would promote the development of "carbon capture" technology and reward companies that take aggressive action to reduce their emissions.

"This stuff will bring solar and other providers, and these can all be small business," she said. "This would result in measurable job growth."

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Formerly the business editor of the Gaston Gazette, Thomas Monigan is now enjoying the sunny beaches of Florida as the business editor of the Northwest Florida Daily News in Fort Walton Beach, Fla.