News Release: Coalition Warns NC not to Repeat Southeast’s Mistakes

{posted on: May 14, 2012}

Contact: Chris Estes, NC Housing Coalition, 919-720-0977


Consumer Coalition, National Expert Warn North Carolina Not to Repeat Nuclear Financing Mistake that’s Devastating Southeast Ratepayers

Poll shows 86 percent of North Carolina voters reject pre-paying for risky power plants; groups launch campaign to block “Annual Rate Hikes” legislation

RALEIGH – Amid ongoing headlines about soaring costs at nuclear construction projects across the Southeast, a broad coalition of North Carolina public interest groups today announced a statewide campaign to prevent so-called “Annual Rate Hikes” legislation that has led to soaring electric rates in Florida, Georgia and South Carolina.  The Consumers Against Rate Hikes coalition released a new statewide poll showing strong bipartisan opposition to legislation that would shift financial risks for new power plants by Duke Energy and Progress Energy onto the backs of small businesses, seniors, and families.

The poll* of state residents showed that 86 percent oppose a law that would “make customers pay in advance through annual electricity rate increases to build nuclear reactors rather than have [Duke Energy and Progress Energy] take the financial risk.”  When asked about their own elected officials, 81 percent said they would be less likely to support them if they voted for the rate hike legislation.

Chris Estes, Executive Director of the NC Housing Coalition, said today, “We are urging lawmakers not to repeat the tragic mistake made by our southeastern neighbors. Doing so would harm our business climate and make the cost of housing unaffordable for low and moderate income residents, especially vulnerable populations like persons with disabilities and seniors on fixed incomes.”

Vermont Law School economist Mark Cooper, an expert on utility risk-shifting legislation, said during a press conference today, Given the disastrous economic consequences demonstrated by this type of legislation in other Southeast states, North Carolina should reject the Annual Rate Hike or ‘Super CWIP’ bill that Duke Energy and Progress Energy are planning to spring on the legislature.”

The acronym CWIP refers to a controversial measure, banned in most states, which allows utilities to charge customers for power plants while they are being built – even if the projects are cancelled.  In 2007 Duke and Progress pushed through the pre-payment provision in North Carolina, but later began complaining they can’t risk building new plants without the annual pass-through of rate hikes with minimal review by the Utilities Commission and the public.

In 2010 the two utilities, which are seeking a corporate merger, began lobbying legislative leaders to allow the annual rate hikes.  In response, consumer, social justice and energy watchdog groups formed Consumers Against Rate Hikes and mobilized to thwart the Annual Rate Hike bill.  It wasn’t introduced, in part as a result of the nuclear disaster at Fukushima, Japan.

Dr. Cooper, in a statement released today, addressed the key selling point by Duke and Progress for the rate hike legislation.  “Utilities ridiculously claim that CWIP will save consumers money.  Instead, it raises power bills year after year and robs ratepayers of the use of their money for years before a power plant even opens,” he said today.

The CWIP expert emphasized that in Florida, a public backlash has emerged as customers are suffering annual rate increases – due to CWIP – to pay for Progress Energy’s Levy nuclear plant. The plant’s estimated price has quadrupled even though it has no construction license and is at least 12 years from operating, if it is ever built at all.  And just last week, it was revealed that Southern Company’s nuclear project in Georgia faces a $900 million cost overrun only three months after receiving a construction license, and as customer rates are rising annually to fund the project.

Similar legislation in South Carolina has led to annual rate increases even as SCANA’s nuclear project suffers massive cost overruns and delays.

Although the North Carolina bill has not been introduced yet, the coalition says they are on guard because Duke and Progress energy corporations say that an Annual Rate Hike Bill is essential to their business model.  The groups say last year, the utilities’ strategy was to keep lobbying efforts quiet until they had lined up the votes to pass the bill, thus avoiding debate.

The North Carolina coalition includes groups that have helped fight off CWIP legislation in other states, including Iowa just this month.


* See a summary of the poll results.

Link to Cooper’s Statement.

Consumers Against Rate Hikes is a group of organizations representing consumer, social justice, and energy watchdog groups taking pre-emptive action against proposed annual rate hikes by Duke and Progress energy corporations.

Consumers Against Rate Hikes is supported by: