North Carolina's renewable-energy law is bringing much needed revenue to wind-farm operators while it also creates jobs in a highly promising new energy field. Unfortunately, most of these benefits are flowing to Texas and the Dakotas.
Utilities in the state have been buying what are known as "green certificates" from wind farms that stretch through middle America's wind belt. The certificates are a form of subsidy that allows these wind farms to pay their bills and, one day, make a profit even though they do not produce electricity as cheaply as do power plants.
To date, Duke Energy, Progress Energy and 19 municipal power agencies have bought the certificates as a way of meeting a North Carolina green-energy mandate that goes into effect in 2012, according to McClatchy Newspapers. The utilities aren't buying any electricity from these producers, just the certificates.
This may sound silly, but there is method to this seeming madness. By buying the certificates, the state's utilities are contributing to cleaner energy for the nation. They are also helping build what is now a very fast-growing alternative-energy industry. As that industry grows, technology will improve and production costs will fall. All of that should help North Carolinians in the future. And that is why the General Assembly, when it passed the mandate, allowed the state's utilities to meet 25 percent of their renewable-energy obligation through the purchase of these certificates.
For North Carolina to fully benefit from the renewable-energy law, however, the utilities must increase the power they buy from in-state generators. That will mean a reduction in future needs for coal-powered production of electricity and improved air quality. It will also support new businesses here, be they wind farms or some other form of fuel-burning power plant. And with those new businesses will come jobs for North Carolinians.
The wind-belt certificates are relatively inexpensive today, and North Carolina's utilities see them as a way of meeting the law's demands while also keeping their costs -- and thus their customers' costs -- down. But economics can't be the only impetus for turning to these out-of-state subsidies.
The General Assembly and local governments must develop workable policies about the location of alternative-energy generators, such as wind farms. The utilities can hardly be expected to get their power from local windmills if there is an insufficient number of them here.
The middle-America wind certificates meet a useful purpose today. But we hope it won't be long before our utilities are buying electricity from North Carolina renewable-energy producers.
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