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RALEIGH — Could Duke Power customers end up paying for power they don’t use by making their homes and businesses more energy efficient?

What may seem like a crazy question is how consumer and environment advocates are summing up Duke Energy’s Save-A-Watt program.

The proposal was first filed in 2007 and is the subject of voluminous filings to the Public Utilities Commission, North Carolina’s utility regulator.

Commission members began hearings Monday on what the company characterizes as a way to make it profitable to get into the energy conservation business.

Testifying before the commission, Duke Energy Carolinas President Ellen Ruff said the plan treated conservation measures as a “fifth fuel,” describing it as an untapped reserve that can help the state meet its growing power needs.

Under the program, “we have an opportunity but not a guarantee of recovering our program costs,” Ruff said.

The calculations are complex and some of the evidence offered in the case is sealed from public view. But in simplest terms, Duke would recoup the cost of programs that help consumers save energy by recouping 90 percent of what it would cost to build a power plant to meet the energy needs offset by the conservation effort.

“We will only be paid based on how successful we are in terms of how many kilowatts we save,” Ruff told the commission.

But using that kind of calculation would let Duke reap big revenues while providing only modest power savings, say consumer advocates and environmental groups.

“It costs way too much and it does way too little,” said Shana Becker, a staff attorney for the North Carolina Public Interest Research Group.

During a news conference held before Monday’s hearing, Becker and other advocates argued that the Public Utilities Commission should reject Duke’s proposal. Their position is backed by the commission’s public staff, a group of state employees whose job it is to advocate for rate-payers and the public at large.

In one oft-cited analysis, the public staff wrote in a briefing to the commission that consumers could end up paying more than $18 for a compact fluorescent bulb available for less than $2 at many stores — once costs associated with the program are factored in.

“Regular rate payers can’t look at the program and figure out what the heck they’re paying for and what the heck they’re getting; the model is very confusing,” Becker said.

All Duke’s residential customers would pay toward the program. Duke would give price breaks to those who take energy-saving steps.

That aspect has prompted some consumer groups to complain the benefits would go to higher-income consumers who could afford the costs associated with those extra steps, beyond the weatherization efforts that have become common.

Testimony in the case is expected to take place all this week and part of next. Then, there’s a two-week break and a final few days of testimony already scheduled for mid-August.

The case puts consumer advocates and environmentalists in the curious position of opposing an energy efficiency initiative put forth by one of the state’s two largest power providers.

“I want to be real clear: The people on this side of the table aren’t opposed to energy efficiency,” said John Runkle, a lawyer for the environmental group NC WARN and one of at least a half-dozen lawyers representing interests opposed to Duke’s proposal at Monday’s hearing.

Rather it is Duke’s version of an energy efficiency program they oppose, Runkle said.

Of course, there seems to be some division among the advocates themselves. Some say Duke should be ordered to redraw its program so that it offers lower costs and bigger savings.

Others suggest that the Public Utilities Commission should create or help create a private nonprofit that would focus on energy-saving steps.

But those testifying on behalf of Duke say their program is integral to the company’s future.

Duke Energy CEO Jim Rogers is expected to testify in person later this month. In written testimony on file with the commission, he noted that under traditional regulation schemes, energy conservation would simply be lost revenue for a power company.

“In contrast,” he wrote, “I believe our save-a-watt approach can attract the necessary capital and ingenuity to place us on a path toward a more sustainable and secure energy future.”

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com