Transformer: power players discuss how changes in the energy industry generate business.

• Position: ENERGY ROUND TABLE - Interview

Energy's economic impact on North Carolina has become a major issue as utilities try to develop cheaper, cleaner ways to generate and distribute power and companies energy to tap nontraditional sources such as the wind and sun. Discussing those and other trends were George Baldwin, managing director of legislative and community affairs for Charlotte-based Piedmont Natural Gas Co.; Tim W. Holder, vice president of sales and economic development for Statesville-based Energy United Electric Membership Corp.; Phil Mintz, manager of continuous improvement services for N.C. State University's Industrial Extension Service; Ewan Pritchard, program manager for the Advanced Transportation Energy Center at the Future Renewable Electric Energy Delivery and Management (FREEDM) Systems Center at N.C. State; and Larry Shirley, N.C. Department of Commerce director for development of the green economy. BUSINESS NORTH CAROLINA Publisher Ben Kinney moderated the round table, held on N.C. State's Centennial Campus in Raleigh and sponsored by Industrial Extension Service, Energy United and Piedmont Natural Gas. Following is a transcript, edited for brevity and clarity.

What is the state of the energy industry in North Carolina?

Shirley: 2010 is going to be a banner year for energy efficiency. It is imperative that we undertake a strong energy-efficiency program so that we don't have to construct as many expensive plants. A lot of our power plants are aging and going to have to be replaced. It's very important to stretch out our needs by having an efficient infrastructure. We also need to generate and use renewable energy resources. We've seen great growth in the solar area, and there will be an increase in wind energy as well.

Mintz: As a part of our extension and outreach mission, we are meeting with business owners and leaders to discuss their needs for top-line growth and bottom-line improvements--the role energy plays in the bottom line, how companies can improve on energy use, understanding new technology and methods. There are a lot of programs funded by the federal and state governments, but often times they need a connection. Businesses are ready to test the waters on utilizing new technology. We have just got to help push them forward with the incentive programs available.

Holder: The whole approach has to be balanced. If we push too hard, we end up staggering an economy that's already at the brink of an unsettled future. Obviously, there is an upside to renewable energy. But it has to come in a steady-growth method versus an influx, which is what we've seen in the last few years since the implementation of the Senate bill. Efficiency is the biggest opportunity out there. With the current state mandate, we're allowed to reach our goal through about 25% of energy-efficiency projects. So it's a huge push for us. The cost is obviously lower than putting together a solar project. The only reason solar works today is because there's a tax credit, but we still don't see a lot of people doing it. Prices have to go down. And in time they will. But in time, those federal and state incentives will disappear. So at the end of the day, I don't think you're going to get away from paying 14-plus cents a kilowatt hour for solar power. Until we see a dramatic change in the cost of our fossil fuels or nuclear energy, it's going to take some time to blend that into our mix of power.

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Baldwin: As a local distribution company, Piedmont Natural Gas takes gas from the Gulf Coast, West Virginia and Canada and moves it across the state to our customers. Supply is important to us, and the situation has changed dramatically the last three years. Prices have been volatile in the past because there is a tight relationship between supply and demand. Demand increased when the economy was doing well. Whenever the supply was down and demand remained the same, the price spiked. We were operating on a 40-year supply of gas. The discovery of shale gas and new drilling and extraction techniques have increased the 40 to 100 years. Prices are stable because supply has increased. Piedmont Natural Gas reduced its rates in the middle of the winter. That doesn't happen often.

But with the recession, demand certainly must have decreased.

Baldwin: Even though the economy is down, supply is the major reason prices are down. Even with residential and commercial demand off...