Duke Energy and the University of North Carolina at Chapel Hill have a contract under which the utility would build a mini-wind farm and the university would study it.

A recent UNC study suggested a test wind energy farm in Pamlico Sound, Lynn Bonner reports.

The contract allows several ways for the company to get out of building the windmills, including if the project's cost exceeds $35 million. The university and the company can mutually agree to end the contract if opposition to the project is too intense.

The university will be able to study topics such as hurricane resistance and turbine-animal interactions.

A provision in the state budget allows the company to recoup its windmill costs by charging customers.

Duke Energy is offering to pay for the wind turbines planned as part of the alternative-energy demonstration project in Pamlico Sound, but the state will let the company make the money back by passing along the cost to customers.

The state and the University of North Carolina are working on a contract that would have Duke Energy build up to 3 windmills, at a cost of about $12 million each, while allowing the university to study the operation, Lynn Bonner reports.

The budget bill sets out $300,000 in federal stimulus money for the study, and says the contract must be finished by Oct. 1.

The budget bill says the state Utilities Commission must establish an annual rider for the company to recover its costs when the company applies for it.

When it comes to renewable energy, the winds of change are meeting some resistance.

Senate Democrats are trying to blow past disagreements about whether they should allow for the development of wind energy facilities in the state's mountains.

A committee approved a version of a bill Tuesday that would create a permitting process for the construction of wind turbines. While the original bill applied to the entire state, the committee's substitute version would only allow for construction of turbines in coastal areas.

Mountain senators objected to the original bill and are trying to work with its sponsor to modify the wording.

"We are still working with our mountain folks to figure out the language that would be appropriate," said Sen. Charles Albertson, the bill's sponsor.

Leaders are hoping the problems blow over, and that a compromise is reached before the finance committee considers the bill.

The federal government has cleared the way for wind farms off North Carolina's coast.

Regulations published Wednesday afternoon in the Federal Register and touted by President Obama at an Earth Day speech lay out the rules for leasin, siting, permitting and building wind turbines and other forms of renewable energy.

Dozens of applications for proposed offshore wind projects are expected in the north and central Atlantic in the coming months, said Interior Secretary Ken Salazar.

A report from his department says the Outer Banks have some of the strongest and steadiest winds on the East Coast.

"We realize there's a tremendous opportunity offshore," said Bob Leker, a program manager with the State Energy Office in Raleigh. "I think it's a good idea. It's a resource the country as a whole has a lot of." (N&O)

Senate Leader Marc Basnight said he and House Speaker Joe Hackney will appoint a commission to study the potential benefits and risks of drilling for oil off the coast of North Carolina.

The legislature has no power to stop the federal government from authorizing offshore exploration, and federal officials have asked for public comment on drilling off the coast of Virginia.

Basnight, a Manteo Democrat, said he strongly opposes drilling, because he said it would provide a relative pittance of oil while risking damaging or destroying the costal ecosystem and economy.

"If the study were to come back and say we have this incredible find and it is larger than anything man has seen, I'd have to look at that," Basnight said.

Basnight said the study would cost as much as $100,000 and take a year or more. The commission would include lawmakers and experts from the state's universities who would study how much oil is off the coast and what would happen if oil companies began drilling for it. Meanwhile, the state has already funded a study at UNC-Chapel Hill to investigate producing wind-powered energy off the coast. Basnight said the two studies may help convince people that drilling — a popular idea for some during national and local elections — may not be the best course of action.

Pat McCrory, the Charlotte Mayor who ran as a Republican for governor, supported drilling and the jobs he said it would create. Gov.-elect Beverly Perdue, a Democrat, said she would favor a study of the issue.

State Republican Party chairwoman Linda Daves said the study would be a waste of money.

"If Marc Basnight and Democrats in Raleigh intend to commission a $100,000 study with the results they want already in mind, then don't bother. Take the money and refund it to taxpayers so they can pay their home heating bills this winter, but stop wasting our money on meaningless studies with predetermined outcomes," Daves said in a news release. "Here is a novel concept for the Democrat leadership in Raleigh: Listen to the people! The people of North Carolina overwhelmingly support offshore drilling as one means among many to modernize our energy economy and move us toward a stronger, more secure future."

Basnight told reporters that he doesn't want the study to help support his point of view, but to gather facts on what drilling would and would not do.  

In the late 1980s, Mobile and Chevron began pursuing drilling off the coast. What enthusiasm there was for the effort dissipated when it became clear that the state would not see any royalties from the oil, Basnight said.

Update: Post includes comment from Republican Party head. 

Wind power is not blowing hard in North Carolina.

Though nine offshore wind projects are proposed along the coasts of Atlantic states, none are currently planned here, despite a law passed a year ago requiring utilities to meet 12.5 percent of energy demand by 2021 with clean energy.

Bob Leker, renewables program manager for the State Energy Office, says North Carolina has a significant untapped source of wind power.

"The U.S. Department of Energy is very interested in North Carolina," he said in remarks Wednesday to the N.C. Coastal Resources Advisory Council. "We have a significant resource by virtue of the miles of coastline and relatively shallow sound."

One small, land-based commercial wind project is proposed in Carteret County. Raleigh entrepeneurs Nelson and Dianna Paul have proposed three wind turbines that would generate 4.5 megawatts of eletricity, enough to power about 900 homes. (N&O)