John Murawski, News and Observer

North Carolina is set to require electric utilities to embrace energy alternatives to help meet the state's soaring power demand.

Gov. Mike Easley signed the new law Monday afternoon, making North Carolina the first state in the Southeast to require electric utilities to tap renewables and efficiency programs to help meet the state's growing energy demand. Progress Energy and Duke Energy will have to meet 12.5 percent of their retail electricity demand through renewables and efficiency by 2021.

The new policy could help some customers save as much as 15 percent on their electricity bill through conservation programs. Both Progress Energy and Duke Energy are developing conservation programs that could pay financial incentives to customers who invest in energy-efficient appliances, seal leaky air conditioner ducts and take other measures to save energy.

Less than 2 percent of the state's electricity comes from renewables and efficiency programs. The state's first benchmark is a 3 percent minimum by 2012, giving utilities five years to ramp up their efficiency programs and renewable producers to develop production facilities.

Customers will pay little extra to compensate utilities for lost revenue and and other costs associated with developing the conservation programs. For a residential customer, the new law caps the annual cost at $10 a year through 2011, at $12 through 2014 and at $34 a year thereafter.