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Conservation drives interest in nuclear energy

In this excerpt, Smith reflects on some of the responses to the increasing impulse to conserve fossil fuels, one of which was a boost to nuclear power's appeal. The push to conserve, which Smith sees as waning, also presented Americans and the energy industry with compelling energy alternatives that may eventually take root.

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JM: One last question on these environmental concerns and then we’ll move onto some broader business issues. [What is] your perspective on the effort to manage in the direction of conservation? I’m thinking back to the rhetoric of the Carter administration, certain types of arguments advanced about the nation’s energy future and how it would include a certain strategy of greater attention to conservation, for example. Many utilities began very aggressive, well-organized programs to try to achieve certain conservation gains, to limit the need to build new plants, and so forth. Can you take the broad view and explain how that effort has unfolded? SS: Yes. I think when the call for conservation first arose, it was following the OPEC oil embargo in 1973. I think there was a feeling, generally, that oil was scarce. Oil was going to be more expensive, and it was very important that we be very wise and efficient and frugal and conservative in our use of oil. I think that was sort of the keystone to the energy conservation programs. There were efforts made to expand [those programs]. Local initiatives and federal initiatives were trying to expand production of domestic oil and gas and reduce our consumption of it. The utilities participated. In fact, the utilities, at one time, were prohibited by federal law from burning natural gas. So, you had an effort that was part of the reason for the shift to nuclear power. If we conserved and didn’t waste energy, then we’d need fewer plants of any kind. The development could be: “Let’s conserve as much as possible. That will help us reduce our use of oil and shift to nuclear power. If we’re effective in our conservation, we won’t need as many nuclear plants or coal fired plants.” All of the utilities, ours included, were involved in various types of communications programs, public information programs. We learned as a--. END OF TAPE 1, SIDE A START OF TAPE 1, SIDE B JM: This is side B of the first cassette with Mr. Sherwood Smith. SS: We learned as a nation that raising prices did result in, of course, a cutback in usage. We learned in the electric utility industry that if we artificially raised prices for electric usage in some sectors above the actual cost, that that was not a very effective or fair way to try to compel rationing. There was a movement in the country in the 1970s to adopt what was called incremental pricing for electric utilities. That is, the more units of electricity you use, the higher price you paid for each unit regardless of what the cost of the unit was. There was a national study that our company and other companies were involved in. The Electric Power Research Institute was involved in it and finally, perhaps through the passage of time, the idea was tested and rejected in several states, and that went away. Also, there were theories of alternative sources of power. Some proved to be feasible. Some did not prove to be very feasible, largely because we found that there are many more gas reserves in the world. The OPEC war ended. The prices of oil and gas began to drop substantially. That removed the economic underpinnings for drastic, forced draconian kinds of conservation. But, I think the lessons that we learned are lessons that are still being put to good use in terms of lighting and building design. Appliances today are much more energy efficient than they were, just as automobiles have been much more fuel efficient than they were before the energy crisis. Although the automobile industry seems to be moving back to the SUVs and the big gas-guzzlers, which is interesting. What will happen ten years from now, we don’t know. I think our company was probably typical of what many companies did by encouraging conservation. We helped with the construction of a demonstration solar house, even though solar power in this part of the world, in this latitude, is not effective. You have to have a backup source of power. In Key West or Arizona or New Mexico it is much different. We did a number of things and I think they could be replicated on a wide scale in North Carolina. [We did these things] just to illustrate to the public that, “Hey, these are things that you need to think about. [These are] things that you could do to conserve.” We worked with our large industrial users to help them achieve the production they needed by using their energy more wisely. All that goes on today.