This past July the Utilities Commission considered an application by Duke Energy to register two test co-firings utilizing woody biomass with coal. While the evidentiary portion of this hearing has closed, there has not been a final ruling from the Commission on the eligibility of these facilities to earn renewable energy credits (RECs), nor have they indicated which direction they are leaning.
On the surface, Duke’s application was to determine if the two generating stations that underwent test co-firing could be listed as “New Renewable Energy Facilities” and earn REC retroactively for the test fires. The underlying debate that played out, however, was over the meaning of “biomass” as used in Senate Bill 3 – specifically over how to read the word “including”. While the interpretation of a single word may seem like a small detail, the ramifications on the size of biomass powered generating stations, the fuel sources that qualify as a “renewable biomass fuel”, and ultimately, the future composition of the biomass power arena in North Carolina could potentially be huge.
A the heart of the discussion were opposite interpretations between the utilities (represented by Duke Energy) and several intervening parties including the Environmental Defense Fund and Southern Environmental Law Center as to how to read the sentence: “… a biomass resource, including agricultural waste, animal waste, wood waste, spent pulping liquors, combustible residues, combustible liquids, combustible gases, energy crops, or landfill methane;…”. Duke Energy has taken the position that the listed biomass resources are meant to be examples and are therefore not exhaustive – so the fuel they utilized in the co-fire (whole tree chips) would qualify for RECs since it is of biomass origin. EDF/SELC has taken the position that the list is exhaustive, and as such only the fuels explicitly listed qualify for RECs
In actuality the issue is not really that black and white, and this was evident in the oral arguments and cross examinations that took place. Particularly, there was a focus on what, if any, sustainability requirements are in place with regard to biomass fuels; as well as how Duke Energy reached their resource estimates for the biomass fuel shed in North Carolina which in turn formed the basis of the assertion that without whole tree biomass they would potentially need to reevaluate their renewable compliance energy strategy.
Both Duke Energy and the intervening parties are in the process of composing and submitting final arguments based on the testimony and other evidence received during the day and a half of hearings. NCSEA plans to file a brief on the issues and will post an update once the Commission has reached their final ruling in this matter detailing the specific findings. In the meantime NCSEA members are welcome to contact Rich Crowley for additional details, questions, or to voice any concerns they have regarding the interpretation of the biomass list in Senate Bill 3.
