On August 3, 2010, the North Carolina Utilities Commission (“Commission”) issued changes to the rules implementing NC’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS), Rules R8-64 to R8-69.  The changes are mostly procedural, but will impact how the owners and operators of renewable energy facilities become eligible to produce qualifying Renewable Energy Certificates (RECs) and otherwise comply with the REPS.  The new rules are set forth in the Commission’s August 3, 2010 Order in Docket E-100, Sub 113. 

A number of the rule changes the Commission adopted were made in response to comments filed by NCSEA.  For example, Duke Energy Carolinas, Inc. (“Duke”) asked the Commission to adopt a requirement that each qualifying renewable energy facility demonstrate financial viability at the time it filed the required initial registration.  According to Duke, if the cost to produce a kW of electricity exceeded the avoided costs of the host utility, the qualifying facility should be required to demonstrate how it planned to make up the short fall because otherwise, it might be assumed that the host utility had to pay more than its avoided costs.  NCSEA opposed this requirement because the host utility’s obligations are a matter of law and did not fluctuate depending upon the qualifying facilities costs.  The Public Staff also opposed Duke’s suggestion (albeit for different reasons) and the Commission rejected it.

Also, in response to comments filed by NCSEA, the Commission deleted cross-references in the registration and annual renewal process to the Energy Information Administration’s “Form EIA-923.”  Previously, the Commission required facilities to file with the Commission certain information sought in Form EIA-923 even if the facility was not required to file that form, i.e., had a capacity below the threshold for filing that form, 1 MW.  In response to NCSEA’s comments, the Commission eliminated that requirement.  Now, all of the information a facility is required to file with the Commission on an annual basis is specifically set forth in the relevant rule, Rule R8-66(b). The Commission also adopted a standard “registration form” to be used in the initial registration of a facility and in response to another NCSEA comment, the Commission has agreed to allow owners or operators to file annual certifications via NC-RETS by April 1 each year.  Previously, annual updates were required in a written submission on the anniversary of the original registration which made the filing date different for each facility. 

At the suggestion of many parties, the Commission changed the rules to rely on NC-RETS for information that would otherwise be provided by required filings or annual updates.  This decision will help eliminate written submissions and administrative duplications.  However, this change also will perpetuate the transparency problem facing the industry.  For example, owners of renewable energy facilities were required by Rule R8-66(b)(5) to inform the Commission annually of the number of RECs sold and to whom.  Based on comments that this information will be reported in NC-RETS, the Commission eliminated the requirement.  NC-RETS treats such information as business confidential, however, and it will not be readily available to the public.

We refer you to the modified rules in the August 3, 2010 Order, to ascertain all changes to the rules.  The Commission also has asked for comments on certain aspects of the rules by September 20, 2010.  Thus, to the extent you have thoughts or comments on the open issues (the ones the Commission specifically requested comments on) we ask that you contact Cristina Starr (cristina@energync.org) or Kurt Olson (kurt@energync.org) at NCSEA so your ideas and comments can be conveyed to the Commission.