Duke Energy and Progress Energy have agreed to disclose additional information about their ongoing efforts to comply with the swine/poultry waste-to-energy obligations included in the Renewable Energy & Energy Efficiency Portfolio Standard (REPS) law. The utilities filed a settlement agreement on Tuesday, July 31 with the North Carolina Utilities Commission.

Earlier this summer, North Carolina’s electric suppliers — Duke, Progress, Dominion and the municipal and cooperative power companies — indicated to the Commission that they would not be able to comply with their 2012 and 2013 swine and poultry waste-to-energy REPS requirements.

Duke and Progress entered into an agreement with the North Carolina Sustainable Energy Association (NCSEA), the North Carolina Pork Council, the North Carolina Poultry Federation and the North Carolina Farm Bureau. The agreement shows how the parties are collaboratively moving policy forward for North Carolina’s renewable energy and energy efficiency industries.

NCSEA’s primary objectives in settling with the above parties were to:

1) position the REPS and the swine, solar and poultry set asides in a way that insulates these policies from reduction in scale or scope or elimination in 2013 by the General Assembly;
2) create a transparent, achievable path to compliance with all three set asides – swine, solar and poultry, and
3) achieve an outcome that matches the unique compliance status and needs of the three set asides. 

If approved by the Utilities Commission, the agreement will help to ensure the utilities’ future compliance with the swine and poultry set-asides such as improving transparency and communication.

Under the agreement, in addition to the reporting requirements, Duke and Progress would also:

• Create an information sheet for prospective waste-to-energy developers so their business planning can be as thorough as possible;
• Retire 22 percent more solar Renewable Energy Certificates (RECs) in 2012 and 2013 than is mandated by statute; and
• Forego trying to secure swine and poultry RECs through a buyers’ group, which the utilities learned was not the optimal method for trying to procure such RECs

While the Public Staff is not a party to the agreement, NCSEA hopes they will come to support the agreement in the coming month. NCSEA commends the parties involved in the agreement for their work. If the Commission approves the agreement, NCSEA believes it would benefit all of North Carolina as we strive to create more resilient, secure and affordable energy future.

The Commission is scheduled to hold a hearing on Aug. 28. But the Public Staff has requested an extension so the hearing may be postponed until September.

Download a copy of the agreement here.

To learn how this agreement will strengthen the REPS law and benefit swine and poultry waste-to-energy developers, please download NCSEA's presentation here.

Currently available information indicates, but not conclusively, that the utilities are on a path to fully comply with the swine and poultry set asides if allowed a compliance delay in 2012 and possibly 2013.  In contrast, the much more developed and competitive solar market has worked well with the utilities to fulfill the solar set aside far into the future, placing the solar industry at risk of a boom/bust business cycle over the next few years for systems around 1,000kW in capacity and smaller. 

While it was a victory that the NC Utilities Commission requires Duke Energy and Progress Energy to provide $2 million to NC GreenPower as a condition of their approval of the utilities’ merger, if the past is an accurate indicator of the future, the $2 million of funds will largely go to support the smallest of renewable energy systems, primarily residential rooftop solar.

In NCSEA’s constant effort to create policy outcomes that meet each resource sector without compromising the overarching objective of a resilient, prosperous and secure clean energy future for all of North Carolina, we arrived at the agreement.  The settlement agreement accelerates the retirement of some solar RECs as part of any likely regulatory delay in utility compliance with the swine and poultry waste set asides, and does so in a way that further insulates the swine and poultry set asides from growing legislative attacks that will be in full force in 2013. 

NCSEA believes that this was the best possible outcome for keeping all three resources (swine, solar and poultry) on a path to market scale up, cost reduction, and greater affordability and market accessibility for ratepayers, industry and the utilities. Our analysis indicates that this is the most consistent possible outcome with past NCUC decisions on REPS rules and cost recovery, and the intentions of the REPS law.  Conventional energy is affordable because of the massive, long-running subsidies it has received directly and indirectly over the last few years as well as the last hundred years.

In these difficult times when clean energy is increasingly being used a political football to score ideological partisan points, it is critical that NCSEA be able to negotiate these types of agreements to keep our energy economy on a path to greater clean energy affordability and accessibility.