By Jim Kennerly, Policy and Regulatory Analyst
The NC Utilities Commission approved Duke Energy’s customer charges for its 2011 spending on 1) compliance with the Renewable Energy and Energy Efficiency Portfolio Standard (REPS) and 2) its fuel and fuel-related costs.
In a post-hearing brief filed in Duke Energy’s 2011 REPS cost recovery docket, NCSEA argued, among other things, that Duke Energy should disclose more information about the renewable energy research and development costs that it passes on to its North Carolina customers. The Commission agreed with NCSEA, ordering Duke Energy to disclose the results of those studies, subject to contractual limitations and limits on public disclosure of trade secrets protected by North Carolina law.
Through its involvement in the case, NCSEA discovered that Duke Energy has undertaken multiple studies related to impacts associated with increased renewable energy development. One such study related to the impact on reliability and power quality associated with increasing grid penetration of solar photovoltaic (PV) systems. Given that public disclosure of the results of this study would be valuable to clean energy service providers and government decision-makers, NCSEA argued that Duke Energy should disclose the information included in the studies paid for by its North Carolina customers.
NCSEA believes that greater transparency associated with the costs and benefits of our current energy path is critical, and applauds the Commission’s approach.
In Duke Energy’s 2011 fuel and fuel related cost recovery docket, NCSEA argued that Duke Energy should put in place a natural gas price risk management program, also known as “hedging”. Since Duke hedges its coal and uranium purchases to keep its costs down, NCSEA believes that Duke should also hedge its natural gas price purchases in order to protect its customers from the upside risk of potential future increases in the price of natural gas. While the Commission did not require Duke to engage in natural gas hedging, it noted that, in the future, Duke would be required to “defend the prudency of its decisions” to acquire the least-cost fuel mix.
For more information about Docket E-7, Sub 1002, Duke’s application to adjust its fuel rates, click here. For more information pertaining to Docket E-7, Sub 1008, Duke’s application for approval of its REPS riders, click here.