Topic: Duke Energy (2)
REPS Update: Utilities Meet Solar Set Aside Goals Through 2014
Our state's Renewable Energy and Energy Efficiency Portfolio Standard, or REPS, requires North Carolina's electric utilities to use solar electric or solar thermal energy facilities to provide at least .02% of their total electric sales to retail customers in 2010. This percentage increases to 0.20% by 2018. While this is only a small part of the 12.5% total renewable energy and energy efficiency combined requirement that the utilities must meet by year 2021, the solar-specific requirement was designed to facilitate the creation of a statewide market for solar by driving down costs through the establishment of a competitive solar industry.
Since nearly all of the solar set-aside requirement has been met for the next four years, the market for utility-scale solar energy in the next few years will be much smaller than anticipated. According to statements made to the media by the electric utilities over the past three years, one was led to believe that solar power alone would have exceeded the REPS law's cost limits set by our legislators. In fact, barely one-third of the cost cap has been used by solar power, and as a result of North Carolina's rapid solar market growth and global market demand, the cost of solar continues to decline.
If the solar "set aside" requirement is any indication of how easy and cost-effective it has been for the utilities to comply with the REPS, then the law appears to be too timid - we could be creating many more jobs in our state. NCSEA has consistently received reports from solar, wind, hog waste, and biomass companies, farmers, and investors over the past two years reporting that their renewable energy projects were rejected by electric utilities at prices below the cost estimates used by the legislature in creating the 2007 REPS law - commonly referred to as the "La Capra Study." More importantly, many project proposals have been rejected at prices comparable to or lower than what we can reasonably expect new nuclear power plants to cost ratepayers.
To more fully realize the market and job growth the solar industry can provide - and all renewables and energy efficiency solutions - our state decision-makers now have their first data points showing that an increase in our state's use of solar power and energy efficiency solutions will cost less than originally estimated and that the solar and energy efficiency industries can quickly and cost-effectively create the well-paying jobs our citizens need.
3/31/09 Net Metering Ruling by the NC Utilities Commission
On March 31, 2009, the NC Utilities Commission issued their much anticipated Order changing North Carolina's "Net Metering Policy," which will become effective June 1, 2009. NCSEA's initial analysis of the Order identifies the following (minor) hard fought victories, which are listed below. After 3 years of NCSEA's work with our members, donors, grant funders, the NC Utilities Commission, Duke Energy and Progress Energy leading up to this most recent ruling on net metering, the Commission has agreed in part or entirely with NCSEA on many points; however, much more work lies ahead.
NCSEA first appeared before the NC Utilities Commission on October 19, 1998, to make a presentation regarding renewable energy and electric utility industry restructuring. In its presentation, NCSEA asked the Commission to institute a generic proceeding to consider adopting a net metering requirement in North Carolina. Due to NCSEA’s request, the Commission issued an Order on November 18, 1998, that initiated investigation and comments on the issue.
Click here to view the full net metering Order (e100, sub 83), issued on March 31, 2009.
The Commission made the following (minor) improvements to North Carolina's net metering policy, and ordered Duke Energy, Progress Energy, and Dominion to revise their net metering programs accordingly:
- Increase eligible system size up to 1 MW
- Remove the aggregate limit on net metered systems (previously restricted at 0.2% of the prior year's retail peak load
- Customers can choose which rate schedule they net meter under, BUT can only retain ownership of excess Renewable Energy Credits (RECs) associated with excess generation if a customer chooses to net meter under Time of Use Demand rate offered by the utility
- The Commission rejected Progress Energy's motion to include the "cost of net metering" under the REPS incremental cost rider, which means they cannot inflate the cost of compliance with the REPS in CEO Bill Johnson's attempts to minimize the amount of renewable energy implemented under the REPS law
- All technologies defined as "renewable energy resource" by NC's REPS law, except for thermal energy, are eligible to net meter up to 1 MW system size
- Duke Energy will revise their "SCG Rider" which is an alternative to "net metering" to also increase the eligible system size limit for this rider to 1 MW
The utility still cannot bill for "standby charges" on renewable energy systems under 20 kW residential and 100 kW commercial. In fact, NCSEA called the Commission's attention in this proceeding to Dominion's violation of the no standby charge ruling in the existing net metering tariff. The Commission Order specifies that Dominion remedy this violation.
NCSEA's initial analysis: For commercial customers, who are typically already on Time of Use Demand rates, that install distributed generation, all the RECs are clearly owned by the customer and can be sold. This especially benefits commercial customers that install systems that are 100 kW and under. For residential customers, the ruling allows net metering on the same predictable rate structure that they're accustomed and they will offset their energy consumption in the near- and long-term future as electricity rates rise. The new rules also remove the aggregate cap so distributed generation can be widely adopted.
North Carolina's strong interconnection standard and new net metering policy are proof positive that NCSEA is succeeding in our mission to create a sustainable energy economy for NC; however, much more work lies ahead. Your membership dues, investments in NCSEA and personal support make it possible for us to help you create a sustainable energy future for North Carolina and the broader Southeast.
This ruling was made possible due to NCSEA's work with our members, donors, grant funders, the NC Utilities Commission, Duke Energy and Progress Energy. In 2008, many of our members joined NCSEA and Vote Solar to petition the NC Utilities Commission and General Assembly, asking them to make net metering fair for consumers across NC. Also in 2008, many citizens attended public hearings and submitted consumer letters declaring their agreement with NCSEA's position on net metering, along with the highly credible filings of the Interstate Renewable Energy Council (sponsor of NCSEA's Making Energy Work forum in February) and WalMart. Telling the story of their personal experiences helped frame the context within which the Commission's decision developed, and thus improving our State's net metering policy.
What is that? "Defining" the New Energy Economy...
"Net metering" refers to a billing arrangement whereby a customer who owns and operates an electric generating facility, such as solar on their rooftop, is billed according to the difference over a billing period between the amount of energy the customer uses and the amount of energy it generates. Additionally, they're able to rollover the excess energy generated for the current month to offset next month's bill. Net metering is commonly referred to as the policy that "lets your meter spin backwards".
"Interconnection" is the technical rules for customers to "plug in" or connect to the electricity grid. In July 2008, the NC Utilities Commission largely agreed with NCSEA in making dramatic improvements to NC's simplified interconnection standard. As a result, the 2008 national "Freeing the Grid" report increased NC's grade for interconnection from an 'F' to 'B+'.
"Standby charges" are fees assessed on a distributed generation owner's bill to cover the utility's cost of "standing by" ready to provide electricity at times when the owner's generation system goes down.
A "tariff" is a rate schedule that has contractual requirements.
