Renewable Distributed Generation
While using different types of load management to meet the REPS is generally a tool available only to the electric service providers, private industry and individuals have a significant and increasing role to play in supplying the service providers with renewable distributed generation options. The electric service providers that have REPS obligations are looking at all options of procuring renewable energy and renewable energy certificates to meet the REPS.
In making the procurement decision, utilities are concerned with obtaining renewable energy and RECs at the lowest possible cost. This is the case not only because utilities do not want to be in the position to overpay for a product, but also because the regulated utilities’ contracts will be reviewed by the Public Staff and the Commission. For decades, supplying electricity in North Carolina was governed by the least-cost paradigm – basically meaning that utilities should supply customers with the lowest possible cost of electricity. The passage of the REPS has to some extent begun to change this paradigm to include other considerations aside from cost, but the REPS cost caps mean that the cost of renewable energy is still a paramount concern. Once a utility hits its REPS cost caps, it has met its REPS requirements even if it has not met its energy supply requirements.
For these reasons, utilities are most likely to look to those private renewable energy projects that: are able to come on-line and start producing RECs and/or renewable energy in a reasonable time frame; utilize proven technologies; and supply the renewable energy and RECs at a reasonable cost. In North Carolina, utilities generally issue requests for proposals (“RFPs”) to solicit larger renewable energy projects. For smaller projects, the utilities are increasingly offering standard contracts and pricing programs. Owners of private projects are also welcome to contact the utilities outside of these two avenues to discuss potential projects.
Please note that a joint RFP has been recently issued for swine waste-to-energy projects and that Progress Energy is administering the RFP on behalf of the buyers.
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