NC Utilities Commission Hears Oral Arguments in Duke Energy’s Proposed Green Source Advantage Program

On September 4, the North Carolina Utilities Commission (NCUC) heard Oral Arguments in proposed the Green Source Advantage (GSA) program docket. As you might recall, GSA is Duke’s proposed green tariff for large consumers of energy, including specifically the military and the University of North Carolina, that arose out of HB 589 and is intended by statute to allow large consumers of energy to negotiate directly with renewable energy facilities for the procurement of renewable energy. Earlier this year NCSEA and numerous other business, military, and education leaders – including Walmart, Apple, Google, the U.S. Department of Defense, and the University of North Carolina at Chapel-Hill – shared their concerns about Duke Energy’s proposed GSA program with the NC Utilities Commission. You can read more about the sign-on letter and the subsequent Joint Motion for Leave to file Sur-Reply Comments on our blog.

After reviewing the filings submitted by intervenors, the NCUC scheduled Oral Arguments for September 4, 2018. During the proceeding, intervenors were given the opportunity to present their concerns about the proposed GSA program, and Commissioners were given an opportunity to ask questions.

Most of the questions from the Commissioners centered around the bill credit provision, which, as initially proposed by Duke, would be based on the weighted average of their CPRE projects. NCSEA and other intervenors do not support this determination because it is not reflective of Duke’s actual costs and generated from an unrelated energy procurement program.

Leading up to the Oral Arguments Duke entered into a settlement agreement with Wal-Mart, which presented an additional possible bill credit mechanism. NCSEA and other intervenors have concerns about the agreement because the statute says that bill credits cannot exceed the avoided cost, and under the terms of the settlement agreement there are occasions when the bill credit would likely exceed the commission determined avoided cost rate. Furthermore, both the stipulated bill credit mechanism between Wal-Mart and either Duke and the CPRE mechanism would rely upon finding an avoided cost that is materially different than the commission determined avoided cost rate. NCSEA believes that the statute intended for avoided cost to be commission directed—not a negotiable term for Duke and potential customers.

Additional lines of questioning during the Oral Arguments pertained to the calculation of avoided cost and whether the program proposed by Duke truly holds non-participants of the program neutral (that is, neither harmed nor benefitted). NCSEA believes that under both of the proposed programs, the initially proposed plan and the plan stipulated in the Wal-Mart agreement, Duke or non-participants of the program would improperly benefit from the program due to cross subsidies.

The arguments presented by intervenors made it clear that the proposed program would not work for the businesses represented, nor would it be likely to produce opportunities for independent power producers to enter the market. As NCSEA and others await the Commission’s final ruling, we hope that the resulting Green Source Advantage program will attract and serve business, university, and military customers.

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