North Carolina regulators reject proposals to change utility-scale solar regulations

Dive Brief:

  • The North Carolina Utilities Commission followed the recommendation of its staff and left regulations unchanged on energy projects that qualify under the terms of the Public Utility Regulatory Policies Act (PURPA) of 1978. PURPA requires that utilities buy power produced by facilities that meet the specified terms.
  • The NCUC rejected proposals from Duke Energy Carolinas, Duke Energy Progress, and Dominion Power North Carolina, the state’s dominant electric utilities, to change the standard contract term and the formula for determining the avoided cost to which solar developers and other independent power producers are entitled.
  • The decision is regarded as a victory by North Carolina’s solar industry because the utilities’ proposals would have shortened the term of the power purchase agreements (PPAs), limited the size of systems eligible for PPAs, and reduced remuneration to potentially uneconomic levels.

Dive Insight:

The utilities proposed reducing North Carolina’s standard PPA for solar projects from 15 years to 10 years and reducing the size of qualifying solar projects from 5 megawatts to 100 kilowatts. Solar developers argued throughout the proceedings that such size and contract duration reductions would slow North Carolina’s solar growth.

The NCUC staff concluded that it would not be in North Carolina ratepayers’ benefit to reduce the project size and contract duration. It also decided against responding to solar advocates’ requests to increase the qualifying project size to 10 megawatts and the contract duration to 20 years.

Because North Carolina’s utilities have overbuilt power plant capacity, they argued that calculation of the avoided cost, the rate they must pay a developer for qualifying renewables generation, should only consider the energy value of developers’ output. The NCUC ruled the value of the output in meeting peak demand must be considered.

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Filed Under: Generation Solar & Renewables Regulation & Policy Corporate News
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