GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
H D
HOUSE DRH10099-MH-3 (09/13)
Short Title: Affordable and Reliable Energy Act. |
(Public) |
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Sponsors: |
Representatives Hager, Collins, Avila, and Cleveland (Primary Sponsors). |
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Referred to: |
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A BILL TO BE ENTITLED
AN ACT to reduce tHE burden of high energy costs on the citizens of north carolina by eliminating renewable energy portfolio standards; and to provide for cost recovery by public utilities for certain costs of compliance with Renewable Energy Portfolio Standards.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 62-2(a) reads as rewritten:
"§ 62-2. Declaration of policy.
(a) Upon investigation, it has been determined that the rates, services and operations of public utilities as defined herein, are affected with the public interest and that the availability of an adequate and reliable supply of electric power and natural gas to the people, economy and government of North Carolina is a matter of public policy. It is hereby declared to be the policy of the State of North Carolina:
(1) To provide fair regulation of public utilities in the interest of the public;
(2) To promote the inherent advantage of regulated public utilities;
(3) To promote adequate, reliable and economical utility service to all of the citizens and residents of the State;
(3a) To assure that resources
necessary to meet future growth through the provision of adequate, reliable
utility service include use of the entire spectrum of demand-side options,service,
including but not limited to conservation, load management and efficiency
programs, as additional sources of energy supply and/or energy demand
reductions. To that end, to require energy planning and fixing of rates in a
manner to result in the least cost mix of generation and demand-reduction
measures which is achievable, including consideration of appropriate rewards to
utilities for efficiency and conservation which decrease utility bills;
(4) To provide just and reasonable rates and charges for public utility services without unjust discrimination, undue preferences or advantages, or unfair or destructive competitive practices and consistent with long-term management and conservation of energy resources by avoiding wasteful, uneconomic and inefficient uses of energy;
(4a) To assure that facilities necessary to meet future growth can be financed by the utilities operating in this State on terms which are reasonable and fair to both the customers and existing investors of such utilities; and to that end to authorize fixing of rates in such a manner as to result in lower costs of new facilities and lower rates over the operating lives of such new facilities by making provisions in the rate-making process for the investment of public utilities in plants under construction;
(5) To encourage and promote harmony between public utilities, their users and the environment;
(6) To foster the
continued service of public utilities on a well-planned and coordinated basis
that is consistent with the level of energy needed for the protection of public
health and safety and for the promotion of the general welfare as expressed in
the State energy policy;policy; and
(7) To
seek to adjust the rate of growth of regulated energy supply facilities serving
the State to the policy requirements of statewide development;
(8) To cooperate
with other states and with the federal government in promoting and coordinating
interstate and intrastate public utility service and reliability of public utility
energy supply;supply.
(9) To
facilitate the construction of facilities in and the extension of natural gas
service to unserved areas in order to promote the public welfare throughout the
State and to that end to authorize the creation of expansion funds for natural
gas local distribution companies or gas districts to be administered under the
supervision of the North Carolina Utilities Commission; and
(10) To promote the
development of renewable energy and energy efficiency through the implementation
of a Renewable Energy and Energy Efficiency Portfolio Standard (REPS) that will
do all of the following:
a. Diversify
the resources used to reliably meet the energy needs of consumers in the State.
b. Provide
greater energy security through the use of indigenous energy resources
available within the State.
c. Encourage
private investment in renewable energy and energy efficiency.
d. Provide
improved air quality and other benefits to energy consumers and citizens of the
State."
SECTION 2. G.S. 62-133.8 reads as rewritten:
"§ 62-133.8.
Renewable Energy and Energy Efficiency Portfolio Standard (REPS).Renewable
Energy.
(a) Definitions. - As used in this section:
(1) "Combined
heat and power system" means a system that uses waste heat to produce
electricity or useful, measurable thermal or mechanical energy at a retail
electric customer's facility.
(2) "Demand-side management" means activities, programs, or initiatives undertaken by an electric power supplier with customer approval or by its customers to shift the timing of electricity use from peak to nonpeak demand periods. "Demand-side management" includes, but is not limited to, load management, electric system equipment and operating controls, direct load control, and interruptible load.
(3) "Electric power supplier" means a public utility, an electric membership corporation, or a municipality that sells electric power to retail electric power customers in the State.
(3a) "Electricity demand reduction" means a measurable reduction in the electricity demand of a retail electric customer that is voluntary, under the real-time control of both the electric power supplier and the retail electric customer, and measured in real time, using two-way communications devices that communicate on the basis of standards.
(4) "Energy efficiency measure" means an equipment, physical, or program change implemented after January 1, 2007, that results in less energy used to perform the same function. "Energy efficiency measure" includes, but is not limited to, energy produced from a combined heat and power system that uses nonrenewable energy resources. "Energy efficiency measure" does not include demand-side management.
(5) "New renewable energy facility" means a renewable energy facility that either:
a. Was placed into service on or after January 1, 2007.
b. Delivers or has delivered electric power to an electric power supplier pursuant to a contract with NC GreenPower Corporation that was entered into prior to January 1, 2007.
c. Is a
hydroelectric power facility with a generation capacity of 10 megawatts or
less that delivers electric power to an electric power supplier.
(6) "Renewable
energy certificate" means a tradable instrument that is equal to one
megawatt hour of electricity or equivalent energy supplied by a renewable
energy facility, new renewable energy facility, or reduced by implementation of
an energy efficiency measure that is used to track and verify compliance with
the requirements of this section as determined by the Commission. A
"renewable energy certificate" does not include the related emission
reductions, including, but not limited to, reductions of sulfur dioxide, oxides
of nitrogen, mercury, or carbon dioxide.
(7) "Renewable
energy facility" means a facility, other than a hydroelectric power
facility with a generation capacity of more than 10 megawatts, facility that
either:
a. Generates electric power by the use of a renewable energy resource.
b. Generates useful, measurable combined heat and power derived from a renewable energy resource.
c. Is a solar thermal energy facility.
(8) "Renewable
energy resource" means a solar electric, solar thermal, wind, hydropower,
geothermal, or ocean current or wave energy resource; a biomass resource,
including agricultural waste, animal waste, wood waste, spent pulping liquors,
combustible residues, combustible liquids, combustible gases, energy crops, or
landfill methane; waste heat derived from a renewable energy resource and used
to produce electricity or useful, measurable thermal energy at a retail
electric customer's facility; or hydrogen derived from a renewable energy
resource. "Renewable energy resource" does not include peat, a
fossil fuel, or nuclear energy resource.
(b) Renewable
Energy and Energy Efficiency Standards (REPS) for Electric Public Utilities. -
(1) Each
electric public utility in the State shall be subject to a Renewable Energy and
Energy Efficiency Portfolio Standard (REPS) according to the following
schedule:
Calendar
Year
REPS Requirement
2012
3% of 2011 North Carolina retail sales
2015
6% of 2014 North Carolina retail sales
2018
10% of 2017 North Carolina retail sale
2021 and
thereafter
12.5% of 2020 North Carolina retail sales
(2) An
electric public utility may meet the requirements of this section by any one or
more of the following:
a. Generate
electric power at a new renewable energy facility.
b. Use
a renewable energy resource to generate electric power at a generating facility
other than the generation of electric power from waste heat derived from the
combustion of fossil fuel.
c. Reduce
energy consumption through the implementation of an energy efficiency measure;
provided, however, an electric public utility subject to the provisions of this
subsection may meet up to twenty-five percent (25%) of the requirements of this
section through savings due to implementation of energy efficiency measures.
Beginning in calendar year 2021 and each year thereafter, an electric public
utility may meet up to forty percent (40%) of the requirements of this section
through savings due to implementation of energy efficiency measures.
d. Purchase
electric power from a new renewable energy facility. Electric power purchased
from a new renewable energy facility located outside the geographic boundaries
of the State shall meet the requirements of this section if the electric power
is delivered to a public utility that provides electric power to retail
electric customers in the State; provided, however, the electric public utility
shall not sell the renewable energy certificates created pursuant to this
paragraph to another electric public utility.
e. Purchase
renewable energy certificates derived from in-State or out-of-state new
renewable energy facilities. Certificates derived from out-of-state new
renewable energy facilities shall not be used to meet more than twenty-five
percent (25%) of the requirements of this section, provided that this
limitation shall not apply to an electric public utility with less than 150,000
North Carolina retail jurisdictional customers as of December 31, 2006.
f.
Use electric power that is supplied by a new renewable energy facility or
saved due to the implementation of an energy efficiency measure that exceeds
the requirements of this section for any calendar year as a credit towards the
requirements of this section in the following calendar year or sell the
associated renewable energy certificates.
g. Electricity
demand reduction.
(c) Renewable
Energy and Energy Efficiency Standards (REPS) for Electric Membership
Corporations and Municipalities. -
(1) Each
electric membership corporation or municipality that sells electric power to
retail electric power customers in the State shall be subject to a Renewable
Energy and Energy Efficiency Portfolio Standard (REPS) according to the
following schedule:
Calendar Year
REPS Requirement
2012
3% of 2011 North Carolina retail sales
2015
6% of 2014 North Carolina retail sales
2018 and
thereafter
10% of 2017 North Carolina retail sales
(2) An
electric membership corporation or municipality may meet the requirements of
this section by any one or more of the following:
a. Generate
electric power at a new renewable energy facility.
b. Reduce
energy consumption through the implementation of demand-side management or
energy efficiency measures.
c. Purchase
electric power from a renewable energy facility or a hydroelectric power
facility, provided that no more than thirty percent (30%) of the requirements
of this section may be met with hydroelectric power, including allocations made
by the Southeastern Power Administration.
d. Purchase
renewable energy certificates derived from in-State or out-of-state renewable
energy facilities. An electric power supplier subject to the requirements of
this subsection may use certificates derived from out-of-state renewable energy
facilities to meet no more than twenty-five percent (25%) of the requirements
of this section.
e. Acquire
all or part of its electric power through a wholesale purchase power agreement
with a wholesale supplier of electric power whose portfolio of supply and
demand options meets the requirements of this section.
f.
Use electric power that is supplied by a new renewable energy facility or
saved due to the implementation of demand-side management or energy efficiency
measures that exceeds the requirements of this section for any calendar year as
a credit towards the requirements of this section in the following calendar
year or sell the associated renewable energy certificates.
g. Electricity
demand reduction.
(d) Compliance
With REPS Requirement Through Use of Solar Energy Resources. - For calendar
year 2018 and for each calendar year thereafter, at least two-tenths of one
percent (0.2%) of the total electric power in kilowatt hours sold to retail
electric customers in the State, or an equivalent amount of energy, shall be
supplied by a combination of new solar electric facilities and new metered
solar thermal energy facilities that use one or more of the following
applications: solar hot water, solar absorption cooling, solar
dehumidification, solar thermally driven refrigeration, and solar industrial
process heat. The terms of any contract entered into between an electric power
supplier and a new solar electric facility or new metered solar thermal energy
facility shall be of sufficient length to stimulate development of solar
energy; provided, the Commission shall develop a procedure to determine if an
electric power supplier is in compliance with the provisions of this subsection
if a new solar electric facility or a new metered solar thermal energy facility
fails to meet the terms of its contract with the electric power supplier. As
used in this subsection, "new" means a facility that was first placed
into service on or after January 1, 2007. The electric power suppliers shall
comply with the requirements of this subsection according to the following
schedule:
Requirement for Solar
Calendar Year
Energy Resources
2010
0.02%
2012
0.07%
2015
0.14%
2018
0.20%
(e) Compliance
With REPS Requirement Through Use of Swine Waste Resources. - For calendar year
2018 and for each calendar year thereafter, at least two-tenths of one percent
(0.2%) of the total electric power in kilowatt hours sold to retail electric
customers in the State shall be supplied, or contracted for supply in each
year, by swine waste. The electric power suppliers, in the aggregate, shall
comply with the requirements of this subsection according to the following
schedule:
Requirement for Swine
Calendar Year Waste
Resources
2012
0.07%
2015
0.14%
2018
0.20%
(f) Compliance
With REPS Requirement Through Use of Poultry Waste Resources. - For calendar
year 2014 and for each calendar year thereafter, at least 900,000 megawatt
hours of the total electric power sold to retail electric customers in the
State or an equivalent amount of energy shall be supplied, or contracted for
supply in each year, by poultry waste combined with wood shavings, straw, rice
hulls, or other bedding material. The electric power suppliers, in the
aggregate, shall comply with the requirements of this subsection according to
the following schedule:
Requirement for Poultry
Calendar Year Waste
Resources
2012
170,000 megawatt hours
2013
700,000 megawatt hours
2014
900,000 megawatt hours
(g) Control of
Emissions. - As used in this subsection, Best Available Control Technology
(BACT) means an emissions limitation based on the maximum degree a reduction in
the emission of air pollutants that is achievable for a facility, taking into
account energy, environmental, and economic impacts and other costs. A biomass
combustion process at any new renewable energy facility that delivers electric
power to an electric power supplier shall meet BACT. The Environmental Management
Commission shall determine on a case-by-case basis the BACT for a facility that
would not otherwise be required to comply with BACT pursuant to the Prevention
of Significant Deterioration (PSD) emissions program. The Environmental
Management Commission may shall adopt rules to implement this
subsection. In adopting rules, the Environmental Management Commission shall
take into account cumulative and secondary impacts associated with the
concentration of biomass facilities in close proximity to one another. In
adopting rules the Environmental Management Commission shall provide for the
manner in which a facility that would not otherwise be required to comply with
BACT pursuant to the PSD emissions programs shall meet the BACT requirement.
This subsection shall not apply to a facility that qualifies as a new renewable
energy facility under sub-subdivision b. of subdivision (5) of subsection (a)
of this section.
(h) Cost Recovery and Customer Charges. -
(1) For the purposes of this subsection, the term "incremental costs" means all reasonable and prudent costs incurred prior to July 1, 2013, by an electric power supplier to:
a. Comply with the requirements of former subsections (b), (c), (d), (e), and (f) of this section that are in excess of the electric power supplier's avoided costs other than those costs recovered pursuant to G.S. 62-133.9.
b. Fund
research that encourages the development of renewable energy, energy
efficiency, or improved air quality, provided those costs do not exceed one
million dollars ($1,000,000) per year.
c. Comply with any federal mandate that is similar to the requirements of former subsections (b), (c), (d), (e), and (f) of this section that exceed the costs that the electric power supplier would have incurred under those subsections in the absence of the federal mandate.
(2) All reasonable and prudent costs incurred prior to July 1, 2013, by an electric power supplier to comply with any federal mandate that is similar to the requirements of former subsections (b), (c), (d), (e), and (f) of this section, including, but not limited to, the avoided costs associated with a federal mandate that exceeds the avoided costs that the electric power supplier would have incurred pursuant to former subsections (b), (c), (d), (e), and (f) of this section in the absence of the federal mandate, shall be recovered by the electric power supplier in an annual rider charge assessed in accordance with the schedule set out in subdivision (4) of this subsection increased by the Commission on a pro rata basis to allow for full and complete recovery of all reasonable and prudent costs incurred to comply with the federal mandate.
(3) Except as
provided in subdivision (2) of this subsection, the total annual incremental
cost to be incurred by an electric power supplier and recovered from the
electric power supplier's retail customers shall not exceed an amount equal to
the per-account annual charges set out in subdivision (4) of this subsection
applied to the electric power supplier's total number of customer accounts
determined as of December 31 of the previous calendar year. An electric
power supplier shall be conclusively deemed to be in compliance with the
requirements of subsections (b), (c), (d), (e), and (f) of this section if the
electric power supplier's total annual incremental costs incurred equals an
amount equal to the per-account annual charges set out in subdivision (4) of
this subsection applied to the electric power supplier's total number of customer
accounts determined as of December 31 of the previous calendar year. The
total annual incremental cost recoverable by an electric power supplier from an
individual customer shall not exceed the per-account charges set out in
subdivision (4) of this subsection except as these charges may be adjusted in
subdivision (2) of this subsection.
(4) An electric
power supplier shall be allowed to recover the incremental costs incurred prior
to July 1, 2013, to comply with the requirements of former subsections
(b), (c), (d), (e), and (f) of this section and fund research as provided in
subdivision (1) of this subsection through an annual rider not to exceed
the following per-account annual charges:
2015 and
Customer Class
2008-2011 2012-2014
thereafter
Residential per account
$10.00
$12.00
$34.00Commercial per account
$50.00
$150.00 $150.00
Industrial per account
$500.00
$1,000.00 $1,000.00
Customer Class 2008-2011 2012 and thereafter
Residential per account $10.00 $12.00
Commercial per account $50.00 $150.00
Industrial per account $500.00 $1,000.00
(5) The Commission
shall adopt rules to establish a procedure for the annual assessment of the per-account
charges set out in this subsection to an electric public utility's customers to
allow for timely recovery of all reasonable and prudent costs of compliance
with the requirements of former subsections (b), (c), (d), (e), and (f)
of this section and to fund research as provided in subdivision (1) of this
subsection. section. The Commission shall ensure that the costs to
be recovered from individual customers on a per-account basis pursuant to
subdivisions (2) and (3) of this subsection are in the same proportion as the
per-account annual charges for each customer class set out in subdivision (4)
of this subsection.
(6) After July 1, 2013, the Commission shall allow recovery under the annual rider described in this subsection only for the reasonable and prudent costs incurred prior to July 1, 2013. For the purposes of this subsection, "costs incurred prior to July 1, 2013," include the following:
a. Costs under renewable energy purchase contracts entered into prior to July 1, 2013.
b. The costs of construction of renewable energy facilities for which a certificate of public convenience and necessity has been issued by the Commission prior to July 1, 2013.
(i) Adoption of Rules. - The Commission shall adopt rules to implement the provisions of this section. In developing rules, the Commission shall:
(1) Provide for the monitoring of compliance with and enforcement of the requirements of this section.
(2) Include
a procedure to modify or delay the provisions of subsections (b), (c), (d),
(e), and (f) of this section in whole or in part if the Commission determines
that it is in the public interest to do so. The procedure adopted pursuant to
this subdivision shall include a requirement that the electric power supplier
demonstrate that it made a reasonable effort to meet the requirements set out
in this section.
(3) Ensure that
energy credited toward compliance with the provisions former
renewable energy portfolio standards of this section not be credited toward
any other purpose, including another renewable energy portfolio standard or
voluntary renewable energy purchase program in this State or any other state.
(4) Establish standards for interconnection of renewable energy facilities and other nonutility-owned generation with a generation capacity of 10 megawatts or less to an electric public utility's distribution system; provided, however, that the Commission shall adopt, if appropriate, federal interconnection standards.
(5) Ensure that the owner and operator of each renewable energy facility that delivers electric power to an electric power supplier is in substantial compliance with all federal and state laws, regulations, and rules for the protection of the environment and conservation of natural resources.
(6) Consider
whether it is in the public interest to adopt rules for electric public
utilities for net metering of renewable energy facilities with a generation
capacity of one megawatt or less.
(7) Develop procedures to track and account for renewable energy certificates, including ownership of renewable energy certificates that are derived from a customer owned renewable energy facility as a result of any action by a customer of an electric power supplier that is independent of a program sponsored by the electric power supplier.
(j) Report.
- No later than October 1 of each year, the Commission shall submit a report on
the activities taken by the Commission to implement, and by electric power
suppliers to comply with, the requirements of this section to the Governor, the
Environmental Review Commission, and the Joint Legislative Commission on
Governmental Operations. The report shall include any public comments received
regarding direct, secondary, and cumulative environmental impacts of the
implementation of the requirements of this section. In developing the report,
the Commission shall consult with the Department of Environment and Natural
Resources.
(k) Tracking of
Renewable Energy Certificates. No later than July 1, 2010, the The Commission
shall develop, implement, and maintain an Internet Web site for the online
tracking of renewable energy certificates in order to verify the compliance
of electric power suppliers with the REPS requirements of this section and
to facilitate the establishment of a market for the purchase and sale of
renewable energy certificates."
SECTION 2. This act becomes effective July 1, 2013.