By Roy L. Hales
Originally published on The ECOReport
There appears to have been a victory for solar energy in North Carolina. In what is becoming an all too familiar theme, Duke Energy and Dominion North Carolina Power sought to lower the evaluation formula (the avoided cost rate) for solar energy being fed to the grid. Though the State Utilities Commission agreed that there may be costs that could be added to “a utility’s avoided cost calculations,” they pointed out that there are also benefits which the utilities failed to consider. In fact (p 61), “a comprehensive evaluation of solar integration costs in North Carolina has not been undertaken.” The utilities have to file their proposed avoided cost rate in March.
Need To Be Consistent
“The Commission recognized that the natural gas combustion turbine costs that the utilities file in their long term integrated resource plans is different from what they use for calculating avoided costs,”said Ivan Urlaub, Executive Director of the NC Sustainable Energy Association (NCSEA) and founder and Board member of the NC Clean Energy Business Alliance.“The Commission is saying these two need to be consistent. We need more transparency on how the utilities are calculating their avoided costs.”
He added, “We filed a lot of comments and expert witness testimony quantifying the additional values of solar in this proceeding. They weren’t explicitly recognized in the order that the Commission issued on New Year’s Eve, but that does not mean they won’t be recognized in the future.”
Witnesses testified that solar energy provided North Carolina with:
- (p 15) cost effective, clean electricity generation, even if those resources are not built by the utility companies.
- (p 25) energy that is frequently below the wholesale power market price
- (p 8) a reduction in the amount of fuel the utility otherwise would need to purchase for power plants.
Utilities argued that (p 27) any estimate of solar’s value “might be speculative.” They (p 34) “do not need capacity until 2016 or 2017.”
Without Adverse Impacts
The Commission disagreed. Up until this point, solar had spread (p 56) “without adverse impacts to utility ratepayers. There is no evidence that the current framework fails to comply with the requirements of Section 210 of PURPA or otherwise disadvantages QFs. Absent such evidence, the Commission determines that the conflicting evidence presented in this docket justifies its continuation going forward.”
Solar owners will continue to be paid the avoided cost rate for 15 years. The utilities wanted to reduce this to 10, which would have made the financing significantly more expensive.
The utilities also tried to reduce the size limit for projects from 5 megawatts to 100 kilowatts (a tenth of a megawatt).
The Winners In This
“That really would have shut down utility scale development. We’re seeing a lot of data and analysis suggesting that the economy is better off with this expansion of clean energy in the state. A lot of people were shocked by the proposals put forward by the utilities. They were so different from what is in place. The economy and the customers are really the winners in this,” said Urlaub.
North Carolina is one of America’s fastest growing markets for clean energy solutions. NCSEA records show there were 18,404 full-time employees in this sector during 2013.
(Image at top of page: Fuquay rooftop solar, New Bern, NC, ESA Renewables)