Bill Text: NC H909 | 2017-2018 | Regular Session | Amended


Bill Title: Sound Energy & Renewables Policy Act

Spectrum: Moderate Partisan Bill (Republican 14-2)

Status: (Introduced - Dead) 2017-04-26 - Re-ref to the Com on Energy and Public Utilities, if favorable, Finance, if favorable, Appropriations [H909 Detail]

Download: North_Carolina-2017-H909-Amended.html

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2017

H                                                                                                                                                    1

HOUSE BILL 909

 

 

Short Title:      Sound Energy & Renewables Policy Act.

(Public)

Sponsors:

Representatives Arp, J. Bell, and Dixon (Primary Sponsors).

For a complete list of sponsors, refer to the North Carolina General Assembly web site.

Referred to:

Rules, Calendar, and Operations of the House

April 26, 2017

A BILL TO BE ENTITLED

AN ACT TO ESTABLISH SOUND POLICIES FOR INCREASED UTILIZATION OF RENEWABLE ENERGY SOURCES, TO REFORM NORTH CAROLINA'S implementation of the public utilities regulatory policies act of 1978 and to provide for utility cost recovery for new qualifying facility generators, AND TO ASSURE LONG‑TERM RELIABLE ENERGY FOR NORTH CAROLINA CUSTOMERS AT FAIR AND REASONABLE RATES.

The General Assembly of North Carolina enacts:

 

PART I. STANDARD CONTRACTS FOR SMALL POWER PRODUCERS

SECTION 1.(a)  G.S. 62‑3 reads as rewritten:

"§ 62‑3.  Definitions.

As used in this Chapter, unless the context otherwise requires, the term:

(27a)    "Small power producer" means a person or corporation owning or operating an electrical power production facility with a power production capacity which, together with any other facilities located at the same site, does not exceed 80 megawatts of electricity and which depends upon renewable resources for its primary source of energy. For the purposes of this section, renewable resources shall mean: hydroelectric power. A small power producer shall not include persons primarily engaged in the generation or sale of electricity from other than small power production facilities.that qualifies as a "small power production facility" under 16 U.S.C. § 796, as amended.

."

SECTION 1.(b)  G.S. 62‑156 reads as rewritten:

"§ 62‑156.  Power sales by small power producers to public utilities.

(a)        In the event that a small power producer and an electric utility are unable to mutually agree to a contract for the sale of electricity or to a price for the electricity purchased by the electric utility, the commission Commission shall require the electric utility to purchase the power, under rates and terms established as provided in subsection (b) of this section.subsection (b) or (c) of this section as of the date the small power producer makes a commitment to sell to the electric utility. For purposes of this section, a commitment to sell arises upon the earlier of (i) 180 days prior to the date a small power producer is capable of delivering power to the electric utility or (ii) the date the small power producer is ready, willing, and able to commit to sell power to the electric utility and obligates itself to sell power to the electric utility, thereby committing to accept the risk associated with failure to begin delivering power as of the delivery commencement date.

(b)        No later than March 1, 1981, and atAt least every two years thereafter,years, the commission Commission shall determine the standard contract avoided cost rates to be included within the tariffs of the electric utility and paid by electric utilities for power purchased from small power producers,producers with a design capacity of 100 kilowatts or less, according to the following standards:

(1)        Term of Contract.Standard Contract for Small Power Producers up to 100 kW. Long‑term contracts up to 10 years for the purchase of electricity by the electric utility from small power producers with a design capacity up to and including one hundred kilowatts (100 kW) shall be encouraged in order to enhance the economic feasibility of these small power production facilities.

(3)        Availability and Reliability of Power. The rates to be paid by electric utilities for power avoided capacity purchased from a small power producer shall be established with consideration of the reliability and availability of the power. A future capacity need shall only be avoided in a year where the electric utility's most recent biennial integrated resource plan filed with the Commission under G.S. 62‑110.1(c) has identified a projected capacity need to serve system load and the identified need can be met by the type of small power producer resource based upon its availability and reliability of power, other than swine or poultry wastes for which a need is established consistent with G.S. 62‑133.8(e) and (f).

(c)        Nonstandard Rates for Purchases From Small Power Producers Above 100 kW. The rates to be paid by electric utilities to small power producers with a design capacity in excess of one hundred kilowatts (100 kW) shall be established through good‑faith negotiations between the electric utility and small power producer. In establishing rates for purchases from small power producers, the electric utility shall design rates and contracts at its forecasted avoided costs for a fixed two‑year term. Rates for the purchases shall take into account factors related to the individual characteristics of the small power producer, including the factors identified in subdivisions (b)(2) and (b)(3) of this section.

(d)       Notwithstanding any other provision of this section, an electric utility shall not be required to enter into a contract with or purchase power from a small power producer if the electric utility's obligation to purchase from the small power producer has been terminated pursuant to 18 C.F.R. § 292.309."

SECTION 1.(c)  This section applies to any standard contract rates approved by the Utilities Commission or nonstandard negotiated agreements entered into between a small power producer and electric utility on or after the date this section becomes effective.

 

PART II. COMPETITIVE PROCUREMENT OF RENEWABLE ENERGY

SECTION 2.(a)  Article 6 of Chapter 62 of the General Statutes is amended by adding a new section to read:

"§ 62‑110.8.  Competitive procurement of renewable energy.

(a)        Each electric utility shall file for Commission approval a process for the annual competitive procurement of electricity from new renewable energy facilities with the purpose of adding renewable energy resources to the State's generation resource portfolio in a manner that allows the State's electric utilities to continue to reliably and cost‑effectively serve customers' future energy needs. Renewable energy resources eligible to participate in the competitive procurement shall include resources identified in G.S. 62‑133.8(a)(8) but shall be limited to generators with a nameplate capacity rating of eighty megawatts (80 MW) or less. Subject to the limitations set forth in subsections (b) and (c) of this section, electric utilities subject to this section shall issue a request for proposals to procure renewable energy in an amount not to exceed the procured renewable capacity. For purposes of this section, "procured renewable capacity" means the following aggregate procurement levels: (i) for calendar years 2018‑2022, a total of four hundred megawatts (400 MW) of renewable energy each calendar year and (ii) for calendar years 2023 and thereafter, the offering of a competitive procurement, with the amount to be procured determined by the Commission, taking into consideration a showing of need evidenced by the electric utility's most recent biennial integrated resource plan or annual update filed pursuant to G.S. 62‑110.1(c).

(b)        Electric utilities may jointly or individually implement the aggregate competitive procurement requirements set forth in subsection (a) of this section, which shall include procurement of new renewable energy facilities to be owned by the soliciting electric utility or utilities and the purchase of renewable energy, capacity, and all environmental attributes from third‑party renewable energy facilities that commit to allow the procuring public utility rights to dispatch, operate, and control the solicited renewable energy facilities in the same manner as the electric utility's own generating resources. Procured renewable capacity in a given year shall be subject to the following limitations:

(1)        The amount of procured renewable capacity in a given year shall be reduced or eliminated if the total amount of installed renewable energy capacity not subject to economic dispatch or curtailment within the balancing authority areas of electric utilities subject to this section exceeds thirty‑five hundred megawatts (3,500 MW) as of the date an annual competitive procurement is issued. For purposes of this section, the term "balancing authority area" means the collection of generation, transmission, and loads within the metered boundaries of the balancing authority and the balancing authority maintains load‑resource balance within this area.

(2)        To ensure the cost‑effectiveness of procured renewable capacity, each electric utility's procurement obligation shall be capped by the electric utility's current forecast of its avoided cost over the term of the agreement.

(3)        Fifty megawatts (50 MW) of the four hundred megawatts (400 MW) annual competitive procurement of renewable energy established by subsection (a) of this section shall be procured from renewable energy generating facilities which produce electricity utilizing fuel derived from swine waste, poultry waste, or landfill gas and shall not be subject to the avoided cost limit.

(4)        No more than thirty percent (30%) of an electric utility's annual competitive procurement requirement may be satisfied through self‑development of new renewable energy resources offered by the electric utility or any subsidiary of the electric utility into the annual competitive procurement. This limitation shall not preclude an electric utility from acquiring any new renewable energy resources selected through the competitive procurement that are located within the electric utility's service territory.

(c)        Electric utilities subject to this section shall have authority to determine the location and amount of annual procurement within their respective balancing authority areas, whether located inside or outside the geographic boundaries of the State, taking into consideration (i) the State's desire to foster diversification of the siting of renewable energy resources throughout the State, (ii) the efficiency and reliability impacts of the siting of additional renewable energy resources in each electric utility's service territory, and (iii) the potential for increased delivered cost to an electric utility's customers as a result of siting additional renewable energy resources in an electric utility's service territory, including the additional costs of ancillary services that may be imposed due to the operational or locational characteristics of a specific renewable energy resource technology, such as nondispatchability, unreliability of availability, and creation or exacerbation of system congestion that may increase redispatch costs.

(d)       The competitive renewable energy procurement requirements established by this section shall be independently monitored by a third‑party evaluator to be approved by the Commission. All reasonable and prudent administrative and related expenses incurred to implement this section shall be recovered from market participants through administrative fees levied upon those that participate in the competitive bidding process, as approved by the Commission.

(e)        An electric utility may participate in any annual competitive procurement process but shall only participate within its assigned service territory.

(f)        An electric public utility subject to this section shall be authorized to recover the costs of all purchases from third‑party renewable energy resources and to recover the authorized revenue of any utility‑owned assets that are procured pursuant to this section through an annual rider approved by the Commission and reviewed annually. Provided it is in the public interest, the authorized revenue for any renewable energy resources owned by an electric public utility may be calculated on a market basis in lieu of cost‑of‑service based recovery, using data from the applicable competitive procurement to determine the market price in accordance with the methodology established by the Commission pursuant to subsection (g) of this section.

(g)        To implement the requirements of this section, the Commission shall adopt rules to:

(1)        Provide oversight of the competitive procurement process.

(2)        Provide for the waiver of regulatory conditions or code of conduct requirements that would unreasonably restrict an electric utility, or its affiliates, from participating in the annual competitive procurement process, unless the Commission finds that the waiver would not hold the electric utility's customers harmless.

(3)        Establishment of a procedure for expedited review and approval of certificates of pubic convenience and necessity, or the transfer thereof, for renewable energy facilities owned by the utility and procured pursuant to this section.

(4)        Establishment of a methodology to allow an electric public utility to recover its costs pursuant to subsection (f) of this section.

(5)        Provide for the establishment of a procedure for the Commission to modify or delay the provisions of this section, in whole or in part, if the Commission determines that it is in the public interest to do so.

(h)        The requirements of this section shall not apply to an electric utility serving fewer than 150,000 North Carolina retail jurisdictional customers as of January 1, 2017."

SECTION 2.(b)  G.S. 62‑153 reads as rewritten:

"§ 62‑153.  Contracts of public utilities with certain companies and for services.

(b)        No public utility shall pay any fees, commissions or compensation of any description whatsoever to any affiliated or subsidiary holding, managing, operating, constructing, engineering, financing or purchasing company or agency for services rendered or to be rendered without first filing copies of all proposed agreements and contracts with the Commission and obtaining its approval. Provided, however, that this subsection shall not apply to motor carriers of passengers. passengers or power purchase agreements entered into pursuant to the competitive renewable energy procurement process established by G.S. 62‑133.8."

SECTION 2.(c)  The competitive renewable energy procurement process required by G.S. 62‑110.8(a), as enacted by subsection (a) of this section, shall be filed with the Utilities Commission by electric public utilities no later than 180 days after this section becomes effective.

 

PART III. COST RECOVERY FOR SMALL POWER PRODUCER PURCHASES OF NEW RENEWABLE ENERGY COMPETITIVE PROCUREMENT

SECTION 3.  G.S. 62‑133.2 reads as rewritten:

"§ 62‑133.2.  Fuel and fuel‑related charge adjustments for electric utilities.

(a1)      As used in this section, "cost of fuel and fuel‑related costs" means all of the following:

(10)      The total delivered costs, including capacity and noncapacity costs, associated with all purchases of electric power from qualifying cogeneration facilities and qualifying small power production facilities, as defined in 16 U.S.C. § 796, that are not subject to economic dispatch or economic curtailment by the electric public utility and not otherwise recovered under subdivision (6) of this subsection.

(11)      The total delivered costs, including capacity and energy costs, or authorized revenues for renewable energy resources procured through the competitive renewable energy procurement process established in G.S. 62‑110.8, whether the resources are owned by an electric public utility or purchased from a third party.

(a2)      For those costs identified in subdivisions (4), (5), and (6) of subsection (a1) of this section, the annual increase in the aggregate amount of these costs that are recoverable by an electric public utility pursuant to this section shall not exceed two percent (2%) of the electric public utility's total North Carolina retail jurisdictional gross revenues for the preceding calendar year. The costs described in subdivisions (4), (5), and (6) of subsection (a1) of this section shall be recoverable from each class of customers as a separate component of the rider as follows:

(1)        For the noncapacity costs described in subdivision (4)subdivisions (4), (10), and (11) of subsection (a1) of this section, the specific component for each class of customers shall be determined by allocating these costs among customer classes based on the electric public utility's North Carolina energy usage for the prior year,method used in the electric public utility's most recently filed fuel proceeding commenced on or before January 1, 2017, as determined by the Commission, until the Commission determines how these costs shall be allocated in a general rate case for the electric public utility commenced on or after January 1, 2008.January 1, 2017.

(2)        For the capacity costs described in subdivisions (5) and (6)(5), (6), (10), and (11) of subsection (a1) of this section, the specific component for each class of customers shall be determined by allocating these costs among customer classes based on the electric public utility's North Carolina peak demand for the prior year, method used in the electric public utility's most recently filed fuel proceeding commenced on or before January 1, 2017, as determined by the Commission, until the Commission determines how these costs shall be allocated in a general rate case for the electric public utility commenced on or after January 1, 2008.January 1, 2017.

."

 

PART IV. EXPEDITED REVIEW OF INTERCONNECTION OF SWINE AND POULTRY WASTE

SECTION 4.  G.S. 62‑133.8 reads as rewritten:

"§ 62‑133.8.  Renewable Energy and Energy Efficiency Portfolio Standard (REPS).

(i)         Adoption of Rules. The Commission shall adopt rules to implement the provisions of this section. In developing rules, the Commission shall:

(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. The standards adopted pursuant to this subdivision shall include an expedited review process for swine and poultry waste to energy projects of two megawatts (2 MW) or less and other measures necessary and appropriate to achieve the objectives of subsections (e) and (f) of this section.

."

 

PART V. UPDATE UTILITIES COMMISSION CHARGES AND FEES

SECTION 5.(a)  G.S. 62‑133.8 reads as rewritten:

"§ 62‑133.8.  Renewable Energy and Energy Efficiency Portfolio Standard (REPS).

(l)         The owner, including an electric power supplier, of each renewable energy facility or new renewable energy facility, whether or not required to obtain a certificate of public convenience and necessity pursuant to G.S. 62‑110.1, that intends for renewable energy certificates it earns to be eligible for use by an electric power supplier to comply with G.S. 62‑133.8 shall register the facility with the Commission. Such an owner shall file a registration statement in the form prescribed by the Commission and remit to the Commission the fee required pursuant to G.S. 62‑300(a)(16)."

SECTION 5.(b)  G.S. 62‑300 reads as rewritten:

"§ 62‑300.  Particular fees and charges fixed; payment.

(a)        The Commission shall receive and collect the following fees and charges in accordance with the classification of utilities as provided in rules and regulations of the Commission, and no others:

(16)      Two hundred fifty dollars ($250.00) with each application for a certificate of authority to engage in business as a solar electric generator lessor filed pursuant to G.S. 62‑126.7 or each registration statement for a renewable energy facility or new renewable energy facility filed pursuant to G.S. 62‑133.8(l).

(17)      Fifty dollars ($50.00) for each report of proposed construction filed by the owner of an electric generating facility that is exempt from the certification requirements of G.S. 62‑110.1(a).

."

 

PART VI. DISTRIBUTED RESOURCES ACCESS ACT

SECTION 6.(a)  Chapter 62 of the General Statutes is amended by adding a new Article to read as follows:

"Article 6B.

"Distributed Resources Access Act.

"§ 62‑126. 1.  Title.

This act may be cited as the "Distributed Resources Access Act."

"§ 62‑126.2.  Declaration of Policy.

The General Assembly of North Carolina finds that as a matter of public policy it is in the interest of the State to encourage the leasing of solar energy facilities for retail customers. The General Assembly further finds and declares that in encouraging the leasing of and subscription to solar energy facilities pursuant to this act, cross‑subsidization should be avoided by holding harmless electric public utilities' customers that do not participate in such arrangements.

"§ 62‑126.3.  Definitions.

For purposes of this Article, the following definitions apply:

(1)        Affiliate. Any entity directly or indirectly controlling or controlled by or under direct or indirect common control with an electric power supplier.

(2)        Commission. The North Carolina Utilities Commission.

(3)        Community solar energy facility. A solar energy facility whose output is shared through subscriptions.

(4)        Customer generator lessee. A lessee of a solar energy facility.

(5)        Electric generator lessor. The owner of an eligible electric generation facility that leases the facility to a customer generator lessee, including any agents who act on behalf of the solar electric generator lessor. For purposes of this Article, an electric generator lessor shall not be considered a public utility under G.S. 62‑3(23).

(6)        Electric power supplier. A public utility, an electric membership corporation, or a municipality that sells electric power to retail electric customers in the State.

(7)        Electric public utility. A public utility as defined by G.S. 62‑3(23) that sells electric power to retail electric customers in the State.

(8)        Maximum annual peak demand. The maximum single hour of electric demand actually occurring or estimated to occur at a premises.

(9)        Net metering. To use electrical metering equipment to measure the difference between the electrical energy supplied to a retail electric customer by an electric power supplier and the electrical energy supplied by the retail electric customer to the electric power supplier over the applicable billing period.

(10)      Offering utility. Any electric public utility as defined in G.S. 62‑3(23) serving at least 150,000 North Carolina retail jurisdictional customers as of January 1, 2017. The term shall not include any other electric public utility, electric membership corporation, or municipal electric supplier authorized to provide retail electric service within the State. An offering utility's participation in this Article as an electric generator lessor shall not otherwise alter its status as a public utility with respect to any other provision of this Chapter. An offering utility's participation in this Article shall be regulated pursuant to the provisions of this Article.

(11)      Person. The same meaning as in G.S. 62‑3(21).

(12)      Premises. The building, structure, farm, or facility to which electricity is being or is to be furnished. Two or more buildings, structures, farms, or facilities that are located on one tract or contiguous tracts of land and that are utilized by one electric customer for commercial, industrial, institutional, or governmental purposes, shall constitute one "premises," unless the electric service to the building, structures, farms, or facilities are separately metered and charged.

(13)      Property. The tract of land on which the premises is located, together with all the adjacent contiguous tracts of land utilized by the same retail electric customer.

(14)      Solar energy facility. A solar energy facility leased to a customer generator lessee that meets the following requirements:

a.         Generates electricity from a solar photovoltaic system and related equipment that uses solar energy to generate electricity.

b.         Is limited to a capacity of: (i) not more than the lesser of one thousand kilowatts (1,000 kW) or one hundred percent (100%) of contract demand if a nonresidential customer; or (ii) not more than twenty kilowatts (20 kW) or one hundred percent (100%) of estimated electrical demand if a residential customer.

c.         Is located on a premises owned, operated, leased, or otherwise controlled by the customer generator lessee that is also the premises served by the solar energy facility.

d.         Is interconnected and operates in parallel phase and synchronization with an offering utility authorized by the Commission to provide retail electric service to the premises and has been approved for interconnection and parallel operation by that public utility.

e.         Is intended only to offset no more than one hundred percent (100%) of the customer generator lessee's own retail electrical energy consumption at the premises.

f.          Meets all applicable safety, performance, interconnection, and reliability standards established by the Commission, the public utility, the National Electrical Code, the National Electrical Safety Code, the Institute of Electrical and Electronics Engineers, Underwriters Laboratories, the Federal Energy Regulatory Commission, and any local governing authorities.

(15)      Subscription. A contract between a subscriber and the owner of a community solar energy facility that allows a subscriber to receive a bill credit for the electricity generated by a community solar energy facility in proportion to the electricity generated.

"§ 62‑126.4.  Commission to establish net metering rates.

(a)        Each electric public utility shall file for Commission approval revised net metering rates for electric customers that (i) own a renewable energy facility for that person's own primary use or (ii) are customer generator lessees.

(b)        The rates shall be nondiscriminatory and established only after an investigation of the costs and benefits of customer‑sited generation that shall include a consideration of the fixed costs of the electric system, including generation, transmission, and distribution costs, and the costs and benefits of renewable energy generation. The Commission shall establish net metering rates under all tariff designs that ensure that the net metering retail customer pays its full fixed cost of service. Such rates may include fixed monthly energy and demand charges.

(c)        Until the rates have been approved by the Commission, the rate shall be the applicable net metering rate established at the time the facility interconnects. Retail customers that own and install an on‑site renewable energy facility and interconnect to the grid prior to the date the Commission approves new metering rates may elect to continue net metering under the net metering rate in effect at the time of interconnection until January 1, 2027.

"§ 62‑126.5.  Scope of leasing program in offering utilities' service areas.

(a)        An offering utility and its affiliates may be deemed to be electric generator lessors and may offer leases to solar energy facilities only within the offering utility's own assigned service area or, in the case of an affiliate, the service area assigned to an affiliated offering utility. The costs an offering public utility incurs in marketing, installing, owning, or maintaining leases through its own leasing programs as a lessor shall not be recovered from other nonparticipating utility customers through rates and the Commission shall not have any jurisdiction over the financial terms of such leases. An offering utility, and the customer generator lessees that lease facilities from it, may participate on an equal basis with other lessors and lessees, and in any approved incentive program offered by the utility to its customers.

(b)        An electric generator lessor that owns a solar energy facility within the assigned service area of an offering utility and that is located on a premises owned or leased by a customer generator lessee, shall be permitted to lease such facility exclusively to a customer generator lessee under a lease, provided that the solar electric generator lessor complies with the terms, conditions, and restrictions set forth within this section and holds a valid certificate issued by the Commission pursuant to G.S. 62‑126.7. An electric generator lessor shall not be considered a "public utility" under G.S. 62‑3(23) if the solar energy facility is only made available to a customer generator lessee under a lease that conforms to the requirements of G.S. 62‑126.6 for the customer generator lessee's use on its premises where the solar energy facility is located to serve the electric energy requirements of that particular premises, including to enable the customer generator lessee to obtain a credit for the electricity generated under an applicable net metering tariff or to engage in the sale of excess energy from the solar energy facility to an offering utility.

(c)        Any lease of a solar energy facility not entered into pursuant to this section is prohibited, and any electric generator lessor that enters into a lease outside of an offering utility's program implemented pursuant to this section or otherwise enters into a contract or agreement where payments are based upon the electric output of a solar energy facility shall be considered a "public utility" under G.S. 62‑3(23), and be in violation of the franchised service rights of the offering utility or any other electric power supplier authorized to provide retail electric service in the State. This section does not authorize the sale of electricity from solar energy facilities directly to any customer of an offering utility or other electric power supplier by the owner of a solar energy facility. The electrical output from any solar energy facility leased pursuant to this program shall be the sole and exclusive property of the customer generator lessee.

(d)       The total installed capacity of all solar energy facilities on an offering utility's system that are leased pursuant to this section shall not exceed one percent (1.0%) of the previous five‑year average of the North Carolina retail contribution to the offering utility's coincident retail peak demand. The offering utility may refuse to interconnect customers that would result in this limitation being exceeded. Each offering utility shall establish a program for new installations of leased equipment to permit the reservation of capacity by customer generator lessees, whether participating in a public utility or non‑utility lessor's leasing program, on its system including provisions to prevent or discourage abuse of such programs. Such programs must provide that only prospective individual customer generator lessees may apply for, receive, and hold reservations to participate in the offering utility's leasing program. Each reservation shall be for a single customer premises only and may not be sold, exchanged, traded, or assigned except as part of the sale of the underlying premises.

(e)        To comply with the terms of this section, each customer generator lessee's solar energy facility shall serve only one premises, and shall not serve multiple customer generator lessees or multiple premises. The customer generator lessee must enroll in the applicable rate schedule made available by the interconnecting offering utility, subject to the participation limitations set forth in subsection (a) of this section.

"§ 62‑126.6.  Electric customer generator leasing requirements; disclosures; records.

(a)        A lease agreement offered by an electric generator lessor must meet the following requirements:

(1)        Be signed and dated by the retail electric customer. Any agreement that contains blank spaces when signed by the retail electric customer is voidable at the option of the retail electric customer until the solar energy facility is installed.

(2)        Be in at least 12‑point type.

(3)        Include a provision granting the retail electric customer the right to rescind the agreement for a period of not less than three business days after the agreement is signed by the retail electric customer.

(4)        Provide a description of the solar energy facility, including the make and model of the solar energy facility's major components, and a guarantee concerning energy production output that the solar energy facility will provide over the expected life of the agreement.

(5)        Separately set forth the following items, as applicable:

a.         The total cost to the retail electric customer under the lease agreement for the solar energy facility over the life of the agreement.

b.         Any interest, installation fees, document preparation fees, service fees, or other costs to be paid by the retail electric customer.

c.         The total number of payments, including the interest, the payment frequency, the estimated amount of the payment expressed in dollars, and the payment due date over the leased term.

(6)        Identify all current tax incentives and rebates or other State or federal incentives for which the buyer may be eligible and any conditions or requirements pursuant to the agreement to obtain these tax incentives, rebates, or other incentives.

(7)        Identify the tax obligations that the retail electric customer may be required to pay as a result of buying, financing, or leasing the solar energy facility, including:

a.         The assessed value and the property tax assessments associated with the solar energy facility, calculated in the year the agreement is signed.

b.         Transaction privilege taxes that may be assessed against the person leasing the solar energy facility.

c.         Any obligation of the retail electric customer to transfer tax credits or tax incentives of the solar energy facility to any other person.

(8)        Disclose whether the warranty or maintenance obligations related to the solar energy facility may be sold or transferred to a third party.

(9)        Include a disclosure, the receipt of which shall be separately acknowledged by the retail electric customer, if a transfer of the sale, lease, or financing agreement is subject to any restrictions pursuant to the agreement on the retail electric customer's ability to modify or transfer ownership of a solar energy facility, including whether any modification or transfer is subject to review or approval by a third party. If the modification or transfer of the solar energy facility is subject to review or approval by a third party, the agreement must identify the name, address, and telephone number of, and provide for updating any change in, the entity responsible for approving the modification or transfer.

(10)      Include a disclosure, the receipt of which shall be separately acknowledged by the retail electric customer, if a modification or transfer of ownership of the real property to which the solar energy facility is or will be affixed is subject to any restrictions pursuant to the agreement on the retail electric customer's ability to modify or transfer ownership of the real property to which the solar energy facility is installed or affixed, including whether any modification or transfer is subject to review or approval by a third party. If the modification or transfer of the real property to which the solar energy facility is affixed or installed is subject to review or approval by a third party, the agreement must identify the name, address, and telephone number of, and provide for updating any change in, the entity responsible for approving the modification or transfer.

(11)      Provide a full and accurate summary of the total costs under the agreement for maintaining and operating the solar energy facility over the life of the solar energy facility, including financing, maintenance, and construction costs related to the solar energy facility.

(12)      If the agreement contains an estimate of the retail electric customer's future utility charges based on projected utility rates after the installation of a solar energy facility, provide an estimate of the retail electric customer's estimated utility charges during the same period as impacted by potential utility rate changes ranging from at least a five‑percent (5%) annual decrease to at least a five‑percent (5%) annual increase from current utility costs. The comparative estimates must be calculated based on the same utility rates.

(13)      Include a disclosure, the receipt of which shall be separately acknowledged by the retail electric customer that states:

            "Utility rates and utility rate structures are subject to change. These changes cannot be accurately predicted and projected savings from your solar energy facility are therefore subject to change.  Tax incentives are subject to change or termination by executive, legislative, or regulatory action."

(b)        Before the maintenance or warranty obligations of a solar energy facility under an existing lease agreement are transferred, the person who is currently obligated to maintain or warrant the solar energy facility must disclose the name, address, and telephone number of the person who will be assuming the maintenance or warranty of the solar energy facility.

(c)        If the electric generator lessor's marketing materials contain an estimate of the retail electric customer's future utility charges based on projected utility rates after the installation of a solar energy facility, the marketing materials must contain an estimate of the retail electric customer's estimated utility charges during the same period as impacted by potential utility rate changes ranging from at least a five‑percent (5%) annual decrease to at least a five‑percent (5%) annual increase from current utility costs.

"§ 62‑126.7.  Commission authority over electric generator lessors.

(a)        No person shall engage in the leasing of a solar energy facility without having applied for and obtained a certificate authorizing those operations from the Commission. The application for a certificate of authority to engage in business as an electric generator lessor shall be made in a form prescribed by the Commission and accompanied by the fee required pursuant to G.S. 62‑300(16).

(b)        In acting upon the application for a certificate of authority to engage in business as an electric generator lessor, the Commission shall take into account the State's interest in encouraging the leasing of solar electric generation facilities and avoidance of cross‑subsidization as declared by the policy objectives of this Article as provided in G.S. 62‑126.2, as well as the policy of the State as provided in G.S. 62‑2(a). The Commission shall issue a certificate of authority to engage in business as an electric generator lessor, if the Commission finds that the applicant is fit, willing, and able to conduct that business in accordance with the provisions of this Article. The certificate shall be effective from the date issued unless otherwise specified therein, and shall remain in effect until terminated under the terms thereof, or until suspended or revoked as herein provided.

(c)        As a condition for issuance and continuation of a certificate of authority for an electric generator lessor, the applicant shall certify to the Commission all of the following:

(1)        The applicant will register with the Commission each solar energy facility that the applicant leases to a customer generator lessee.

(2)        That each lease of a solar energy facility that the applicant offers or accepts will comply with the provisions of this Article.

(3)        The applicant will consent to the auditing of its books and records by the Public Staff insofar as those records relate to transactions with an offering utility or a customer generator lessee that is located in the State.

(4)        That the applicant will conduct its business in substantial compliance with all federal and State laws, regulations, and rules for the protection of the environment and conservation of natural resources, the provision of electric service, and the protection of consumers.

(d)       Upon the request of a public utility, an electric membership corporation, the Public Staff, a customer generator lessee, or person having an interest in the solar electric generator lessor's conduct of its business, the Commission may review the certificate to determine whether the solar electric generator lessor is conducting business in compliance with this Article. After notice to the electric generator lessor, the Commission may suspend the certificate and enter upon a hearing to determine whether the certificate should be revoked. After the hearing, and for good cause shown, the Commission may, in its discretion, reinstate a suspended certificate, continue a suspension of a certificate, or revoke a certificate.

(e)        It shall be a violation of law punishable by a civil penalty of not more than ten thousand dollars ($10,000) per occurrence for any person to either directly or indirectly do any of the following:

(1)        Solicit business as a lessor of solar energy facilities without a valid certificate issued under this section or otherwise in violation of the terms of this Article.

(2)        Engage in any unfair or deceptive practice in the leasing of renewable electric generation facilities or otherwise violate the requirements of G.S. 62‑126.6.

(3)        Operate in violation of the terms of the certificate issued by this Article."

SECTION 6.(b)  G.S. 62‑3 reads as rewritten:

"§ 62‑3.  Definitions.

As used in this Chapter, unless the context otherwise requires, the term:

(23)      a.   "Public utility" means a person, whether organized under the laws of this State or under the laws of any other state or country, now or hereafter owning or operating in this State equipment or facilities for:

1.         Producing, generating, transmitting, delivering or furnishing electricity, piped gas, steam or any other like agency for the production of light, heat or power to or for the public for compensation; provided, however, that the term "public utility" shall not include persons who construct or operate an electric generating facility, the primary purpose of which facility is for such either for (i) a person's own use and not for the primary purpose of producing electricity, heat, or steam for sale to or for the public for compensation;compensation or (ii) a person who constructs or operates an eligible renewable energy facility on the site of a customer's property and leases such facility to that customer, as provided by and subject to the limitations of Article 6B of this Chapter;

."

SECTION 6.(c)  G.S. 62‑110.1(g) reads as rewritten:

"(g)      The certification requirements of this section shall not apply to (i) a nonutility‑owned generating facility fueled by renewable energy resources under two megawatts in capacity orcapacity; (ii) to persons who construct an electric generating facility primarily for that person's own use and not for the primary purpose of producing electricity, heat, or steam for sale to or for the public for compensation; or to (iii) a solar energy facility or a community solar energy facility, as provided by and subject to the limitations of Article 6B of this Chapter. provided, however, that such If the generating capacity of the facility exceeds twenty kilowatts, however, such persons shall, nevertheless, be required to shall report the proposed construction of such a facility to the Utilities Commission the proposed construction of such a facility before beginning construction thereof. construction and shall report completion of the facility to the Commission and the interconnecting electric public utility at the time construction is complete."

 

PART VII. ENERGY STORAGE STUDY

SECTION 7.  The North Carolina Policy Collaboratory (Collaboratory) at the University of North Carolina at Chapel Hill shall conduct a study on energy storage technology if contributions for the study of at least seventy‑five thousand dollars ($75,000) are identified and matched one‑to‑one in order to qualify for the challenge grant funds administered by the Office of State Budget and Management as provided in S.L. 2016‑94 (The Joint Conference Committee Report on the Base, Capital, and Expansion Budgets). If the Collaboratory no longer qualifies for those funds due to the expiration of the fiscal year, the Collaboratory may use additional funds appropriated to the Collaboratory on a nonrecurring basis up to seventy‑five thousand dollars ($75,000) if the funds are matched one‑to‑one in the 2017‑2018 fiscal year. The study shall address how energy storage technologies may or may not provide value to North Carolina consumers based on factors that may include, but are not limited to, capital investment, value to the electric grid, net utility savings, net job creation, impact on consumer rates and service quality, or any other factors related to deploying one or more of these technologies. The study shall also address the feasibility of energy storage in North Carolina, including, but not limited to, services energy storage can provide that are not being performed currently, the economic potential or impact of energy storage deployment in North Carolina, and the identification of existing policies and recommended policy changes that may be considered to address a statewide coordinated energy storage policy. The Collaboratory shall provide the results of this study no later than December 1, 2018, to the Energy Policy Council and the Joint Legislative Commission on Energy Policy.

 

PART VIII. SEVERABILITY CLAUSE AND EFFECTIVE DATE

SECTION 8.(a)  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of this act as a whole or any part other than the part declared to be unconstitutional or invalid.

SECTION 8.(b)  The headings to the parts of this act are a convenience to the reader and are for reference only. The headings do not expand, limit, or define the text of this act.

SECTION 8.(c)  This act is effective when it becomes law.

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