Bill Text: NC S365 | 2013-2014 | Regular Session | Amended
Bill Title: Affordable and Reliable Energy Act
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-05-01 - Re-ref Com On Commerce [S365 Detail]
Download: North_Carolina-2013-S365-Amended.html
GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2013
S 1
SENATE BILL 365*
Short Title: Affordable and Reliable Energy Act. |
(Public) |
|
Sponsors: |
Senator Brock (Primary Sponsor). |
|
Referred to: |
Rules and Operations of the Senate. |
|
March 20, 2013
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.