House Bill 681 760 332: A Solution Looking For A Problem
Freeze of the Renewable Energy and Energy Efficiency Portfolio Standard (REPS) at 6%
(Page 3, line 43 through Page 5, line 10)
This freeze is based on the false premise that renewable energy and energy efficiency hurts
ratepayers. A recent study published by RTI International and ScottMadden Consultants shows
that the REPS has saved ratepayers $162 million since it was adopted and will save ratepayers an
additional $489 million by 2029. The bill also allows energy efficiency to meet 50% of a utility’s
REPS requirement instead of 25%.
Changes the Rules for Small Power Producers
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With the exception of projects generating energy from swine and poultry waste, qualifying
facilities over 100kW in size will be ineligible for a standard contract. This change nullifies an
order made by the Utilities Commission in December 2014 after a year of study. The Utilities
Commission concluded that the 5 MW threshold should be maintained because it had resulted in
widespread renewable energy development without adverse impacts to ratepayers.
As stated on page 22 of the NC Utilities Commission’s order for Docket No. E-100, Sub 140:
The Commission finds it is appropriate to retain the five MW threshold and 15-year maximum term length. The
Commission concludes that DEC, DEP and DNCP should continue to offer long-term levelized capacity payments and
energy payments for five-year, ten-year and 15-year periods as standard options to (a) hydroelectric QFs owned or
operated by SPPs contracting to sell five MW or less capacity and (b) non-hydroelectric QFs fueled by trash or methane
derived from landfills or hog waste, solar, wind, and non-animal forms of biomass contracting to sell five MW or less
capacity.
Producers Not Paid Fair Share
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The bill significantly reduces capacity payments in years where the utilities' long range plans do
not call for additional capacity to be built. The result is that qualifying facilities will not be paid
the utilities’ full avoided costs, as required by federal law. The Public Staff of the Utilities
Commission, charged with the interests of consumers before the Utilities Commission, recently
found that reducing capacity payments would be inappropriate given how utilities calculate longterm capacity costs.
The Public Staff filed the following proposal that the Commission later incorporated into its final order for Docket No. E100, Sub 140:
Using the peaker method, it is inappropriate to include zeroes for the early years when calculating avoided capacity
rates (pg. 24). Given that the Commission has concluded that it is appropriate to continue to use the peaker method, it
must reject the utilities’ proposals to include zeroes in the early years of the planning horizon. In order for the peaker
method to produce the long-run marginal costs of adding new capacity over the entire planning horizon, as it undeniably
is supposed to do, all of the costs of future new capacity have to be included (pg. 113).
House Bill 332 becoming law would result in:
1. Loss of investments and jobs
2. Lost opportunity for significant additional savings, ending consistent savings since
2008
3. Loss of limited free market forces within the regulated monopoly electric utility
framework