SOUND ENERGY & RENEWABLES POLICY ACT.

View NCGA Bill Details2017-2018 Session
House Bill 909 (Public) Filed Tuesday, April 25, 2017
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.
Intro. by Arp, J. Bell, Dixon.

Status: Re-ref to the Com on Energy and Public Utilities, if favorable, Finance, if favorable, Appropriations (House Action) (Apr 26 2017)
H 909

Bill Summaries:

  • Summary date: Apr 26 2017 - More information

    Part 1.

    Amends GS 62-3, amending the definition ofsmall power producer.

    Amends GS 62-156 (Power sales by small power producers to public utilities). When an electric utility and small power producer cannot agree to a contract or price for sale of electricity, the Utilities Commission (Commission) must require the utility to purchase the power at rates and terms under this statute as of the earlier of 180 days before the date a small power producer is capable of delivering power to the utility, or the date the small power producer is ready, willing, and able to commit to sell power to the utility and obligates itself to the utility. Directs the Commission to determine, every two years, the standard contract avoided cost to be included within the tariffs of the electric utility and paid by utilities for power purchased from small power producers with design capacity of 100kW or less (currently does not specify design capacity). Amends the existing standards that the Commission must follow in determining the standard contract avoided cost rates, limiting long-term contracts to 10 years and specifying when a future capacity need may be avoided. Directs that rates paid to small power producers with design capacity over 100kW shall be established through good-faith negotiations between the utility and the small power producer, and provides guidance for establishing purchase rates. Provides that utilities are not required to contract with or purchase power from a small power producer if the utility's obligation to purchase from the small power producer has been terminated under federal law.

    Part 1 applies to any standard contract rates approved by the 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 2.

    Enacts new GS 62-110.8. Directs electric utilities to file with the Commission a process for the annual competitive procurement of electricity from new renewable energy facilities, for approval by the Commission. Specifies which renewable energy resources are eligible to participate in the competitive procurement. Directs electric utilities to issue requests for proposals to procure renewable energy in specified amounts. Authorizes electric utilities to jointly or individually implement the aggregate competitive procurement requirements, including owning renewable energy facilities, or procuring energy from third-party renewable energy facilities. Provides four limitations for procured renewable capacity, including required procurement levels from facilities which produce electricity derived from swine waste, poultry waste, or landfill gas. Provides that electric utilities under this statute may determine the location and amount of annual procurement within their respective balancing authority areas, with consideration of diversification of renewable energy siting, efficiency and reliability, and potential for increased cost. Requires the competitive renewable energy procurement requirements to be independently monitored by a third-party evaluator. Authorizes electric utilities to participate in any annual competitive procurement process, within its assigned service territory. Authorizes electric public utilities to recover the costs of all purchases from third-party renewable energy resources and authorized revenue of any utility-owned assets procured under this statute through an annual rider approved by the Commission and reviewed annually. Authorizes the Commission to adopt rules to implement the requirements of this statute, as specified. This statute does not apply to electric utilities serving fewer than 150,000 North Carolina retail jurisdictional customers as of January 1, 2017.

    Amends GS 62-153(b) to provide that that subsection (prohibiting public utilities from paying fees, commissions, or compensation to certain companies) does not apply to power purchase agreements entered into under GS 62-133.8.

    Directs the competitive renewable energy procurement process required by GS 62-110.8 to be filed with the Commission no later than 180 days after Part 2 becomes effective.

    Part 3.

    Amends GS 62-133.2, amending the definition ofcost of fuel and fuel-related costs to include costs associated with purchases of electric power from qualifying cogeneration facilities, as specified, and those associated with renewable energy resources procured under GS 62-110.8. Allocates the recoverability of noncapacity and capacity costs according to the method used in the electric public utility's most recently filed fuel proceeding commenced on or before January 1, 2017.

    Part 4.

    Amends GS 62-133.8 (Renewable Energy and Energy Efficiency Portfolio Standard). Requires standards adopted by the Commission for interconnection of renewable energy facilities to include an expedited review process for swine and poultry waste to energy projects of 2MW or less.

    Part 5.

    Amends GS 62-133.8 to require owners of renewable energy facilities or new renewable energy facilities that intend for renewable energy certificates it earns to be eligible for use by an electric power supplier to register the facility with the Commission.

    Amends GS 62-300, adding Commission filing fees for applications for a certificate of authority to engage in business as a solar electric generator lessor or for registration statements, and for reports of proposed construction.

    Part 6.

    Enacts new GS Chapter 62, Article 6B (Distributed Resources Access Act).

    New GS 62-126.1 titles the Act.

    New GS 62-126.2 states that public policy encourages the leasing of solar energy facilities for retail customers, and holding harmless electric public utilities' customers that do not participate in such arrangements.

    New GS-126.3 defines 15 terms as used in the new Article.

    New GS 62-126.4 requires each electric public utility to file for Commission approval revised net metering rates for electric customers that own renewable energy facilities for their primary use, or are customer generator lessees (as defined). Requires rates to be nondiscriminatory and established only after investigation of the costs and benefits of customer-sited generation. Directs the Commission to establish net metering rates under all tariff designs, as specified. Provides for a metering rate that applies until rates are approved by the Commission. Authorizes 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 to continue net metering under the net metering rate at the time of interconnection until January 1, 2027.

    New GS 62-126.5 authorizes an offering utility (as defined) and its affiliates to be deemed electric generator lessors within the utility's own assigned service area, or the service area assigned to an affiliated offering utility. Prohibits recovering costs in marketing, installing, owning, or maintaining leases from other nonparticipating utility customers. Provides that the Commission has no jurisdiction over the financial terms of such leases. Authorizes offering utilities and customer generator lessees to participate on an equal basis with other lessors and lessees, and in any approved incentive program offered by the utility to its customers. Authorizes an electric generator lessor that owns a solar energy facility within an offering utility's assigned service area that is located on a premises owned or leased by a customer generator lessee to lease that facility exclusively to a customer generator lessee under a lease, provided that the solar electric generator lessor complies with the terms, conditions, and restrictions under this statute and holds a valid certificate. Provides that an electric generator lessor is not considered a public utility if the solar energy facility is provided under a lease for the customer generator lessee's use on its premises. Prohibits lease of solar energy facilities other than under this statute, and provides that doing so deems the electric generator lessor a public utility 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. 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. Provides that electrical output from any solar energy facility leased under this program is the sole property of the customer generator lessee. Limits the total installed capacity of all solar energy facilities on an offering utility's system leased under this statute to 1% of the previous five-year average of the NC retail contribution to the offering utility's coincident retail peak demand. Authorizes the offering utility to refuse to interconnect customers if that would result in exceeding the limitation. Directs offering utilities to establish a program for new installations of leased equipment to permit the reservation of capacity by customer generator lessees. Provides requirements for the program. Requires customer generator lessees' solar energy facilities to only serve one premises, and not serve multiple customer generator lessees or multiple premises.

    New GS 62-126.6 provides 13 requirements for the form and content of a lease agreement offered by an electric generator lessor, including that it must be signed and dated by the retail electric customer. Requires the person currently obligated to maintain or warrant a leased solar energy facility to disclose the name, address, and telephone number of a person who will be assuming the maintenance or warranty of a solar energy facility, prior to transferring those obligations. Provides requirements for an electric generator lessor's marketing materials concerning estimated retail electric customer's future utility charges.

    New GS 62-126.7 prohibits a person from engaging in the leasing of a solar energy facility without having applied for and obtained a certificate authorizing those operations from the Commission. Directs the Commission, in acting upon an application for a certificate to engage in business as an electric generator lessor, to take into account the stated policy in GS 62-126.2, as well as the policy in GS 62-2(a). Directs the Commission to issue a certificate of authority to engage in business as an electric generator lessor to applicants that the Commission finds are fit, willing, and able to conduct that business in accordance with this Article. Requires an applicant to certify four things to the Commission, including that the applicant will register each leased solar energy facility with the Commission. Authorizes the Commission, upon request of listed individuals or entities, to review the certificate to determine whether the solar electric generator lessor is conducting business in compliance with this Article, and after notice, suspend the certificate and enter upon a hearing to determine whether the certificate should be revoked. Authorizes the Commission, after hearing and for good cause shown, to reinstate, continue a suspension of, or revoke a certificate. Establishes a civil penalty of up to $10,000 per occurrence for any person to solicit business as a lessor of solar energy facilities without a valid certificate, engage in unfair or deceptive practices in the leasing of renewable electric generation facilities, or operate in violation of the terms of the issued certificate.

    Amends GS 62-3 to amend the definition ofpublic utility.

    Amends GS 62-110.1 to provide that the certification requirements of that statute do not apply to a solar energy facility or community solar energy facility subject to the limitations of GS Chapter 62, Article 6B, unless the facility's generating capaicty exceeds 20kW, at which point the facility must report the proposed construction, completed construction, and interconnection of the facility, at specified times.

    Part 7.

    Directs the North Carolina Policy Collaboratory to study, if funded as specified, energy storage technology, and to report its results by December 1, 2018, to the Energy Policy Council and the Joint Legislative Commission on Energy Policy. Provides requirements for the study.

    Part 8.

    Includes a severability clause and clarifies that Part headings are for reference only.

    The bill is effective when it becomes law.


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