Bill Summary for H 589 (2017-2018)

Summary date: 

Jun 27 2017

Bill Information:

View NCGA Bill Details2017-2018 Session
House Bill 589 (Public) Filed Wednesday, April 5, 2017
AN ACT TO REFORM NORTH CAROLINA'S APPROACH TO INTEGRATION OF RENEWABLE ELECTRICITY GENERATION THROUGH AMENDMENT OF LAWS RELATED TO ENERGY POLICY AND TO ENACT THE DISTRIBUTED RESOURCES ACCESS ACT.
Intro. by Szoka, Arp, Watford.

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Bill summary

Senate committee substitute makes the following changes to the 3rd edition. 

Part I. Standard Contracts for Small Power Producers

Further amends GS 62-156 (Power sales by small power producers to public utilities). Makes conforming changes in subsection (a) to refer to an electric public utility throughout the subsection. Modifies subsection (b), concerning standard contracts for small power producer facilities up to 1,000 kW, providing that when an electric public utility has entered into power purchase agreements with small power producers from facilities (previously, with small power producer facilities) in the aggregate capacity of 100 MW or more (previously, with a total capacity of 100 MW or more) and which established a legally enforceable obligation after November 15, 2016, the eligibility threshold for that utility's standard offer must be reduced to 100 kW. Makes changes to refer to capacity purchased rather than avoided capacity purchased pertaining to the rates to be paid by electric public utilities for capacity purchased from a small power producer. Makes changes to proposed subsection (c), concerning rates to be paid by electric public utilities to small power producers not eligible for the utility's standard contract. Requires the utility to design rates consistent with the most recent Utilities Commission-approved avoided cost methodology for a fixed five-year term (the previous edition did not specify the most recently approved avoided cost methodology). Modifies and adds to the specified small power producers permitted to negotiate for a fixed-term contract that exceeds five years to include those that produce electric energy primarily (previously, solely) by the use of: (1) swine or poultry waste; (2) hydropower, so long as the hydroelectric power facility total capacity is equal to or less than 5 MW; or (3) landfill gas, manure digester gas, agricultural waste digester gas, sewage digester gas, or sewer sludge digester gas (the previous provision only provided for production by the use of swine or poultry waste).

Part II. Competitive Procurement of Renewable Energy

Amends proposed GS 62-110.8 (Competitive procurement of renewable energy), requiring each electric public utility to file for approval of the Utilities Commission (Commission) a program for the competitive procurement of energy and capacity from renewable energy facilities (previously, for the competitive procurement of new renewable energy resources). Clarifies that renewable energy facilities eligible to participate in the competitive procurement must include facilities that use renewable energy resources identified (previously, must include resources identified) in GS 62-133.8(a)(8), limited as previously described. Directs the electric public utilities to issue RFPs to procure energy and capacity from renewable energy facilities in the aggregate amount of 2,200 MW (previously, to procure new renewable energy resources in the aggregate amount of 2,660 MW), allocated over a 45-month term as previously described. Directs the Commission to require (previously, at minimum require) the additional competitive procurement of renewable energy capacity (previously, the additional competitive procurement of renewable energy) by the electric public utilities in an amount that meets the previously set forth criteria. Prohibits the Commission from approving a program for any additional competitive procurement of energy and capacity from renewable energy facilities unless authorized by the statute (previously, required the Commission to determine the offering of a new competitive procurement and the amount to be procured at the termination of the initial procurement period based on need). Permits electric public utilities to jointly or individually implement the aggregate competitive procurement requirements of subsection (a), and satisfy the requirements for the procurement of renewable energy capacity to be supplied by renewable energy facilities (previously, satisfy the requirements for the procurement of renewable resources) through any of the previously specified ways. Makes conforming and clarifying changes. Adds a new provision to the limitations set forth for procured renewable energy capacity, prohibiting compensation for curtailment from exceeding the market value of energy at the time of curtailment. 

Part VI. Disturbed Resources Access Act

Amends proposed GS 62-126.3, now defining the term electric generator lessor to mean the owner of a solar energy facility that leases the facility to a customer generator lessee (was, the owner of an eligible electric generation facility that leases the facility to a customer generator lessee). Now defines solar energy facility to mean an electric generating facility (previously, a solar energy facility) leased to a customer generator lessee that meets the requirements, as specified.

Amends proposed GS 62-126.5 (Scope of leasing program in offering utilities' services areas) to consistently reference an electric generator lessor throughout subsection (b).

Amends proposed GS 62-126.7 (Commission authority over electric generator lessors) to clarify that the Commission can review the certificate to determine whether the electric generator lessor is conducting business in compliance with the new Article upon the request of an electric public utility (previously, generally a public utility), among other specified interested parties. Makes conforming changes to refer to an electric generator lessor instead of a solar electric generator lessor.

Part X. Update Utilities Commission Charges and Fees

Makes conforming changes to proposed GS 62-300(a)(16) to refer to applications for a certificate to engage in business as an electric generator lessor, rather than a solar electric generator lessor. 

Part XI. Decommissioning of Utility Scale Solar Energy Facilities

New Part XI enacts GS 62-351. Requires the owner or operator of a utility-scale solar project, as defined, to decommission the project upon cessation of activities and reclaim the property to its condition prior to commencement of activities on the site, no later than one year following completion of the operations. Details three steps an owner or operator must take at a minimum in decommissioning a project. Requires owners or operators to establish financial assurance that will ensure that sufficient funds are available for decommissioning and reclamation, even if the owner or operator becomes insolvent or ceases to reside, be incorporated, do business, or maintain assets in the State. Authorizes various methods of financial assurance. Directs the Department of Environmental Quality (DEQ) to adopt rules establishing criteria to set the amount of required financial assurance, and provides requirements for the rules. Establishes that an owner or operator of a utility-scale solar project is responsible for properly recycling each solar panel used in the project at the end of the panel's useful life. Requires recycling requirements to be in compliance with environmentally sound management practices, and requires the owner or operator to conduct and document due diligence assessments of the recyclers with which it contracts.

Directs DEQ to adopt temporary rules to implement the requirements of new GS 62-351 no later than September 1, 2017, to remain in effect until the effective date permanent rules are adopted and effective. Applies to utility-scale solar projects for which construction is initiated on or after the date the act becomes law.

Part XIII. Moratorium on Permits for Wind Energy Facilities

Makes organizational changes to move the severability clause and effective date provisions to new Part XIV.

Establishes a moratorium on consideration of applications for a permit and on the issuance of permits for wind energy facilities and wind energy facility expansions in the State for the purpose of allowing the General Assembly to study the extent and scope of military operations in the State and to consider the impact of future wind energy facilities and energy infrastructure on military operations, training, and readiness. Specifically prohibits DEQ and the Coastal Resources Commission from considering a permit application or issuing a permit for a wind energy facility or wind energy facility expansion for the period beginning January 1, 2017, and ending on December 31, 2020. Provides that the moratorium does not prohibit the consideration of an application for or the issuance of a permit for a wind energy facility or wind energy expansion facility for: (1) facilities or facility expansions that received a written Determination of No Hazard to Air Navigation issued by the FAA on or before May 17, 2013 or (2) if the applicant can show that a completed application meeting the requirements of GS 143-215.119(a) was submitted to DEQ or the Coastal Resource Commission on or before January 1, 2017.

Directs the General Assembly to study the extent and scope of military operations in the State in order to create a suite of maps and other relevant data and documentation to be employed to communicate the temporal and spatial use of land-, air-, and water-based military operations, and to identify areas of the State both onshore and offshore where energy infrastructure and development poses a threat to, encroaches upon, or otherwise reduces operations, training capabilities, or readiness. Directs the Legislative Services Officer (LSO) to issue the  RFP on or before December 31, 2017, as specified to conduct the study and creation of the maps and other relevant data and documentation. Requires that a contract to award the RFP be executed on or before June 30, 2018. Details consultation requirements of the selected contractor, including the base commander, or the base commander's designee, of each military installation in the State. Requires the study and maps and relevant data to be completed and submitted to the LSO on or before June 30, 2019, in order to inform policy development during the 2019-20 General Assembly. 

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