NC Utilities Commission won’t change way solar payments calculated
The N.C. Utilities Commission has decided not to change the way electric utilities calculate payments to independent energy developers for solar power and other renewables.
Duke Energy and other North Carolina utilities say the current cost calculator results in overpayments to solar farms, but the Utilities Commission’s rejection of that argument means renewable developers here will remain on stable footing financially for now.
The renewables industry had argued that if the utilities had prevailed, North Carolina’s solar industry and other green energy projects would have come to a standstill. In just several years North Carolina has leaped to third place nationally for electricity generated from solar power.
The Utilities Commission’s 67-page order, issued last week, covers a variety of calculations and technical issues. Undergirding North Carolina’s policies is a federal law, the Public Utility Regulatory Policies Act of 1978, that requires electric utilities to buy power from independent generators that meet certain qualifications.
But the amount utilities pay the independents for power is up to individual states. North Carolina uses a method called “avoided cost,” which is the cost utilities avoid by not having to generate their own power or buy power from other utilities.
The Utilities Commission has established 5 megawatts as the cutoff point for standard contracts and rates that don’t have to be negotiated in great detail.
The utilities had asked to reduce the cutoff size to 100 kilowatts, which would have forced most solar farm developers to negotiate custom contracts. The renewables industry asked to expand the cutoff to 10 megawatt facilities.
The Utilities Commission noted that very few contracts have been brokered for facilities larger than 5 megawatts, and said that the renewables industry has thrived under the current policy.
The Utilities Commission also rejected a request from the renewables lobby to create a special cost calculator for the solar industry that would award solar farms additional credit for the environmental and social benefits they provide.
Likewise, the Utilities Commission rejected a request from the utilities to include the costs of integrating solar farms into the grid when they pay solar farms for electricity. Utilities contended that connecting solar farms includes additional costs that should be subtracted from their power fees.
This story was originally published January 6, 2015 at 4:48 PM with the headline "NC Utilities Commission won’t change way solar payments calculated."