NC Utility Commission Approval of Green Source Advantage Program

Policy Details

Policy Details

Last Action
NCUC partially suspended program opening.
Date of Last Action
Oct 1 2019
Date Introduced
Aug 5 2019
Publication Date
Nov 6 2019
Date Made Public
Aug 5 2019

SciPol Summary

On August 5, 2019, the North Carolina Public Utilities Commissionapproved Duke Energy’s Green Source Advantage program. Duke developed the program in response to the 2017 North Carolina Competitive Energy Solutions Law(House Bill 589), a broad bill encouraging greater adoption of renewable energy in North Carolina. House Bill 589 requires each electric utility in the state providing retail electric service to more than 150,000 customers—in practice, only Duke Energy—to create a program through which it procures third-party renewable energy for its large customers from a new renewable energy facility of their choice.  

Prior to the passage of House Bill 589, North Carolina law prohibited third-party sales of electricityto retail customers, which meant that customers were unable to buy any renewable energy not sold by the monopoly electricity provider for their service area.  Now, Duke Energymust allow large customers to buy up to 600MW of renewable energy from third-party renewable providers. However, because 100 MW of this is set aside for military installations and 250 MW for University of North Carolina institutions, only 250MW in renewable capacity will be available to other large customers. 

Under the Green Source Advantage program, large customers—those with a contract demand of more than 1 MW—will be allowed to select and negotiate price terms and contract lengths with a renewable energy supplier of their choice. Their utility bills will reflect with the amount of renewable energy produced on their behalf, and they will be provided with Renewable Energy Certificates (REC) which they may use to prove their compliance with internal or external renewable energy goals, or trade with other companies seeking to do so. 

However, House Bill 589 and the GSA also limit each eligible customer to contracting for renewable power from facilities that at their peak produce just 125% of the customer’s maximum annual peak demand. To illustrate this, Duke University, which has an annual peak demand of about 81.6MW, will be limited to contracting for just the equivalent of a 100MW solar power plant. Because solar energy is intermittent, even that 100MW of solar would not be able to generate enough to meet Duke’s total demand around the clock.  According to a Duke University analysis of its power needs, a 100MW solar plant would only produce 150,000MWh annually while the university’s demand would be three times as much. The imposition of these caps will mean that large users who enroll in the GSA will still be dependent on Duke Energy for a sizeable portion of their energy needs.

Major consumers like Apple and Google, who operate data centers in the state, expressed discontent with the program in commentsfiled with the North Carolina Utilities Commission before its approval. They argued that the program should allow customers to source up to 100% renewable energy should they want to, rather than being subjected to arbitrary caps based on peak demand. 

Environmental advocates have expressed concerned that  the 250MW carve out means that the GSA will mean that total demand from large users for renewable energy in North Carolina will not be met. Apple, Google and Facebook alone have a combined estimated demand of over 200MW.  Add in Walmart, which purchases 500 million kWh for its 171 stores in North Carolina, or another 57MW of average demand, and the entire carve out is exceeded. In light of this, the North Carolina Sustainable Energy Association has stated that it is “not confidentthat the program approved by the Commission will sufficiently meet the needs of North Carolina businesses and solar developers.”  As of October 2019, the program was already oversubscribed

 

 

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