§ 62-133.8. Renewable Energy and Energy Efficiency Portfolio Standard (REPS). - North Carolina Statutes

§ 62‑133.8.  RenewableEnergy and Energy Efficiency Portfolio Standard (REPS).

(a)        Definitions. – Asused in this section:

(1)        "Combined heatand power system" means a system that uses waste heat to produceelectricity or useful, measurable thermal or mechanical energy at a retailelectric customer's facility.

(2)        "Demand‑sidemanagement" means activities, programs, or initiatives undertaken by anelectric power supplier or its customers to shift the timing of electricity usefrom peak to nonpeak demand periods. "Demand‑side management"includes, but is not limited to, load management, electric system equipment andoperating controls, direct load control, and interruptible load.

(3)        "Electric powersupplier" means a public utility, an electric membership corporation, or amunicipality that sells electric power to retail electric power customers inthe State.

(4)        "Energyefficiency measure" means an equipment, physical, or program changeimplemented after January 1, 2007, that results in less energy used to performthe same function. "Energy efficiency measure" includes, but is notlimited to, energy produced from a combined heat and power system that usesnonrenewable energy resources. "Energy efficiency measure" does notinclude demand‑side management.

(5)        "New renewableenergy facility" means a renewable energy facility that either:

a.         Was placed intoservice on or after January 1, 2007.

b.         Delivers or hasdelivered electric power to an electric power supplier pursuant to a contractwith NC GreenPower Corporation that was entered into prior to January 1, 2007.

c.         Is a hydroelectricpower facility with a generation capacity of 10 megawatts or less that deliverselectric power to an electric power supplier.

(6)        "Renewableenergy certificate" means a tradable instrument that is equal to onemegawatt hour of electricity or equivalent energy supplied by a renewableenergy facility, new renewable energy facility, or reduced by implementation ofan energy efficiency measure that is used to track and verify compliance withthe requirements of this section as determined by the Commission. A"renewable energy certificate" does not include the related emissionreductions, including, but not limited to, reductions of sulfur dioxide, oxidesof nitrogen, mercury, or carbon dioxide.

(7)        "Renewableenergy facility" means a facility, other than a hydroelectric powerfacility with a generation capacity of more than 10 megawatts, that either:

a.         Generates electricpower by the use of a renewable energy resource.

b.         Generates useful,measurable combined heat and power derived from a renewable energy resource.

c.         Is a solar thermalenergy facility.

(8)        "Renewableenergy resource" means a solar electric, solar thermal, wind, hydropower,geothermal, or ocean current or wave energy resource; a biomass resource,including agricultural waste, animal waste, wood waste, spent pulping liquors,combustible residues, combustible liquids, combustible gases, energy crops, orlandfill methane; waste heat derived from a renewable energy resource and usedto produce electricity or useful, measurable thermal energy at a retailelectric customer's facility; or hydrogen derived from a renewable energyresource. "Renewable energy resource" does not include peat, a fossilfuel, or nuclear energy resource.

(b)        Renewable Energyand Energy Efficiency Standards (REPS) for Electric Public Utilities. –

(1)        Each electric publicutility in the State shall be subject to a Renewable Energy and EnergyEfficiency Portfolio Standard (REPS) according to the following schedule:

Calendar Year                             REPSRequirement

2012                                          3% of2011 North Carolina retail sales

2015                                          6% of 2014North Carolina retail sales

2018                                          10% of 2017North Carolina retail sales

2021 and thereafter                    12.5% of 2020North Carolina retail sales

(2)        An electric public utilitymay meet the requirements of this section by any one or more of the following:

a.         Generate electricpower at a new renewable energy facility.

b.         Use a renewableenergy resource to generate electric power at a generating facility other thanthe generation of electric power from waste heat derived from the combustion offossil fuel.

c.         Reduce energyconsumption through the implementation of an energy efficiency measure;provided, however, an electric public utility subject to the provisions of thissubsection may meet up to twenty‑five percent (25%) of the requirementsof this section through savings due to implementation of energy efficiencymeasures. Beginning in calendar year 2021 and each year thereafter, an electricpublic utility may meet up to forty percent (40%) of the requirements of thissection through savings due to implementation of energy efficiency measures.

d.         Purchase electricpower from a new renewable energy facility. Electric power purchased from a newrenewable energy facility located outside the geographic boundaries of theState shall meet the requirements of this section if the electric power isdelivered to a public utility that provides electric power to retail electriccustomers in the State; provided, however, the electric public utility shallnot sell the renewable energy certificates created pursuant to this paragraphto another electric public utility.

e.         Purchase renewableenergy certificates derived from in‑State or out‑of‑state newrenewable energy facilities. Certificates derived from out‑of‑statenew renewable energy facilities shall not be used to meet more than twenty‑fivepercent (25%) of the requirements of this section, provided that thislimitation shall not apply to an electric public utility with less than 150,000North Carolina retail jurisdictional customers as of  December 31, 2006.

f.          Use electric powerthat is supplied by a new renewable energy facility or saved due to theimplementation of an energy efficiency measure that exceeds the requirements ofthis section for any calendar year as a credit towards the requirements of thissection in the following calendar year or sell the associated renewable energycertificates.

(c)        Renewable Energyand Energy Efficiency Standards (REPS) for Electric Membership Corporations andMunicipalities. –

(1)        Each electricmembership corporation or municipality that sells electric power to retailelectric power customers in the State shall be subject to a Renewable Energyand Energy Efficiency Portfolio Standard (REPS) according to the followingschedule:

Calendar Year                             REPSRequirement

                                  2012                                           3%of 2011 North Carolina retail sales

                                  2015                                           6%of 2014 North Carolina retail sales

                                  2018and thereafter                     10% of 2017 North Carolina retail sales

(2)        An electricmembership corporation or municipality may meet the requirements of thissection by any one or more of the following:

a.         Generate electricpower at a new renewable energy facility.

b.         Reduce energyconsumption through the implementation of demand‑side management orenergy efficiency measures.

c.         Purchase electricpower from a renewable energy facility or a hydroelectric power facility,provided that no more than thirty percent (30%) of the requirements of thissection may be met with hydroelectric power, including allocations made by theSoutheastern Power Administration.

d.         Purchase renewableenergy certificates derived from in‑State or out‑of‑staterenewable energy facilities. An electric power supplier subject to therequirements of this subsection may use certificates derived from out‑of‑staterenewable energy facilities to meet no more than twenty‑five percent(25%) of the requirements of this section.

e.         Acquire all or partof its electric power through a wholesale purchase power agreement with awholesale supplier of electric power whose portfolio of supply and demandoptions meets the requirements of this section.

f.          Use electric powerthat is supplied by a new renewable energy facility or saved due to theimplementation of demand‑side management or energy efficiency measuresthat exceeds the requirements of this section for any calendar year as a credittowards the requirements of this section in the following calendar year or sellthe associated renewable energy certificates.

(d)        Compliance WithREPS Requirement Through Use of Solar Energy Resources. – For calendar year2018 and for each calendar year thereafter, at least two‑tenths of onepercent (0.2%) of the total electric power in kilowatt hours sold to retailelectric customers in the State, or an equivalent amount of energy, shall besupplied by a combination of new solar electric facilities and new meteredsolar thermal energy facilities that use one or more of the followingapplications: solar hot water, solar absorption cooling, solardehumidification, solar thermally driven refrigeration, and solar industrialprocess heat. The terms of any contract entered into between an electric powersupplier and a new solar electric facility or new metered solar thermal energyfacility shall be of sufficient length to stimulate development of solarenergy; provided, the Commission shall develop a procedure to determine if anelectric power supplier is in compliance with the provisions of this subsectionif a new solar electric facility or a new metered solar thermal energy facilityfails to meet the terms of its contract with the electric power supplier. Asused in this subsection, "new" means a facility that was first placedinto service on or after January 1, 2007. The electric power suppliers shallcomply with the requirements of this subsection according to the followingschedule:

                                                                                  Requirementfor Solar

CalendarYear                                                             EnergyResources

                    2010                                                                               0.02%

                    2012                                                                               0.07%

                    2015                                                                               0.14%

                    2018                                                                               0.20%

(e)        Compliance WithREPS Requirement Through Use of Swine Waste Resources. – For calendar year 2018and for each calendar year thereafter, at least two‑tenths of one percent(0.2%) of the total electric power in kilowatt hours sold to retail electriccustomers in the State shall be supplied, or contracted for supply in eachyear, by swine waste. The electric power suppliers, in the aggregate, shallcomply with the requirements of this subsection according to the followingschedule:

                                                                                 Requirementfor Swine

CalendarYear                                                             WasteResources

                    2012                                                                               0.07%

                    2015                                                                               0.14%

                    2018                                                                               0.20%

 (f)        Compliance WithREPS Requirement Through Use of Poultry Waste Resources. – For calendar year2014 and for each calendar year thereafter, at least 900,000 megawatt hours ofthe total electric power sold to retail electric customers in the State shallbe supplied, or contracted for supply in each year, by poultry waste combinedwith wood shavings, straw, rice hulls, or other bedding material. The electricpower suppliers, in the aggregate, shall comply with the requirements of thissubsection according to the following schedule:

                                                                                Requirementfor Poultry

CalendarYear                                                             WasteResources

                    2012                                                                 170,000megawatt hours

                    2013                                                                 700,000megawatt hours

                    2014                                                                 900,000megawatt hours

(g)        Control ofEmissions. – As used in this subsection, Best Available Control Technology(BACT) means an emissions limitation based on the maximum degree a reduction inthe emission of air pollutants that is achievable for a facility, taking intoaccount energy, environmental, and economic impacts and other costs. A biomasscombustion process at any new renewable energy facility that delivers electricpower to an electric power supplier shall meet BACT. The EnvironmentalManagement Commission shall determine on a case‑by‑case basis theBACT for a facility that would not otherwise be required to comply with BACTpursuant to the Prevention of Significant Deterioration (PSD) emissionsprogram. The Environmental Management Commission may adopt rules to implementthis subsection. In adopting rules, the Environmental Management Commissionshall take into account cumulative and secondary impacts associated with theconcentration of biomass facilities in close proximity to one another. Inadopting rules the Environmental Management Commission shall provide for themanner in which a facility that would not otherwise be required to comply with BACTpursuant to the PSD emissions programs shall meet the BACT requirement.

(h)        Cost Recovery andCustomer Charges. –

(1)        For the purposes ofthis subsection, the term "incremental costs" means all reasonableand prudent costs incurred by an electric power supplier to:

a.         Comply with therequirements of subsections (b), (c), (d), (e), and (f) of this section thatare in excess of the electric power supplier's avoided costs other than thosecosts recovered pursuant to G.S. 62‑133.9.

b.         Fund research thatencourages the development of renewable energy, energy efficiency, or improvedair quality, provided those costs do not exceed one million dollars($1,000,000) per year.

c.         Comply with anyfederal mandate that is similar to the requirements of subsections (b), (c),(d), (e), and (f) of this section that exceed the costs that the electric powersupplier would have incurred under those subsections in the absence of thefederal mandate.

(2)        All reasonable andprudent costs incurred by an electric power supplier to comply with any federalmandate that is similar to the requirements of subsections (b), (c), (d), (e),and (f) of this section, including, but not limited to, the avoided costsassociated with a federal mandate that exceeds the avoided costs that the electricpower supplier would have incurred pursuant to subsections (b), (c), (d), (e),and (f) of this section in the absence of the federal mandate, shall berecovered by the electric power supplier in an annual rider charge assessed inaccordance with the schedule set out in subdivision (4) of this subsectionincreased by the Commission on a pro rata basis to allow for full and completerecovery of all reasonable and prudent costs incurred to comply with thefederal mandate.

(3)        Except as providedin subdivision (2) of this subsection, the total annual incremental cost to beincurred by an electric power supplier and recovered from the electric powersupplier's retail customers shall not exceed an amount equal to the per‑accountannual charges set out in subdivision (4) of this subsection applied to theelectric power supplier's total number of customer accounts determined as ofDecember 31 of the previous calendar year. An electric power supplier shall beconclusively deemed to be in compliance with the requirements of subsections(b), (c), (d), (e), and (f) of this section if the electric power supplier'stotal annual incremental costs incurred equals an amount equal to the per‑accountannual charges set out in subdivision (4) of this subsection applied to theelectric power supplier's total number of customer accounts determined as ofDecember 31 of the previous calendar year. The total annual incremental costrecoverable by an electric power supplier from an individual customer shall notexceed the per‑account charges set out in subdivision (4) of thissubsection except as these charges may be adjusted in subdivision (2) of thissubsection.

(4)        An electric powersupplier shall be allowed to recover the incremental costs incurred to complywith the requirements of subsections (b), (c), (d), (e), and (f) of thissection and fund research as provided in subdivision (1) of this subsectionthrough an annual rider not to exceed the following per‑account annualcharges:

                                                                                                         2015and

CustomerClass                     2008‑2011           2012‑2014           thereafter

Residentialper account                 $10.00                  $12.00                  $34.00

Commercialper account               $50.00                $150.00                $150.00

Industrialper account                 $500.00             $1,000.00             $1,000.00

(5)        The Commission shalladopt rules to establish a procedure for the annual assessment of the per‑accountcharges set out in this subsection to an electric public utility's customers toallow for timely recovery of all reasonable and prudent costs of compliancewith the requirements of subsections (b), (c), (d), (e), and (f) of thissection and to fund research as provided in subdivision (1) of this subsection.The Commission shall ensure that the costs to be recovered from individualcustomers on a per‑account basis pursuant to subdivisions (2) and (3) ofthis subsection are in the same proportion as the per‑account annualcharges for each customer class set out in subdivision (4) of this subsection.

(i)         Adoption of Rules.– The Commission shall adopt rules to implement the provisions of this section.In developing rules, the Commission shall:

(1)        Provide for themonitoring of compliance with and enforcement of the requirements of thissection.

(2)        Include a procedureto modify or delay the provisions of subsections (b), (c), (d), (e), and (f) ofthis section in whole or in part if the Commission determines that it is in thepublic interest to do so. The procedure adopted pursuant to this subdivisionshall include a requirement that the electric power supplier demonstrate thatit made a reasonable effort to meet the requirements set out in this section.

(3)        Ensure that energycredited toward compliance with the provisions of this section not be creditedtoward any other purpose, including another renewable energy portfolio standardor voluntary renewable energy purchase program in this State or any other state.

(4)        Establish standardsfor interconnection of renewable energy facilities and other nonutility‑ownedgeneration with a generation capacity of 10 megawatts or less to an electricpublic utility's distribution system; provided, however, that the Commissionshall adopt, if appropriate, federal interconnection standards.

(5)        Ensure that theowner and operator of each renewable energy facility that delivers electricpower to an electric power supplier is in substantial compliance with allfederal and state laws, regulations, and rules for the protection of theenvironment and conservation of natural resources.

(6)        Consider whether itis in the public interest to adopt rules for electric public utilities for netmetering of renewable energy facilities with a generation capacity of onemegawatt or less.

(7)        Develop proceduresto track and account for renewable energy certificates, including ownership ofrenewable energy certificates that are derived from a customer owned renewableenergy facility as a result of any action by a customer of an electric powersupplier that is independent of a program sponsored by the electric powersupplier.

(j)         Report. – No laterthan October 1 of each year, the Commission shall submit a report on theactivities taken by the Commission to implement, and by electric powersuppliers to comply with, the requirements of this section to the Governor, theEnvironmental Review Commission, and the Joint Legislative Utility ReviewCommittee. The report shall include any public comments received regardingdirect, secondary, and cumulative environmental impacts of the implementationof the requirements of this section. In developing the report, the Commissionshall consult with the Department of Environment and Natural Resources.

(k)        Tracking ofRenewable Energy Certificates. – No later than July 1, 2010, the Commissionshall develop, implement, and maintain an Internet Web site for the onlinetracking of renewable energy certificates in order to verify the compliance ofelectric power suppliers with the REPS requirements of this section and tofacilitate the establishment of a market for the purchase and sale of renewableenergy certificates.  (2007‑397, s. 2(a); 2009‑475, s. 14(a).)