§ 62-133.9. Cost recovery for demand-side management and energy efficiency measures. - North Carolina Statutes

§ 62‑133.9.  Costrecovery for demand‑side management and energy efficiency measures.

(a)        The definitions setout in G.S. 62‑133.8 apply to this section. As used in this section,"new," used in connection with demand‑side management or energyefficiency measure, means a demand‑side management or energy efficiencymeasure that is adopted and implemented on or after January 1, 2007, includingsubsequent changes and modifications.

(b)        Each electric powersupplier shall implement demand‑side management and energy efficiencymeasures and use supply‑side resources to establish the least cost mix ofdemand reduction and generation measures that meet the electricity needs of itscustomers. An electric membership corporation or municipality that qualifies asan electric power supplier may satisfy the requirements of this section throughits purchases from a wholesale supplier of electric power that uses supply‑sideresources and demand‑side management to meet all or a portion of thesupply needs of its members and their retail customers, and that, byaggregating and promoting demand‑side management and energy efficiencymeasures for its members, meets the requirements of this section.

(c)        Each electric powersupplier to which G.S. 62‑110.1 applies shall include an assessment ofdemand‑side management and energy efficiency in its resource planssubmitted to the Commission and shall submit cost‑effective demand‑sidemanagement and energy efficiency options that require incentives to theCommission for approval.

(d)        The Commissionshall, upon petition of an electric public utility, approve an annual rider tothe electric public utility's rates to recover all reasonable and prudent costsincurred for adoption and implementation of new demand‑side managementand new energy efficiency measures. Recoverable costs include, but are notlimited to, all capital costs, including cost of capital and depreciationexpenses, administrative costs, implementation costs, incentive payments toprogram participants, and operating costs. In determining the amount of anyrider, the Commission:

(1)        Shall allow electricpublic utilities to capitalize all or a portion of those costs to the extentthat those costs are intended to produce future benefits.

(2)        May approve otherincentives to electric public utilities for adopting and implementing newdemand‑side management and energy efficiency measures. Allowableincentives may include:

a.         Appropriate rewardsbased on the sharing of savings achieved by the demand‑side managementand energy efficiency measures.

b.         Appropriate rewardsbased on capitalization of a percentage of avoided costs achieved by demand‑sidemanagement and energy efficiency measures.

c.         Any other incentivesthat the Commission determines to be appropriate.

(e)        The Commissionshall determine the appropriate assignment of costs of new demand‑sidemanagement and energy efficiency measures for electric public utilities andshall assign the costs of the programs only to the class or classes ofcustomers that directly benefit from the programs.

(f)         None of the costsof new demand‑side management or energy efficiency measures of anelectric power supplier shall be assigned to any industrial customer thatnotifies the industrial customer's electric power supplier that, at theindustrial customer's own expense, the industrial customer has implemented atany time in the past or, in accordance with stated, quantified goals for demand‑sidemanagement and energy efficiency, will implement alternative demand‑sidemanagement and energy efficiency measures and that the industrial customerelects not to participate in demand‑side management or energy efficiencymeasures under this section. The electric power supplier that provides electricservice to the industrial customer, an industrial customer that receiveselectric service from the electric power supplier, the Public Staff, or theCommission on its own motion, may initiate a complaint proceeding before theCommission to challenge the validity of the notification of nonparticipation.The procedures set forth in G.S. 62‑73, 62‑74, and 62‑75shall govern any such complaint. The provisions of this subsection shall alsoapply to commercial customers with significant annual usage at a thresholdlevel to be established by the Commission.

(g)        An electric publicutility shall not charge an industrial or commercial customer for the costs ofinstalling demand‑side management equipment on the customer's premises ifthe customer provides, at the customer's expense, equivalent demand‑sidemanagement equipment.

(h)        The Commissionshall adopt rules to implement this section.

(i)         The Commissionshall submit to the Governor and to the Joint Legislative Utility ReviewCommittee a summary of the proceedings conducted pursuant to this sectionduring the preceding two fiscal years on or before September 1 of odd‑numberedyears. (2007‑397,s. 4(a).)