§ 62-156. Power sales by small power producers to public utilities. - North Carolina Statutes

§ 62‑156.  Powersales by small power producers to public utilities.

(a)        In the event that a small power producer and an electricutility are unable to mutually agree to a contract for the sale of electricityor to a price for the electricity purchased by the electric utility, thecommission shall require the utility to purchase the power, under rates andterms established as provided in subsection (b) of this section.

(b)        No later than March 1, 1981, and at least every two yearsthereafter, the commission shall determine the rates to be paid by electricutilities for power purchased from small power producers, according to thefollowing standards:

(1)        Term of Contract. – Long‑term contracts for thepurchase of electricity by the utility from small power producers shall beencouraged in order to enhance the economic feasibility of small powerproduction facilities.

(2)        Avoided Cost of Energy to the Utility. – The rates paid by autility to a small power producer shall not exceed, over the term of thepurchase power contract, the incremental cost to the electric utility of theelectric energy which, but for the purchase from a small power producer, theutility would generate or purchase from another source. A determination of theavoided energy costs to the utility shall include a consideration of thefollowing factors over the term of the power contracts: the expected costs ofthe additional or existing generating capacity which could be displaced, theexpected cost of fuel and other operating expenses of electric energyproduction which a utility would otherwise incur in generating or purchasingpower from another source, and the expected security of the supply of fuel forthe utilities' alternative power sources.

(3)        Availability and Reliability of Power. – The rates to bepaid by electric utilities for power purchased from a small power producershall be established with consideration of the reliability and availability ofthe power. (1979, 2nd Sess.,c. 1219, s. 2.)