Ed Finley, Chairman of the NC Utilities Commission gave an update on the Renewable Energy and Energy Efficiency Portfolio Standard in North Carolina (a.k.a. REPS and a major part of 2007’s Senate Bill 3) to the House Energy and Energy Efficiency Committee yesterday. Mitch predicted problems with the bill before it even passed, see here.
This is the first renewable energy portfolio standard in the southeast and has been in effect for about 18 months now. The NC Utilities Commission was charged with implementation of the bill. They have substantial rulemaking authority and have outlined and addressed 105 recommendations so far. Some of the things they are looking at are grid interconnecting problems, net metering, using third party administrators and decoupling of sales and profits.
They have requested and gotten plans from the utility companies on how they intend to comply with the 12.5% requirement for energy efficiency and renewable energy by 2021. According to recent News and Observer business report, the costs to produce the required renewable energy so far are four times as expensive as Progress Energy expected. Couple this with cost caps imposed and there just is no way to meet the state mandated requirements. Even worse, the requirements increase as the phase in period progresses towards full compliance in 2021 while availability of renewable sources dwindles and costs continue to escalate.
Finley reported that there have been lots of hearings on these very complicated (and overreaching, by the way) new laws with lots of residual issues and unintended consequences now surfacing. Some that were mentioned include a question of the 3% REPS requirement for 2012 based on 2010 sales, so what about the year in between? Does existing hydropower facilities? generation qualify to meet the REPS requirements? (Progress says yes; the Commission says no) Is the generation by hog and poultry waste pro-rated or joint? (Of note according to Finley: ?Waste energy sources are renewable, not green. They have emissions just like coal? ? so how is this better?) Do electric memberships in other states have to comply with North Carolina requirements? And on the horizon, will federal requirements being considered in Congress now pre-empt the North Carolina laws? And more importantly, how much is it going to cost? Increases to the power companies are passed along to the customer. We?ll all be paying ? twice – as ratepayers ourselves and as taxpayers responsible for the government?s power bill.
And a closing remark by the Utilities Commission Chair, energy companies are required to comply with these requirements and ?are allowed to charge more because the societal and environmental benefits outweigh the costs.? Says who? Do the ratepayers agree with this?
The Utility Commission is required to submit an annual report to the governor, the Environmental Review Commission and the Joint Legislative Utility Committee. The first was submitted October 1, 2008. So far, so good? Finley said it was ?a tall order to make it work but time will tell if it will work.? We know how it?s going to work and it?s all outlined here in Daren’s Spotlight report, appropriately titled Renewable Energy At All Costs: Legislation ignores the will of the public and would have unintended consequences. And the News and Observer report confirms what we thought when the bill passed.
