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North Carolina

Incentives/Policies for Renewables & Efficiency

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Renewable Energy and Energy Efficiency Portfolio Standard   

Last DSIRE Review: 12/12/2012
Program Overview:
State: North Carolina
Incentive Type: Renewables Portfolio Standard
Eligible Efficiency Technologies: CHP/Cogeneration, Unspecified Technologies, Electricity Demand Reduction*
Eligible Renewable/Other Technologies: Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Landfill Gas, Wind, Biomass, Geothermal Electric, CHP/Cogeneration, Hydrogen, Anaerobic Digestion, Small Hydroelectric, Tidal Energy, Wave Energy
Applicable Sectors: Municipal Utility, Investor-Owned Utility, Rural Electric Cooperative
Standard:Investor-owned utilities: 12.5% by 2021
Electric cooperatives, municipal utilities: 10% by 2018
Technology Minimum:Solar: 0.2% by 2018
Swine Waste: 0.2% by 2018
Poultry Waste: 900,000 MWh by 2015
Credit Trading:Yes (NC-RETS)
Credit Transfers Accepted From:M-RETS, NAR, WREGIS, ERCOT into NC-RETS
(Refers to tracking system compatibility only, not RPS eligibility. Please see statutes and regulations for information on facility eligibility)
Credit Transfers Accepted To:NC-RETS into NAR
(Refers to tracking system compatibility only, not RPS eligibility. Please see statutes and regulations for information on facility eligibility)
Web Site: http://www.ncuc.commerce.state.nc.us/reps/reps.htm
Authority 1:
Date Enacted:
Date Effective:
N.C. Gen. Stat. ยง 62-133.8
8/20/2007
1/1/2008
Authority 2:
Date Enacted:
Date Effective:
04 NCAC 11 R08-64, et seq.
2/29/2008
2/29/2008
Authority 3:
Date Enacted:
Date Effective:
SB 886
8/5/2010
8/5/2010
Authority 4:
Date Enacted:
NCUC Order, Docket No. E-100, Sub 113
3/31/2010
Authority 5:
Date Enacted:
Date Effective:
SB 75
4/28/2011
4/28/2011
Summary:

North Carolina's Renewable Energy and Energy Efficiency Portfolio Standard (REPS), established by Senate Bill 3 in August 2007, requires all investor-owned utilities in the state to supply 12.5% of 2020 retail electricity sales (in North Carolina) from eligible energy resources by 2021. Municipal utilities and electric cooperatives must meet a target of 10% renewables by 2018 and are subject to slightly different rules. In February 2008, the North Carolina Utilities Commission (NCUC) issued an order adopting final rules to implement the REPS.

Eligible energy resources include solar-electric, solar thermal, wind, hydropower up to 10 megawatts (MW), ocean current or wave energy, biomass that uses Best Available Control Technology (BACT) for air emissions, landfill gas, combined heat and power (CHP) using waste heat from renewables, hydrogen derived from renewables, and electricity demand reduction*. Up to 25% of the requirement may be met through energy efficiency technologies, including CHP systems powered by non-renewable fuels. After 2021, up to 40% of the standard may be met through energy efficiency.

The overall target for renewable energy includes technology-specific targets of 0.2% solar by 2018 (which includes solar electric, solar water heating, solar absorption cooling, solar dehumidification, solar thermally driven refrigeration, and solar industrial process heat), 0.2% energy recovery from swine waste by 2018, and 900,000 megawatt-hours (MWh) of electricity derived from poultry waste by 2014. While the general renewable energy targets and solar set-asides apply individually to each utility, the targets for swine waste and poultry waste were written into the law to apply to the state as a whole, without assigning individual requirements for each utility. Given the difficulty of assessing a utility's compliance with a shared statewide requirement, the NCUC adopted a method for dividing the requirements among the utilities. Through this approach, each utility will be separately responsible for a portion of the swine and poultry waste requirements in proportion to the ratio of their previous year's electricity shares divided by the previous year's total statewide electricity sales. The March 2010 NCUC order also allows the utilities to jointly purchase energy derived from swine and poultry waste.

The NCUC has required that each electric power supplier submit its first annual REPS compliance plan by September 1, 2008. Beginning in 2009, each power supplier is required to file a compliance report, detailing the actions it has taken to fulfill the requirements of the REPS.

The compliance schedule for investor-owned utilities appears below. Note that each year's percentage requirement refers to the previous year's electricity sales (i.e., the 2021 standard is 12.5% of 2020 retail sales). The requirements for swine waste and poultry waste were amended by a NCUC Order in November 2012 by delaying requirements that had been previously established for 2012. The schedule presented below accounts for the changes approved by the NCUC.

  • 2010: 0.02% from solar
  • 2012: 3% (including 0.07% from solar)
  • 2013: 3% (including 0.07% from solar + 0.07% from swine waste + 170,000 MWh from poultry waste)
  • 2014: 3% (including 0.07% from solar + 0.07% from swine waste + 700,000 MWh from poultry waste)
  • 2015: 6% (including 0.14% from solar + 0.14% from swine waste + 900,000 MWh from poultry waste)
  • 2018: 10% (including 0.20% from solar + 0.20% from swine waste + 900,000 MWh from poultry waste)
  • 2021: 12.5% (including 0.20% from solar + 0.20% from swine waste + 900,000 MWh from poultry waste)


Electric cooperatives and municipal utilities must meet the solar, swine waste and poultry waste goals, but these utilities only must meet an overall target of 10% by 2018. Cooperatives and municipal utilities are permitted to use demand side management or energy efficiency to satisfy the standard without limitation, and may also use large hydropower to meet up to 30% of the renewable energy requirement.

Utilities may demonstrate compliance by procuring renewable energy credits (RECs) earned after January 1, 2008. Under NCUC rules, a REC is equivalent to 1 MWh of electricity derived from a renewable energy source, or an equivalent amount of thermal energy in the case of CHP and solar water heating, or 1 MWh of electricity avoided through an efficiency measure. The law explicitly states that RECs do not include credit for emissions reductions from oxides of sulfur and nitrogen, mercury or carbon dioxide. RECs must be purchased within three years of their generation, and must be retired within seven years from when their cost was recovered. Utilities may use unbundled RECs from out-of-state renewable energy facilities to meet up to 25% of the portfolio standard. Qualifying out-of-state facilities are (1) hydroelectric power facilities with a generation capacity up to 10 MW, or (2) renewable energy facilities placed into service on or after January 1, 2007. Suppliers with fewer than 150,000 customers are not limited in the amount of out-of-state renewable energy RECs they may procure to meet the standard. As required by SB 90 of 2009, the NCUC adopted the North Carolina Renewable Energy Tracking System (NC-RETS) in July of 2010 to ensure proper counting of RECs. For the purposes of REC compliance, the Commission will assign triple credit for every one REC generated by the first 20 MW of a biomass facility located at a "cleanfields renewable energy demonstration park", as defined by SB 886.

Utilities may recover the incremental cost of renewable resources and up to $1 million in alternative energy research expenditures annually from customers. The cost per customer account is capped according to the following schedule:

Sector 2008 2012 2015
Residential $10 $12 $34
Commercial $50 $150 $150
Industrial $500 $1000 $1000


The NCUC is responsible for administering the REPS and may adjust or modify the REPS schedule if the commission deems such modifications to be in the public interest. Under the NCUC's final rules, there are no specified penalties or alternative payments for noncompliance, but the commission has existing authority under Chapter 62 of the N.C. General Statutes to enforce compliance.


* Senate Bill 75 of 2011 allows for electricity demand reduction to count towards the standard. Unlike "energy efficiency measures", which are only allowed to account for 25% of a utility's requirement, electricity demand reduction is capable of meeting up to 100% of a utility's renewable energy requirement under the law. Senate Bill 75 defines electricity demand reduction as "a measurable reduction in the electricity demand of a retail electric customer that is voluntary, under the real-time control of both the electric power supplier and the retail electric customer, and measured in real time, using two-way communications devices that communicate on the basis of standards."


 
Contact:
  Dan Conrad
North Carolina Utilities Commission
430 N. Salisbury Street
Raleigh, NC 27611
Phone: (919) 733-0835
E-Mail: dconrad@ncuc.net
Web Site: http://www.ncuc.commerce.state.nc.us
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.