It s not easy being Green...

Transcription

1 It s not easy being Green... M. Gray Styers, Jr. Fox Rothschild LLP Raleigh, NC gstyers@foxrothschild.com 2018 Fox Rothschild It s not easy being Green Or Is It? M. Gray Styers, Jr. Fox Rothschild LLP Raleigh, NC gstyers@foxrothschild.com 2018 Fox Rothschild

2 Green Policies in Corporate America Increasingly popular A.. to.. (almost) Z (Anheuser-Busch InBev) (Wells Fargo, Workday, Yoox) The RE100 : 155 companies that have made the commitment to go 100% renewable Appendix A Governor s Executive Order No. 80 October 19, Targets 40% statewide reduction in greenhouse gas emissions 80,000 zero-emission vehicles (ZEVs) 40% reduction in state building energy usage Immediate Action by State Agencies Long-Term Planning

3 Today s Focus Created in 1988 as a resource for renewable energy programs and information, training, technical assistance and applied research Operated by the College of Engineering at N.C. State University Funded by the NC General Assembly though the state Department of Environmental Quality; plus federal and state grants and service fees Primary mission is NOT research Major Program Areas: Renewable Energy Clean Power & Efficiency Clean Transportation Economic Development Energy Policy Workforce Development Education & Outreach 5 Technical Support Opportunities Resource Provided Applications Benefits Efficiency Assessments, audits, prioritization of energy improvements (including payback and viability), including on-site analysis of opportunities Entire facility, as well as specific systems, i.e., compressed air, HVAC, energy management, automation and controls Energy consumption reductions / cost savings. Potential benefits through Duke Energy for Assessments as well as incentives Energy diversity Renewable energy assessments, feasibility studies Renewable energy including solar PV, energy storage, biogas / biomass Sustainability objectives inc. energy consumption reductions, GHG reductions, incorporation of renewables, incentives Often, Duke Energy customers can request NC Clean Energy Technology Center services through a thirdparty assessment request: 6

4 Database of State Incentives for Renewables & Efficiency (DSIRE) Energy Efficiency Potential Source: State Level Electric Energy Efficiency Potential Estimates EPRI 05/f34/epri_state_level_electric_energy_efficien cy_potential_estimates_0.pdf Electric energy efficiency potential: 30,907 GWh (18.4% of retail sales or enough to power 2.5 million homes) by 2035 for NC Commercial sector alone has more than 12,815 GWh (or 20% of retail sales)

5 $1.8 BILLION $1.7 BILLION 72.9 MILLION 16.8% $17.5B 101, MILLION 8.1 BILLION 1,750 18,286 $420 MILLION $10.0 BILLION $13.9 BILLION STATEWIDE ENERGY SAVINGS 85 MILLION Time of Use (TOU) Electric Rates Differentiating on-peak and off-peak energy usage Seasonal Hourly Requiring Advanced Metering Infrastructure (AMI) DEP: Schedule: MGS-TOU-50, LGS-TOU-50 DEC: Schedule: OPT-E, OPT-V Even more advanced: Real Time Pricing (DEP: LGS-RTP-50) pilot projects: (DEC: Schedule HP)

6 Direct Purchases from Renewable Resources In NC, not allowed. Energy can only be purchased from utilities. Affirmed by NC Court of Appeals: State ex rel. Utils. Comm n v. NC Waste Awareness & Reduction Network, 805 S.E.2d 712, 714 (N.C. Ct. App. 2017), aff d per curiam, 812 S.E.2d 804 (N.C. 2018). Past legislative reform attempts have failed. In 2015, House Bill 245 Direct Purchases from Renewable Resources But possible in states with retail choice 13 states (e.g. MD, OH, NY, PA, IL, TX and the District of Columbia) And 5 states have limited retail choice, including California, Georgia and Virginia Trends? (Nevada referendum defeated, Nov. 2018)

7 Self-Generation N. C. Gen. Stat certification requirements for electric generation facilities (g) The certification requirements of this section shall not apply to persons who construct an electric generating facility primarily for that person s own use and not for the primary purpose of producing electricity, heat, or steam for sale to or for the public for compensation... Self-Generation: North Carolina History

8 Self-Generation: Apple, in Maiden, NC Self-Generation: For you and me?

9 Leasing of Solar Facilities NCGS Limited to the lesser of 1MW or 100% of contract demand for non-residential customers Must be located on customers premises and intended only to offset the customer s electrical consumption at that premises Aggregate capped at 1% total of DEP s and DEC s previous 5- year average of retail peak demand Municipal utilities can also choose to lease solar systems within their jurisdictions Regulations for program and lessors found at NCUC Rule R8-73 Leasing of Solar Facilities NCUC Rule R8-73 Scope: Applies to lessors and marketers Fit, willing, and able to own and lease solar energy facilities Financially solvent Maintain adequate insurance protection - $100,000 CGL Able to maintain its equipment in a safe, dependable manner Registration of each facility with the Commission Compliance with statutory lease requirements Consent to audit of books and records by Public Staff and NCUC Compliance will all federal and state laws, regulations and rules Annual reporting requirements April 1

10 Lease Requirements Signed and dated by customer, with all blanks filled in 12-point type 3-day right of rescission Equipment make and model description, and output guarantee Total cost, fees, payments Disclosure of tax incentives included in calculation of lease payments Disclosure of transferability of warranty or maintenance terms Disclosure of restrictions on modification or transfer of equipment ownership Disclosure of restrictions on modification or transfer of real property ownership Summary of total of O&M costs If estimate of future utility charges, disclosure of 5% decrease or increase Disclosure that utility rates and tax incentives are subject to change. Community Solar NCGS Community Solar allows utility customers to jointly own a solar facility or subscribe to a portion of a facility s output. HB 589 Part VI, codified at N.C.G.S Aggregate supply: 20 MW in each of DEC/DEP (40 MW total) 5 MW size limit per facility Customers credited at avoided cost rate Regulations for program found in NCUC Rule R8-72

11 New solar rebates- NCGS (f) HB 589, Part VIII, codified at G.S (f)) Reasonable incentives limited to100 kw for non-residential customers 10 MW annual cap MW non-residential, of which 2.5 MW is reserved for non-profit organizations DEP and DEC programs approved by NCUC Order in Docket No. E-2, Sub 1167; Docket No. E-7, Sub 1166 (April 3, 2018). Energy Storage Study HB 589, Part XII authorized study of Energy Storage Issued on December 1, 2018 Can be found at Energy Storage : a system used to store electric, mechanical, chemical, or thermal energy that was once electrical energy, for use in a process that contributes to end-user demand management or grid operation and reliability. Hot Topic Alert!!!!

12 Energy Storage Study End User Services Insights Li-ion batteries can reduce coincident peak (CP) and time-of-use (TOU) charges from some large customers. 2-hour duration batteries yield highest benefits. Anticipated price drops in Li-ion batteries will make this application even more cost effective. Ice storage is cost effective for large customers under CP and TOU rates. 80 ice storage projects have been implemented in NC. Residential battery storage coupled with rooftop solar photovoltaics is not yet cost-effective under current electric power rate design. Energy Storage - Ongoing issues Examples: Is energy storage part of regulated utility service? Can energy storage be paired with utility-scale renewable generation facilities? If so, what are regulatory implications (if any)? Hearing last week: in NCUC Docket E-100, Sub 101 (interconnection) See: Rebuttal Testimony of Michael R. Wallace (1/8/19) How should storage output be valued/priced (if at all)? Docket E-100 Sub 158 (avoided cost proceeding) currently pending

13 Green Tariff - Definition In traditional electricity markets (including NC), retail customers are not able to directly purchase renewable energy from third-party sellers. They can only buy energy from their local utility. To address this issue and provide more access to affordable renewable energy, utilities are starting to offer large-scale renewable energy purchasing programs, called green tariffs, whereby qualifying customers are able to purchase part or all of their electricity, directly or indirectly, from renewable resources. Green Tariff Statutory Authorization House Bill 589, Part III, codified at N.C.G.S For Duke Energy Carolinas and Duke Energy Progress Program will run for 5 years Maximum size of 600 MW 100 MW reserved for major military installations 250 MW reserved for the University of North Carolina system 250 MW remaining for other qualified customers

14 Requirements Green Tariff Nuts & Bolts 1 MW of load at a single location; or 5 MW of aggregate load at multiple locations Contract Customer can participate for period of 2 to 20 years Customer subject to reasonable credit requirements Billing Customer pays cost of renewable energy procured Customer is credited for energy, not to exceed avoided cost Green Tariff NCUC Docket Green Source Advantage Duke filed its proposed Green Source Advantage tariff on January 23, 2018 in Docket Nos. E-2, Sub 1170 & E-7, Sub 1169 Waiting for the NCUC to issue an Order approving or modifying the program

15 Initial Comments NCUC Public Staff Green Tariff Who is interested? Apple & Google NC Clean Energy Business Alliance NCSEA Southern Alliance for Clean Energy U.S. Department of Defense and Federal Executive Agencies UNC-Chapel Hill Walmart Letters Davidson College, Duke University, Wake Forest University New Belgium Brewing, SAS, Sierra Nevada, Unilever, VF Corp. Thank you! Questions? M. Gray Styers, Jr

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