Utilities panel keeps status quo on green-energy rates

North Carolina's Utilities Commission has opted not to change the way utilities calculate the rates they have to offer private developers for renewable energy.

Last week's order stabilizes, for now, the economic climate under which commercial solar farms are built. North Carolina ranks fourth nationally for solar capacity, the Solar Energy Industries Association says.

Utilities base the rates they pay for green energy on what are called avoided costs. In North Carolina's case, that's the cost of building gas-fired power plants to meet periods of peak demand for electricity.

Duke Energy says the "peaker" method results in its paying too much for solar power. Solar developers say it pays them too little. The commission took a middle ground, keeping the current method.

The order retained the threshold for standardized purchase contracts, which don't have to be individually negotiated, at 5 megawatts and smaller. Duke had argued that the threshold should be reduced to 100 kilowatts.

The commission also kept the maximum contract term at 15 years, turning aside green-energy arguments for longer contract terms and utility pleas for shorter ones.

"It looks like the status quo carried the day, which probably means it's going to be a good year for solar," said Duke spokesman Randy Wheeless. The state's renewable-energy tax credit, a powerful incentive behind solar's expansion, will expire Dec. 31 unless legislators renew it.

Said the North Carolina Sustainable Energy Association: "By making this finding and rejecting the monopoly power companies’ efforts to roll back the established policy, the commission itself recognized we’re better off with clean energy. North Carolina customers and the economy are the real winners under the commission's order."  

The Utilities Commission is now taking comments on how to relieve a congested queue of proposed solar projects. Utilities say more than 700 proposals are now before them, many of which will never be built.