Duke Energy Corp. has received regulatory approval to begin the bidding process in its first "tranche" of a multistep plan to procure nearly 2,700 MW of new renewable energy resources, namely solar, in North Carolina within the next few years.
The North Carolina Utilities Commission on Feb. 21 approved the company's initial solicitation period, which is set to begin in May, as part of its obligations to comply with solar policy reform enacted in July 2017.
North Carolina policy changes under House Bill 589 include provisions that require developing more than 3,200 MW of solar within the next five years.
As part of this plan, Duke Energy Carolinas LLC and Duke Energy Progress LLC must issue requests for approval to procure 2,660 MW of new renewable energy resources over a 45-month term, with eligible resources capped at 80 MW of nameplate capacity. At the end of the initial term, the commission will determine the amount of additional procurement Duke Energy needs to fulfill generation needs and statutory obligations.
Duke Energy Carolinas, or DEC, and Duke Energy Progress, or DEP, asked to use four request for proposal solicitations with the last to end in August 2021 to meet competitive procurement obligations.
Eligible facilities can be acquired from third parties or constructed, owned and operated by the utility. Utilities also can acquire energy and capacity from facilities owned and operated by third parties. There is a 30% limit, however, on the amount of utility-owned facilities involved in the competitive procurement, and the Duke Energy utilities asked to apply this restriction to the total 2,660 MW of new resources.
"Under Duke's proposal, market participants will develop proposals that include only the generating facility and interconnection facilities costs, and DEC and DEP will seek recovery of upgrade costs through future general rate case proceedings," according to the utilities' petition with the NCUC. "Under this proposal, Duke argues that its customers should benefit from lower proposal costs, or, at a minimum, be indifferent between higher [competitive procurement of renewable energy] proposal costs or recovery through base rates."
The commission approved the initial solicitation with modifications and instructions for Duke Energy to work with intervenors and the public staff on concerns related to power purchase agreements. (NCUC dockets E-2, SUB 1159 and E-7, SUB 1156)