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NC House passes solar policy reform

The North Carolina House of Representatives on June 7 voted 108-11 to pass legislation that implements competitive bidding for new solar projects and reforms contract mandates between utilities and developers.

House Bill 589, backed by Duke Energy Corp. and other stakeholders representing solar and business interests in the state, includes provisions that require the development of more than 3,200 MW of solar in North Carolina within the next five years.

Duke Energy and Dominion Energy Inc. utility Dominion Energy North Carolina 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 North Carolina Utilities Commission will determine the amount of additional procurement required by public utilities to fulfill generation needs and statutory obligations.

In addition, the utilities must implement a separate program to procure 600 MW of contracted renewable energy and capacity available for use by major military installations, The University of North Carolina and other large nonresidential customers for a period of at least five years.

The bill also implements changes to the mandatory purchase of energy and capacity from qualifying solar facilities under the Public Utility Regulatory Policies Act, or PURPA. These changes include capping eligibility for the standard avoided cost tariff utilities must offer under PURPA at 1 MW instead of 5 MW and reducing the maximum standard qualifying facility contract term to 10 years from 15 years. The standard contract for these small power producers would be capped at an aggregate of 100 MW per utility, at which time the threshold for the standard contract obligation drops to 100 kW.

The legislation implements the move to a five-year contract term on PPAs that do not qualify for the standard offer and allows these contracts to be "established through good faith negotiations between the utility and small power producer."

H.B. 589 also opens up the state to third-party solar leasing, requires Duke Energy and Dominion to each offer a community solar program capped at 20 MW of total generating capacity, establishes revised net metering rates and implements a solar rebate program that offers incentives to residential and nonresidential customers that install small customer-owned or leased solar facilities.

The bill heads to the Senate and has the backing of North Carolina Gov. Roy Cooper, who issued a statement on June 6 urging the Legislature to pass it.

The House passed an amended version that eliminates a directive for the Joint Legislative Commission on Energy Policy to study property tax exclusions for solar energy systems and facilities that use swine or poultry waste resources.

Dominion Energy North Carolina is known legally as Virginia Electric and Power Co.