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A query of ‘regulatory surplus’
For massive clients with 100% clear power commitments, a inexperienced tariff is a necessity in North Carolina, the place Duke has a monopoly and cities, knowledge facilities, and the like can’t purchase clear power instantly from photo voltaic farms.
In principle, a inexperienced tariff permits a firm resembling Google or Amazon to spur a new provide of unpolluted power equal to its electrical demand, with Duke performing as an administrative go-between. An earlier iteration of Green Source Advantage kind of did simply that.
But the accounting received extra difficult in 2021, when a bipartisan state regulation required Duke to chop its carbon air pollution by not less than 95% by 2050. If the corporate is legally required to construct scores of photo voltaic farms anyway, can a massive buyer legitimately declare its sponsorship of 1 challenge makes a distinction?
This query of “regulatory surplus” sparked a flurry of arguments and counterarguments earlier than the fee for some 18 months. Duke initially claimed such “additionality” was neither possible nor mandatory, and a few companies mentioned chipping in to assist the clear power transition was adequate for them. More than a dozen native chambers of commerce and potential clients wrote to regulators in assist of the unique program.
But Google, the U.S. Department of Defense, and different massive clients joined clear power advocates to flag the issue of regulatory surplus, as did the Center for Resource Solutions, the nonprofit that certifies voluntary renewable power buy packages. Duke University, which has no connection to the utility, mentioned it wouldn’t take part within the tariff.
‘A small step in the correct course’
The debate, together with prodding from commissioners, prompted Duke Energy so as to add a “useful resource acceleration possibility” to its proposal. The various permits massive clients to advance about 150 megawatts of photo voltaic power annually by sponsoring initiatives not chosen within the firm’s annual aggressive bidding course of. Every two years, Duke will get retroactive credit score for this “additional” photo voltaic as a part of its compliance with the 2021 regulation.
Clean power advocates consider the brand new possibility is a “small step in the correct course.” But they be aware it accounts for 1 gigawatt of unpolluted power over 10 years, a fifth of your entire program. Customers who lay declare to the remaining 4 gigawatts wouldn’t be impacting the state’s transition to scrub electrical energy, they are saying.
“If you’re the shopper of a enterprise who claims to assist our state’s clear power transition by collaborating in this system, you’re going to count on that enterprise to be making a distinction — not simply subsidizing what Duke was going to do anyway,” mentioned Nick Jimenez, senior lawyer on the Southern Environmental Law Center.
The Carolinas Clean Energy Business Alliance, a group of unpolluted power suppliers, additionally criticized the acceleration possibility. And although the Carolina Utility Customers Association, one other group of huge industrial clients, didn’t oppose the amended proposed tariff, it registered skepticism.
“[Our] members have little curiosity within the Resource Acceleration Option,” the group mentioned in a letter to regulators, “which might ship electrical energy at a premium value with out offering the advantage of regulatory surplus-based environmental attributes that might be helpful in assembly company environmental, social, and governance targets.”
Cause for hope?
While advocates see little good within the fee’s approval of the Green Source Advantage Choice program, they nonetheless have some faint trigger for hope.
One is the so-called Clean Transition Tariff, which Duke might suggest later this 12 months. An outgrowth of a May settlement between the utility and Amazon, Google, Microsoft, and Nucor, that program might permit collaborating clients to spur new initiatives, resembling photo voltaic–battery storage combos or small nuclear power, that present carbon-free electrical energy across the clock.
“This just isn’t inside the order,” mentioned Jimenez, however the May memorandum of understanding, “is the massive alternative for one thing higher.”
Duke says the Clean Transition Tariff can be one other voluntary possibility for purchasers, not a substitute for the one simply greenlighted. “We see the approval of Green Source Advantage Choice as a first step,” the corporate’s Stewart mentioned, “enabling us to maneuver ahead with new tariffs just like the Clean Transition Tariff.”
Maggie Shober, analysis director on the Southern Alliance for Clean Energy, agrees the memorandum of understanding is trigger for some optimism. But she additionally notes that it’s solely “an settlement to speak about one thing. It might be a possibility,” she mentioned, “or it might be a missed alternative. “
And it doesn’t matter what, the Clean Transition Tariff gained’t cater to municipalities and different midsize clients with local weather commitments. If these clients decline to pursue Green Source Advantage Choice, their solely possibility is to attend for Duke to regulate.
Commissioner Jeffrey A. Hughes pointed to that chance in a concurring opinion.
“Once this system choices are launched, it’ll shortly develop into clear whether or not this system is as enticing as Duke asserts,” Hughes wrote. “If considerations proceed and curiosity is modest from the outset, it’s my hope that Duke will work shortly on new packages that can have a larger affect.”
