State Energy Efficiency Policy Database

Individual utilities now administer energy efficiency and renewable energy programs in North Carolina with oversight and approval from the North Carolina Utilities Commission (NCUC).  In August 2007, Session Law 2007-397 (Senate Bill 3) established the state’s first Renewable Energy and Energy Efficiency Portfolio Standard. This sets renewable energy and energy efficiency objectives for utilities. Each utility will submit a REEPS compliance plan to the NCUC, detailing its plans to achieve the required savings. The law applies to investor-owned, municipal and cooperative utilities.

In 2009, the NCUC approved Duke Energy Corp.’s Save-A-Watt program. This program, as proposed, would pay Duke 90% of the costs it avoids by not having to build new plants or buy additional electricity.

Natural gas efficiency programs in the residential, residential low-income, and commercial sectors are delivered by the utilities, North Carolina State Energy Office, and the Department of Health and Human Services.

North Carolina electric utilities reported efficiency program savings of approximately 51,916 MWh in 2009.  Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.

In an settlement agreement brokered between energy efficiency advocates and two merging utilities, Progress Energy Carolinas and Duke Energy Carolinas, the merging utilities agreed to new energy efficiency programs and targets between 2014-2018. The Settlement Agreement, signed in December 2011, sets an annual energy efficiency savings target of 1% of retail sales starting in 2015 and a 7% cumulative target from 2014 to 2018 for each utility. Achievement of the target will require successful development, regulatory approval and implementation of energy efficiency programs. 

Links:

• Database of State Incentives for Renewables and Efficiency

Summary: Renewable Energy and Energy Efficiency Portfolio Standard (REPS). Investor-owned: 12.5% by 2021 and thereafter. Energy efficiency is capped at 25% of the 2012-2018 targets and at 40% of the 2021 target.

North Carolina Senate Bill 3 was finalized in 2008, introducing the state’s combined Renewable Energy and Energy Efficiency Portfolio Standard (REPS).  Under the REPS, public electric utilities in the state must obtain renewable energy power and energy efficiency savings of 3% of prior-year electricity sales in 2012, 6% in 2015, 10% in 2018, and 12.5% in 2021 and thereafter. For IOUs, energy efficiency is capped at 25% of the 2012-2018 targets and at 40% of the 2021 target. Co-operative and municipal utilities may satisfy their all of their REPS requirements with energy efficiency outside of particular set-asides for solar and other resources. Utilities demonstrate compliance by procuring renewable energy credits (RECs) earned after January 1, 2008. Under NCUC rules, a REC is equivalent to 1 MWh of electricity avoided through an efficiency measure. Since the REPS goals are cumulative, the 12.5% target in 2021 will require 5% of its sales in 2021 to be met with energy efficiency over the entire 13-year period in which energy efficiency savings may be counted. Averaged over three years, each target period until 2018 requires annual savings of 0.25%. The final period from 2018 to 2020 will allow annual energy savings of 0.83%. Utilities plan to employ more than the full quarter allowable over the next ten years. Industrial customers may opt-out of utility energy efficiency programs and not bear the costs of new programs if they implement their own programs. 

Each electric power supplier must file a REPS compliance plan for Commission review as part of its Integrated Resource Planning (IRP) filing on or before September 1 of each year.  A utility’s IRP filing must include a comprehensive analysis of all resource options considered by the utility, including demand-side management and energy efficiency, which must result in “the least cost mix of generation and demand reduction measures achievable….”(N.C. Gen. Stat. §62-2(3a)) According to Commission Rule R8-60, IRP filings must include a 15-year forecast of demand-side resources, among other requirements for the assessment and characterization of the demand-side resource.

North Carolina has no Natural Gas EERS.

Links

• Authority: N.C. Gen. Stat. § 62-133.8, August 2007
• Authority: 04 NCAC 11 R08-64, et seq., February 2008

Progress Energy Carolinas and Duke Energy Carolinas each have an incentive mechanism in place. The Duke mechanism permits the utility to earn a percentage of avoided costs which are capped as a percentage of actual program costs. The cap ranges from 5-15%. The Progress mechanism allows the utility to earn 8-13% of the net present value of the net savings from DSM programs.