A BILL TO BE ENTITLED
AN ACT to reduce tHE burden of high energy costs on the citizens of north carolina by eliminating renewable energy portfolio standards and to provide for cost recovery by public utilities for certain costs of compliance with Renewable Energy Portfolio Standards.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 62‑2(a) reads as rewritten:
"§ 62‑2.  Declaration of policy.
(a)	Upon investigation, it has been determined that the rates, services and operations of public utilities as defined herein, are affected with the public interest and that the availability of an adequate and reliable supply of electric power and natural gas to the people, economy and government of North Carolina is a matter of public policy. It is hereby declared to be the policy of the State of North Carolina:
(1)	To provide fair regulation of public utilities in the interest of the public;
(2)	To promote the inherent advantage of regulated public utilities;
(3)	To promote adequate, reliable and economical utility service to all of the citizens and residents of the State;
(3a)	To assure that necessary resources are available at reasonable cost to meet future growth through the provision of adequate, reliable utility service, including but not limited to conservation, load management and efficiency programs, as additional sources of energy supply and/or energy demand reductions. To that end, to require energy planning and fixing of rates in a manner to result in the least cost mix of generation and demand‑reduction measures which is achievable, including consideration of appropriate rewards to utilities for efficiency and conservation which decrease utility bills;
(4)	To provide just and reasonable rates and charges for public utility services without unjust discrimination, undue preferences or advantages, or unfair or destructive competitive practices and consistent with long‑term management and conservation of energy resources by avoiding wasteful, uneconomic and inefficient uses of energy;
(4a)	To assure that facilities necessary to meet future growth can be financed by the utilities operating in this State on terms which are reasonable and fair to both the customers and existing investors of such utilities; and to that end to authorize fixing of rates in such a manner as to result in lower costs of new facilities and lower rates over the operating lives of such new facilities by making provisions in the rate‑making process for the investment of public utilities in plants under construction;
(5)	To encourage and promote harmony between public utilities, their users and the environment;
(6)	To foster the continued service of public utilities on a well‑planned and coordinated basis that is consistent with the level of energy needed for the protection of public health and safety and for the promotion of the general welfare as expressed in the State energy policy;
	
(8)	To cooperate with other states and with the federal government in promoting and coordinating interstate and intrastate public utility service and reliability of public utility energy supply;
(9)	To facilitate the construction of facilities in and the extension of natural gas service to unserved areas in order to promote the public welfare throughout the State and to that end to authorize the creation of expansion funds for natural gas local distribution companies or gas districts to be administered under the supervision of the North Carolina Utilities Commission; and
(10)	To promote the development of 

	
	the lowest cost electric power that will promote economic growth by providing public utilities the choice to use any type of energy resource free of State interference or control."
SECTION 2.  G.S. 62‑133.8 reads as rewritten:
"§ 62‑133.8.  Renewable Energy.
(a)	Definitions. – As used in this section:
	
(2)	"Demand‑side management" means activities, programs, or initiatives undertaken by an electric power supplier with customer approval or by its customers to shift the timing of electricity use from peak to nonpeak demand periods. "Demand‑side management" includes, but is not limited to, load management, electric system equipment and operating controls, direct load control, and interruptible load.
(3)	"Electric power supplier" means a public utility, an electric membership corporation, or a municipality that sells electric power to retail electric power customers in the State.
(3a)	"Electricity demand reduction" means a measurable reduction in the electricity demand of a retail electric customer that is voluntary, under the real‑time control of both the electric power supplier and the retail electric customer, and measured in real time, using two‑way communications devices that communicate on the basis of standards.
(4)	"Energy efficiency measure" means an equipment, physical, or program change implemented after January 1, 2007, that results in less energy used to perform the same function. "Energy efficiency measure" includes, but is not limited to, energy produced from a combined heat and power system that uses nonrenewable energy resources. "Energy efficiency measure" does not include demand‑side management.
(5)	"New renewable energy facility" means a renewable energy facility that either:
a.	Was placed into service on or after January 1, 2007.
b.	Delivers or has delivered electric power to an electric power supplier pursuant to a contract with NC GreenPower Corporation that was entered into prior to January 1, 2007.
c.	Is a hydroelectric power facility that delivers electric power to an electric power supplier.
	
(7)	"Renewable energy facility" means a facility that either:
a.	Generates electric power by the use of a renewable energy resource.
b.	Generates useful, measurable combined heat and power derived from a renewable energy resource.
c.	Is a solar thermal energy facility.
(8)	"Renewable energy resource" means a solar electric, solar thermal, hydropower, geothermal, or ocean current or wave energy resource; a biomass resource, including agricultural waste, animal waste, wood waste, spent pulping liquors, combustible residues, combustible liquids, combustible gases, energy crops, or landfill methane; waste heat derived from a renewable energy resource and used to produce electricity or useful, measurable thermal energy at a retail electric customer's facility; or hydrogen derived from a renewable energy resource, peat, nuclear energy, or a fossil fuel.

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	

	
(g)	Control of Emissions. – As used in this subsection, Best Available Control Technology (BACT) means an emissions limitation based on the maximum degree a reduction in the emission of air pollutants that is achievable for a facility, taking into account energy, environmental, and economic impacts and other costs. A biomass combustion process at any new renewable energy facility that delivers electric power to an electric power supplier shall meet BACT. The Environmental Management Commission shall determine on a case‑by‑case basis the BACT for a facility that would not otherwise be required to comply with BACT pursuant to the Prevention of Significant Deterioration (PSD) emissions program. The Environmental Management Commission shall adopt rules to implement this subsection. In adopting rules, the Environmental Management Commission shall take into account cumulative and secondary impacts associated with the concentration of biomass facilities in close proximity to one another. In adopting rules the Environmental Management Commission shall provide for the manner in which a facility that would not otherwise be required to comply with BACT pursuant to the PSD emissions programs shall meet the BACT requirement. Being a naturally occurring atmospheric gas that is necessary to the health of plant life and enables the production of oxygen by plant life, which is necessary to sustain animal life, carbon dioxide shall not be considered an air pollutant for the purposes of this section.
(h)	Cost Recovery and Customer Charges. –
(1)	For the purposes of this subsection, the term "incremental costs" means all reasonable and prudent costs incurred prior to July 1, 2021, by an electric power supplier to:
a.	Comply with the requirements of former subsections (b), (c), (d), (e), and (f) of this section that are in excess of the electric power supplier's avoided costs other than those costs recovered pursuant to G.S. 62‑133.9.
	
c.	Comply with any federal mandate that is similar to the requirements of former subsections (b), (c), (d), (e), and (f) of this section that exceed the costs that the electric power supplier would have incurred under those subsections in the absence of the federal mandate.
d.	Provide incentives to customers, including program costs, incurred pursuant to G.S. 62‑155(f).
(2)	All reasonable and prudent costs incurred prior to July 1, 2021, by an electric power supplier to comply with any federal mandate that is similar to the requirements of former subsections (b), (c), (d), (e), and (f) of this section, including, but not limited to, the avoided costs associated with a federal mandate that exceeds the avoided costs that the electric power supplier would have incurred pursuant to former subsections (b), (c), (d), (e), and (f) of this section in the absence of the federal mandate, shall be recovered by the electric power supplier in an annual rider charge assessed in accordance with the schedule set out in subdivision (4) of this subsection increased by the Commission on a pro rata basis to allow for full and complete recovery of all reasonable and prudent costs incurred to comply with the federal mandate.
(3)	Except as provided in subdivision (2) of this subsection, the total annual incremental cost to be incurred by an electric power supplier and recovered from the electric power supplier's retail customers shall not exceed an amount equal to the per‑account annual charges set out in subdivision (4) of this subsection applied to the electric power supplier's total number of customer accounts determined as of December 31 of the previous calendar year. The total annual incremental cost recoverable by an electric power supplier from an individual customer shall not exceed the per‑account charges set out in subdivision (4) of this subsection except as these charges may be adjusted in subdivision (2) of this subsection.
(4)	An electric power supplier shall be allowed to recover the incremental costs incurred prior to July 1, 2021, to comply with the requirements of former subsections (b), (c), (d), (e), and (f) of this section through an annual rider not to exceed the following per‑account annual charges:
2015 and
Customer Class	2008‑2011	2012‑2014	thereafter
Residential per account	$10.00	$12.00	$27.00
Commercial per account	$50.00	$150.00	$150.00
Industrial per account	$500.00	$1,000.00	$1,000.00
(5)	The Commission shall adopt rules to establish a procedure for the annual assessment of the per‑account charges set out in this subsection to an electric public utility's customers to allow for timely recovery of all reasonable and prudent costs of compliance with the requirements of former subsections (b), (c), (d), (e), and (f) of this section. The Commission shall ensure that the costs to be recovered from individual customers on a per‑account basis pursuant to subdivisions (2) and (3) of this subsection are in the same proportion as the per‑account annual charges for each customer class set out in subdivision (4) of this subsection.
(6)	After July 1, 2021, the Commission shall allow recovery under the annual rider described in this subsection only for the reasonable and prudent costs incurred prior to July 1, 2021. For the purposes of this subsection, "costs incurred prior to July 1, 2021," includes the following:
a.	Costs under renewable energy purchase contracts entered into prior to July 1, 2021.
b.	The costs of construction of renewable energy facilities for which a certificate of public convenience and necessity has been issued by the Commission prior to July 1, 2021.
(i)	Adoption of Rules. – The Commission shall adopt rules to implement the provisions of this section. In developing rules, the Commission shall:
(1)	Provide for the monitoring of compliance with and enforcement of the requirements of this section.
	
(3)	Ensure that energy credited toward compliance with the former renewable energy portfolio standards of this section not be credited toward any other purpose, including another renewable energy portfolio standard or voluntary renewable energy purchase program in this State or any other state.
(4)	Establish standards for interconnection of renewable energy facilities and other nonutility‑owned generation with a generation capacity of 10 megawatts or less to an electric public utility's distribution system; provided, however, that the Commission shall adopt, if appropriate, federal interconnection standards.
(5)	Ensure that the owner and operator of each renewable energy facility that delivers electric power to an electric power supplier is in substantial compliance with all federal and state laws, regulations, and rules for the protection of the environment and conservation of natural resources.
	
(7)	Develop procedures to track and account for renewable energy certificates, including ownership of renewable energy certificates that are derived from a customer owned renewable energy facility as a result of any action by a customer of an electric power supplier that is independent of a program sponsored by the electric power supplier.
(j)	Report. – No later than October 1 of each year, the Commission shall submit a report to the Governor, the Environmental Review Commission, and the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the Senate Appropriations Committee on Agriculture, Natural, and Economic Resources, and the chairs of the House of Representatives Appropriations Committee on Agriculture and Natural and Economic Resources regarding the cost impact on the production and transmission of electricity for electric power suppliers and their retail customers resulting from the use of renewable resources.
(k)	Tracking of Renewable Energy Certificates. – The Commission shall develop, implement, and maintain an Internet Web site for the online tracking of renewable energy certificates and to facilitate the establishment of a market for the purchase and sale of renewable energy certificates.
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SECTION 3.  Notwithstanding any order of the North Carolina Utilities Commission, including orders arising out of any general rate case involving an electric public utility, no electric public utility in the State that purchases power from a small power producer, as that term is defined under G.S. 62‑3 pursuant to the Order Establishing Standard Rates and Contract Terms for Qualifying Facilities issued by the North Carolina Utilities Commission on October 11, 2017, in the matter of Biennial Determination of Avoided Cost Rates for Electric Utility Purchases from Qualifying Facilities – 2016, Docket No. E‑100, SUB 148, shall charge its retail customers a rate higher than the rate the electric public utility would have charged based on the lowest cost electric generation available to the electric public utility.
SECTION 4.  This act becomes effective July 1, 2021.