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New Rules Adopted for the Competitive Procurement of Renewable Energy Program

On July 28, 2017, the NC Utilities Commission issued an order initiating a rulemaking procedure to adopt and amend the Commission’s rules to implement N.C.G.S. 62-110.8 (House Bill 589) that was enacted this past summer.  House Bill 589 requires Duke Energy Progress and Duke Energy Carolinas (together, “Duke Energy”) to develop a program for the competitive procurement of renewable energy (“CPRE”) in order to procure 2,660 MW of renewable energy over a 45-month period.  Prior to adoption of the rules implementing the CPRE Program, the Commission accepted and considered proposed rules and comments from Duke Energy, the Public Staff, the North Carolina Sustainable Energy Association, the North Carolina Clean Energy Business Alliance, and others.  On November 6, 2017, the Commission amended Commission rules R8-64(a)(1) and R8-66(b) and adopted Commission rule R8-71 to implement the provisions of HB 589 and to provide for Commission oversight of the CPRE Program.

Notably, the Rules provide that the Commission will select and approve an Independent Administrator (“IA”) to administer the CPRE Program. The IA is required to develop and publish the Program’s methodology prior to solicitation of bids. Duke Energy must develop and file Program guidelines that will include such matters as:  the planned allocation of the 2,660 MW required to be procured under the Program; the timeframe for the initial solicitations and the initial procurement amount; bidder requirements; evaluation factors; and pro forma contracts. The IA will receive the bids, and then evaluate and rank the bids from the most competitive to the least competitive.  Duke Energy will be required to select the proposals in the order ranked by the IA, unless Duke eliminates a bid.

The next step in this process is that Duke Energy will develop and file proposed guidelines for the CPRE program with the Commission.  Interested parties will have the opportunity to comment on Duke’s proposed guidelines before they are adopted by the Commission.  We will continue to monitor the progress of the development of the guidelines and the CPRE Program as it is initiated.

If you have any questions about the CPRE Program or process, please contact Karen Kemerait, Deborah Ross, or Gray Styers.

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