Duke Energy settlement saves consumer-sited solar

Duke Energy Carolinas has filed a settlement with state regulators in North Carolina that amends the utility giant’s proposed $13 billion Power/Forward Carolinas grid modernization program within the state.

The proposal, introduced last February, set out with the stated intent of adding underground power lines, enabling grid self-regulation technologies, providing increased protection against cyberthreats and supporting renewable energy initiatives.

The last part of the statement is contradictory, as the proposal included provisions that would have undermined the economics of customer-sited solar by imposing increased fixed charges for Duke’s customers.

In a blog post for Vote Solar, Caroline Golin, the organization’s southeast regulatory director, stated that under the original proposal, Duke would also drastically increase utility bills for some customers. In her post she stated that independent parties estimated that the average family in North Carolina would see a 50% rate increase, while the average business would see a 40% increase, both in the form of fixed charges.

Exact numbers have been hard to come by, but high enough fixed charges could dismantle the behind-the-meter solar industry in pretty much any utility service area where customers utilize net metering.

Golin also tackled the hypocrisy in the language of the bill, writing in the post:

Despite splashy marketing ads featuring renewables and touting job growth, Duke’s plan puts solar out of reach for customers, makes it much harder for clean energy companies to survive, and makes it more expensive to do business in North Carolina.

This attempt by Duke was in no way revolutionary. Utilities have long been at odds with consumer- and third-party owned solar, as it allows customers to reduce their grid power consumption and, by extension, their power bill. This cuts into the revenue of the utilities, who look to claw back as much revenue as they can, and kill commercial rooftop solar with these fixed rates.

Of course, fixed rates are not only bad for customer-sited solar, but also low- or fixed-income consumers, whose bills usually rise when the fixed portion of the bill increases, even if the energy charge decreases.

Duke, for its part, notes that in January it rolled out a $62 million rebate program for rooftop solar. The program outlines a rebate of 60 cents per installed watt, at a maximum of 10 kW or $6,000 for participating customers.

The settlement lowers the time period of the initiative to four years, as opposed to the initial 10, and cuts spending down to $2.5 billion, less than 1/5 of the original proposal. This will greatly reduce the potential rate increases seen by consumers, though it is unclear at the moment to what extent, if at all customers will see fixed rate increases in reference to the terms of the settlement.

In addition, Duke Energy has agreed to invest $25 million in electric vehicle charging stations through the settlement.