NC regulators reject Duke’s grid investment proposal, limit fixed charge increase

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Grid modernization initiatives are often supported by the solar industry. So when solar advocates joined large power users and other stakeholders in opposing Duke Energy Carolinas’ Power/Forward program, it begged a deeper look.

Vote Solar has described the proposal as a “blank check” for Duke to make a ten-year investment in the North Carolina’s transmission and distribution (T&D) system, without much oversight. The group stated that the investments – which centered mostly on line maintenance and undergrounding of lines – were “far from an investment in the modern grid”, and further noted that none of the measures in Power/Forward were subject to cost/benefit analyses or compared with other measures for improving reliability and resiliency, including demand response, microgrids and storage.

It turns out that Vote Solar was not the only organization that found this proposal imprudent. Amid a large number of Duke Energy Carolinas proposals rejected by North Carolina Public Utilities Commission (NCPUC) last Friday was the mechanism for which the utility would have paid for its Power/Forward program.

The order states that Duke “failed to show that exceptional circumstances exist to justify the establishment of the Grid Rider for recovery of its Power Forward costs,” but also that the order would give the utility an unprecedented level of control over aspects such as how much and when spending on the program would occur.

Duke, for its part, states that it “intentionally designed the Power/Forward Carolinas plan with flexibility to accommodate changing customer needs, evolution of technology and the regulatory requirements under which we operate.”

Simultaneously, NCPUC did allow Duke to increase its fixed charges on residential customers, but only from $11.80 to $14.00, not the $17.79 that it had requested. Utilities across the nation have been seeking fixed charge increases, which allow them to claw back some of the revenue when their customers adopt rooftop solar under net metering, and also to slow the residential solar market by weakening the economics of customer- and third-party owned solar.

This follows a settlement earlier this month with NPUC wherein Duke agreed to reduce the amount of rate increases. According to Vote Solar, the original proposal would have increased rates on the average residential customer by 50%, and 40% for business customers.