Duke wants to tax the sun

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Those in power fight longer wars, on many fronts. For instance, monopoly protected utilities pay actors, attempt to impose discriminatory charges on political opponents, they dismantle federal programs once they start to become effective – and are so confident in their monopoly protection that they and their allies will publicly flaunt their actions “for the express purpose of undercutting the viability of solar power.” It’s the seeming nature of those who wish to sustain their position beyond its time.

Duke Energy is seeking to add an “Integration Services Charge” to all future solar power projects, and those with “legally enforceable obligations” established after November 1, 2018. This means contracts established under the Public Utilities Regulatory Policies Act of 1978 (PURPA), as well as potentially projects under Duke’s Green Source Advantage (GSA) program, as well as anything in Duke’s Competitive Procurement of Renewable Energy (CPRE) program after the first tranche.

The utility commissioned a study from Astrape Consulting, that notes the “companies’ fleet resources must have sufficient flexibility to ramp up and down to accommodate fluctuations in solar output” and that “intermittent and nondispatchable resources have a direct impact on system operations, including costs”.

The Astrape consulting study proposed an ongoing Integration Services Charges of 0.110¢/kWh for Duke Energy Carolina (DEC) and 0.239¢/kWh for Duke Energy Progress (DEP). It was also suggested that the fees would increase towards a cap of 0.322¢/kWh in DEC territory and 0.670¢/kWh in DEP territory.

With the current rate paid to solar facilities with PURPA contracts about 3.5¢/kWh, this fee would cut compensation by 3.1% in DEC territory, and 6.8% in DEP territory. The charges will be allowed to increase to 9.2% of the value in DEC, and 19% in DEP territory. And since Duke is also, right now, pushing to lower the value paid to these facilities from the current 3.5¢/kWh, compensation would drop further.

It was noted that developers seeking to “reduce or eliminate” the fee should design a solar+storage system in a manner to eliminate additional ancillary services, including, “but not limited to, the relative capacity of the energy storage facility, operational control and performance requirements, as well as associated monitoring of the facility’s operations and remedies for failure to comply.”

The North Carolina Utilities Commission (NCUC) staff has already noted five concerns with the modeling and data assumptions used to develop the charge:

  1. The proposed SISC would refresh every two years, regardless of the contract term
  2. The Astrape Study models DEC and DEP as load islands
  3. When setting a benchmark for system reliability, Duke uses a “no solar” scenario
  4. Solar volatility was modeled using only one year of historical data
  5. The Astrape Study only reflects an increase in one type of ancillary service to address solar intermittency, and this particular category of ancillary service is exogenous to the model (forced)

Those projects who have contracted to sell their electricity prior to November 1, 2018 will be exempt from the charge.

Recently, pv magazine USA covered presentations on the value of solar+storage to the North Carolina power grid, and noted that Duke wasn’t paying these resources for the services they added to the grid.

 

Correction: This article was updated at 2 PM Eastern Time (U.S.) on July 15 to clarify that the charge would apply only to projects with legally enforceable obligations (LEOs), not all projects with PPAs.