North Carolina appeals court weighs critical rooftop solar decision

In North Carolina, a group of environmental advocacy organizations appealed a ruling that allowed electric utility Duke Energy to make steep cuts to compensation for customers that export excess rooftop solar generation back to the grid. The rule, known as net metering, requires utilities to compensate solar owners for sending local, emissions-free energy to the grid. 

The coalition, which included Environmental Working Group and NC Warn, argued that state regulators violated House Bill 589, passed in 2017, which mandates the North Carolina Utilities Commission (NCUC) to perform a cost-benefit analysis of solar net metering. 

“Duke Energy leaders are clearly determined to destroy the competition posed by customer-owned, local solar,” said Jim Warren, director, NC Warn. 

Under Duke’s plan, which was enacted on October 1, net metering credit rates are cut from a value ranging between $0.05 per kWh and $0.20 per kWh to a low rate of only $0.03 per kWh. This damages the value of rooftop solar for North Carolina residents, making it harder for them to invest in emissions-free electricity generation, despite state goals to boost clean energy access. 

The rate case also enforces minimum bills on solar customers of $22 to $28 per month, even if 100% of their electricity demand is met by their own solar array’s production. 

Attorney Matthew Quinn argued in the court of appeals that savings for customers in North Carolina would drop as much as 31% under the new program. The commission’s public staff office calculated that a rooftop solar customer’s electric bill would increase between 16.5% and 118% under the appealed ruling, said Quinn. 

North Carolina Attorney General Josh Stein argued that the 2017 House Bill 589 mandates that the NCUC conduct an independent analysis of net metering rates, performing a comprehensive cost-benefit analysis. Depsite this, Duke Energy opposed requests for a commission-led study, and instead regulators were left with exclusively using internal Duke Energy data and calculations to assess net metering. 

Environmental and public interest groups argue the internal Duke calculations largely ignored any benefit of net metering or rooftop solar access. 

“Can Duke investigate itself? The commission’s legal conclusion was: ‘Duke, you are permitted to investigate yourself.’ Now, our position is that can’t possibly be what the statute means,” said Quinn. 

Appeals Judge Toby Hampson agreed the NCUC’s use of Duke’s internal cost-benefit analysis was a questionable path toward meeting its obligation to review net metering under the 2017 law. 

“Surely the utility can submit information, an analysis, an investigation that says here’s why we think we meet the costs/benefits analysis. But isn’t it the obligation of the commission, then, to actually undertake a review?” said Judge Hampson. 

The Appeals Court is expected to release a decision in the coming months. The hearing was streamed on YouTube and can be viewed here.