N.C. power sector asks for delay in swine waste REPS requirement

By Erin Voegele | September 12, 2014

A group of energy suppliers in North Carolina recently filed a joint motion with the N.C. Utilities Commission asking that a provision of the state’s renewable energy and energy efficiency portfolio (REPS) related to energy from swine waste be modified and delayed.

The state’s REPS program currently specifies investor-owned utilities are subject to a 12.5 percent REPS requirement by 2021. That requirement ramps up from 3 percent in 2012 to 6 percent in 2015 and 10 percent in 2018. Electric membership corporations and municipalities are subject to a 10 percent REPS requirement in 2018, which ramps up from 3 percent in 2012 and 6 percent in 2015. 

North Carolina’s REPS program also includes specific provisions for solar energy, swine waste resources and poultry waste resources. The swine waste resources portion of the regulation states that by 2018, at least 0.2 percent of total electric power in kilowatt hours sold to retail electric customer in the state must be supplied, or contracted for supply in each year, by swine waste. The requirement scales up from 0.07 percent in 2012, to .014 percent in 2015, reaching 0.2 percent in 2018. A similar provision is in place for poultry waste resources. That provision sates that in 2014, at least 900,000 MWh of total electric power sold to retail customers in the state, or an equivalent amount of energy, must be contracted for supply in each year by poultry waste combined with wood shavings, straw, rice hulls or other bedding material. That requirement scaled up from 170,000 MWh in 2012, to 700,000 MWh in 2013, reaching 900,000 MWh in 2014.

Within the joint motion, the electricity suppliers ask the commission to relieve the swine waste requirements for 2014, delay the need to comply with the requirements until calendar year 2015 and allow the electric suppliers to bank any swine renewable energy certificates (RECs) previously or subsequently acquired for use in future compliance years. According to the filing, the electric suppliers have made reasonable efforts to comply with the swine waste component of the REPS and that relief is requested in the public interest. The joint filing also references an order approved by the commission earlier this year approving similar relief for the 2013 compliance year.

The filing describes good-faith efforts made by the state’s electricity suppliers to meet the requirements of the swine waste provisions. This includes engaging swine waste-to-energy developers, issuing requests for proposals, evaluating bids received, negotiating and executing long-term REC purchase agreements, processing interconnection requests from these generators, actively monitoring executed agreements and in some cases further modifying REC purchase agreements to provide developers reasonable opportunity for successful project execution. Even with these efforts, the electricity providers said they will be unable to collectively secure the RECs necessary to meet the aggregate swine requirements for 2014.

“The electric suppliers' procurement efforts with respect to swine waste-to-energy resources have been challenging from the outset, due to the small numbers of existing market participants in the United States and the fact that few, if any, of those market participants have direct experience developing or operating those biomass technologies used to generate electric power from swine waste. These factors have contributed to delays in development of this resource as well as the relatively high cost that will likely be required to ultimately develop and deliver RECs from swine waste fuel,” wrote the electricity suppliers in the joint motion.

The joint motion was filed by Duke Energy Carolinas LLC, Duke Energy Progress Inc., Virginia Electric.  Power Co., d/b/a Dominion North Carolina Power, GreenCo. Solutions Inc., Public Works Commission of the City of Fayetteville, EnergyUnited Electric Membership Corp., Halifax Electric Membership Corp., the Tennessee Valley Authority,  North Carolina Eastern Municipal Power Agency, and North Caroline Municipal Power Agency Number 1. A full copy of the joint motion can be downloaded from the NCUC website.