Distributed Energy Resource Program

Note: A series of orders issued on July 15, 2015 in  Docket 2015-53-E, Docket 2015-54-E, and Docket 2015-55-E approved the incentive programs for South Carolina's Distributed Energy Resource Program. All incentives are retroactive to January 1, 2015.

In June of 2014 S.B. 1189 mandated the creation of a voluntary Distributed Energy Resource Program and mandated that the Public Service Commission develop new accompanying net metering rules. The legislation allows participating utilities to recover costs connected to meeting a 2021 target of 2% aggregate generation capacity from renewable energy sources. Facilities sized between 1 MW and 10 MW will make up 1% of aggregate generation (50% of the total target) while facilities sized under 1 MW will make up another 1% (another 50% of the total target). Twenty five percent of facilities under 1 MW must also be under 20 kW (12.5% of the total target). Renewable energy resources include solar PV, solar thermal, wind, hydroelectric, geothermal resources, wave and tidal resources, recycling resources, hydrogen fuel derived from renewable resources, combined heat and power derived from renewable resources, and biomass resources.

Once a participating utility satisfies the minimum 2% requirement, the utility may invest in renewable energy facilities between 1 MW and 10 MW with a cumulative installed capacity equal to one percent of the utility's previous 5 year retail peak demand average.

Voluntary distributed energy resource programs have been adopted by Duke Energy Progress, South Carolina Gas & Electric, and Duke Energy Carolina. Program descriptions and incentive are available in May 12th settlement agreements in Docket 2015-53-E (Duke Energy Progress), Docket 2015-54-E (SC G & E) Docket 2015-55-E (Duke Energy Carolinas)

S.B. 1189 mandates that the Public Service Commission (PSC) creates a program to offer nonprofits easier access to renewable energy and to incentivize residential customers to become customer-generators by purchasing or leasing renewable generation equipment. The PSC is empowered to determine the appropriate cost recovery for the utility by determining avoided and incremental costs, but must limit annual cost recovery costs to $12 for residential customers, $120 for commercial customers, and $1,200 for industrial customers.

The PSC will submit report to the General Assembly about the Distributed Energy Resource Program and net metering to the general assembly no later than July 31^st 2016. The program will expire on January 1, 2021, but cost recovery will be in effect until all costs are recovered.

Emerging program details will be recorded in PSC Docket 2014-246 E.

History

On August 8, 2005, President Bush signed the Energy Policy Act of 2005 (EPAct). Section 1251 of the EPAct required, inter alia, that each electric utility shall make available upon request net metering service to any electric consumer that the electric utility serves. The Commission was given two years from the date of enactment (due by August 8, 2007) to initiate a proceeding to consider this and other requirements of the Act. In December, 2005 the Office of Regulatory Staff petitioned the Commission to initiate such a proceeding, and a proceeding was commenced. After receiving 10 Petitions to Intervene and numerous comments submitted by the public, the Commission held a hearing in May 2007, resulting in Order No. 2007-618 .The Order accepted the joint proposal of the parties, with two exceptions. The proposal was to implement the same Net Energy Metering program in place in North Carolina at the time, which effectively required Net Energy Metering customers to be on a Time-of-Use (TOU) Rate. In no case would the charge to the customer be less than zero, and the credits generated above use would carry forward until being zeroed out in a year cycle. Residential customers would be limited to 20kW and non-residential to 100kW installations up to an aggregate maximum of .2% of South Carolina peak load. Under this proposal the Renewable Energy Credits would be granted to the utility. The first exception to the joint proposal required by the Commission is that customers should have the option to be on a flat rate rather than variable rate tariff. Consequently, the Commission required the utilities to propose tariffs that would allow consumers wishing to net meter the opportunity to do so without being on a TOU Rate or detail reasons why such a tariff would be infeasible. The second exception to the joint proposal was the Commission observation that while the Renewable Energy Credits were not then being traded, such credits might be traded in the future, at which time the Commission will revisit ownership interests in the Renewable Energy Credits. 

Additional subsequent hearings were held February 2008 and May 2008. After extensive public input, the Commission issued Order No. 2008-416 directing the utilities to 1) make net metering plans available to their customers no later than July 1, 2008; 2) to have trained and knowledgeable customer service personnel available to assist customers by July 1, 2008; 3) make explanations of their net metering programs available on their websites. Commission staff was instructed to schedule another hearing to review these programs in approximately one year. 

In June 2009, the Commission held the above-mentioned review hearing resulting in Order No. 2009-552. A comprehensive Settlement Agreement was filed, satisfying all parties to the proceeding. The Settlement Agreement stipulated that the regulated utilities must: 1) standardize the net metering program structure for uniformity among the three companies; 2) modify the flat rate option for residential customers to reflect 1:1 standard retail rate for excess energy credits; 3) eliminate standby charges for residential customers; 4) allow ownership of Renewable Energy Credits to be retained by the generator until a market is established, then annually grant credits associated with excess generation to the utilities; and 5) report annually the number of net metering customers by energy type. The parties also agreed that the net metering process should be reviewed within four years.

In 2013, a workshop to review Net Metering in South Carolina was scheduled by the Commission, but later deferred pending legislative action by the South Carolina General Assembly. The resulting legislation is the Distributed Energy Resource Program Act (Senate Bill No. 1189).