By Heather Payne
Assistant Director for the Center for Climate, Energy, Environment, and Economics (CE3), and Adjunct Professor at UNC School of Law
In late June as the legislative session was winding down, the North Carolina General Assembly approved a major energy bill that will fundamentally alter the renewable energy market in North Carolina.
The bill, House Bill 589, Competitive Energy Solutions for NC, was the product of a lengthy stakeholder negotiation process between utility representatives, solar developers, and multiple other organizations.
House Bill 589 includes a number of policy provisions, but at its core modifies how North Carolina will implement the Public Utility Regulatory Policies Act (PURPA)—a federal law passed in 1978 that was intended to spur the growth of small power producers. Even with these changes, PURPA still applies: it created and encouraged a market for power from non-utility power producers; required utilities to take power from qualifying facilities (QFs) of 80 MW or less; and those QFs are paid for their power at avoided cost. Implementation of PURPA was left to the states, and the North Carolina Utilities Commission had chosen to implement PURPA with conditions, including a standardized contract for installations up to five megawatts, that helped utility-scale solar generation thrive in our state. North Carolina is now second only to California in the amount of installed solar capacity.