Duke Energy Progress to Recoup DERP Costs via Rateholder Charges

Duke Energy Progress, the South Carolina Office of Regulatory Staff (ORS), and Nucor Steel-South Carolina filed a settlement agreement with the Public Service Commission of South Carolina (Docket No. 2015-1-E) on November 18 delineating what the utility can charge ratepayers  – Nucor, among them – to recoup incremental and avoided costs connected to administration of the state’s Distributed Energy Resource Program ( DERP).

As part of Act 236, the Distributed Energy Resource Program Act of 2014, residential and business customers have been offered several programs by Duke Energy Progress, including:

• Rebates for customers installing small-scale solar facilities;
• A Shared Solar Program for those who often are unable to participate in renewable energy options – such as renters, nonprofit organization, and community centers; and
• Partnerships with developers to provide large-scale solar facilities, which would significantly expand the availability of solar for all residential, commercial, and industrial customers.

In the filing, ORS states that it has analyzed the actual DERP incremental costs that Duke Energy Progress incurred for the period of March 2014 through June 2015; as well as the forecasted costs for the period, July 2015 through June 2016. Based on that study, ORS “agrees with and accepts Duke Energy Progress’ reported cumulative DERP incremental cost totals through June 2015 and approximately $1.5 million through the June 2016 billing period.”

The “appropriate” fixed charges-per-account to recover those incremental costs, for the period beginning with the first billing cycle after commission approval and extending through the last billing cycle of June 2016 have been set at : $.058/month ($6.91/year) for residential customers; $1.22/month ($14.64/year) for general/lighting commercial customers, and a heftier $46.73/month ($560.81/year) for industrial customers.

No DERP avoid costs were incurred as of June 2015 and Duke Energy Progress does not anticipate incurring any until June 2016.

The parties  have agreed that, in an effort to keep them and the utility’s ratepayers informed of the over/under recovery balances related to DERP incremental costs, Duke will provide to ORS, Nucor, and, where applicable, to its customers, forecasts of the expected DERP charge to be set at its next annual fuel proceeding, based upon Duke’s historical over/under recovery to date and its forecast of DERP incremental and avoided costs.

According to a report published in SNL, any utilities participating in DERP must develop renewable energy facilities by 2021, and get at least 2 percent of their previous five-year-average peak demand from renewable resources. The legislation also requires utilities to offer incentives to encourage customers to “purchase or lease renewable energy facilities” to offset energy costs.