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7.24.20 - Partial Settlement with Duke

Updated: Aug 31, 2020

Hi PAYS® Pals, here's your weekly newsletter!

Partial Settlement with Duke Filed with the North Carolina Utilities Commission Yesterday for Developing a PAYS Pilot!

  • Our Fellow PAYS Pals at NCSEA and SELC reached a partial settlement with Duke that was filed with the NCUC yesterday that includes a commitment to work with NCSEA and SELC and their clients on developing a PAYS pilot. The dockets are attached!

  • Even though Duke would not fully commit to PAYS at this stage and included a lot of concerns that we know are not germane to PAYS (and will continue to delay implementation by slowing rolling out their new billing systems), our PAYS Pals will keep making the case for a permanent tariff!

  • Thanks to NCSEA, SELC, NC Justice Center, NRDC, SACE, and NC Housing Coalition for pushing back on Duke's original proposal.

  • Per the terms of the partial settlement, Duke Energy will now be required to:

    • Address grid congestion and other obstacles to distributed generation when planning future Grid Improvement Plan investments, which will greatly benefit utility-scale solar projects by enabling more solar projects to connect to the grid;

    • Work with the settling parties to craft low to moderate-income specific energy efficiency programs to propose to the North Carolina Utilities Commission (NCUC);

    • Contribute $6 million to the Helping Home Fund which offers energy efficiency assistance to low income households;

    • Develop hosting capacity analyses as part of its Integrated Systems Operations Planning program; and

    • Work with the settling parties to craft a tariffed on-bill pilot program, which may include the Pay As You Save® model, for proposal to the NCUC

      • Within six months of the effective date of this agreement, the Stipulating Parties agree to collaborate to design a tariffed on-bill pilot program, which shall include a Pay-As-You-Save® or other mutually agreeable alternative program design, for customers in North Carolina, addressing issues including but not limited to: (1) customer eligibility; (2) terms of the tariff and arrangement with the customer; (3) program safeguards for all customers and the Company; (4) utility company incentives; (5) ensuring a program would not result in DEP, or any parent or affiliate companies, becoming subject to state or federal banking, financial or similar laws or regulations; (6) ensuring that equipment can be tied to a meter, obligating a subsequent resident at that location to pay; (7) the Company’s rights in the event the customer does not pay the cost-recovery charge; (8) possible relevance of Commission Rule R8-68; (9) consequences of a customer removing the equipment before the upgrades are paid; (10) deployment of the pilot program post deployment of the Company’s Customer Connect program; and (11) ownership of the equipment if the customer pays the electric bill but is renting from the property owner.

      • Within 18 months of the effective date of this agreement, DEP agrees to either (1) file the pilot for approval with the Commission, provided the Stipulating Parties mutually agree to the terms of the pilot program that is not less than three years in length and, in conjunction with the concurrent commitment of DEC, includes a combined total of no fewer than 700 but no more than 1000 residential customers, or (2) file a status report with the Commission in this Docket.

  • In exchange, NCSEA and other settling parties agreed to:

    • Support Duke Energy’s request to be authorized to earn a return on equity (ROE) of 9.75 percent, which would apply to the common equity component of the capital structure, consisting of 52 percent equity and 48 percent long term debt;

    • Support specific components of Duke Energy’s Grid Improvement Plan which will enable the greater utilization of distributed energy resources; and

    • Not oppose the deferral of costs for other components of the Grid Improvement Plan unrelated to distributed energy resources while reserving the right to contest those costs in future rate cases.

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