Duke Energy Carolinas (Duke Energy), a subsidiary of Duke Energy Corporation, said that it will not be able to proceed with its $50 million rooftop solar program unless North Carolina Utilities Commission (NCUC) removes restriction on the way the utility would recover the initiative's costs from customers. As per the company, the restrictions could cause Duke Energy to violate laws governing up to $250 million in energy-investment tax credits.
Violating the federal regulations would force the company to forfeit those federal tax credits. The forfeiture will include $125 million targeted for Duke Energy’s 825-megawatt Cliffside coal plant. On non-execution of the solar program, Duke Energy will not be able to meet new state requirements for solar energy production in 2010.
“That’s not a risk we can take,” Duke Energy’s Chief Strategy and Regulatory Officer Keith Trent, said. Without a change in the state requirements, “we are simply not going to be able to go forward with the program.”
The company asked the NCUC to rescind the restrictions.
NCUC had approved the solar program on December 31, 2008.
The company intends to build solar panels capable of producing 10 megawatt of power on customers property over the next two years.
NCUC order has set a limit to the amount of program’s costs Duke Energy can recover under the renewable-energy legislation the state adopted in 2007. Duke Energy may be able to recover the remainder of its expenses under normal rate-base filings, NCUC said.
The NCUC staffs who were assigned to protect customers interests, were worried that the rooftop program’s expense would drivethe company to the limit on costs before it produced the targeted amount of alternative energy.
Owen Smith, head of Duke Energy’s solar programs, said that the utility will have to ask the NCUC to delay the requirement that it produce solar energy in 2010 if the rooftop program is abandoned.
Duke Energy has asked the NCUC to expedite its request for reconsideration of the order.