Cooperatives & Clean Energy
How your cooperative complies with the North Carolina REPS program
North Carolina’s electric cooperatives are actively helping to broaden the use of renewable energy sources to generate electricity. Along with programs to help you use electricity efficiently, your co-op’s renewable energy initiatives help develop a growing clean energy industry as we advance toward a secure energy future.
Adopted by the state legislature and signed into law by Gov. Bev Perdue in 2007, the Renewable Energy and Energy Efficiency Portfolio Standard (REPS) sets standards and a schedule that electricity providers follow to add renewable energy to their “portfolio” of resources used to produce electricity. The REPS also includes provisions for energy efficiency programs aimed at reducing demand for electricity. North Carolina was the first Southeast state to adopt such a policy and is among 29 U.S. states with similar programs.
North Carolina’s program promotes use of specific renewable energy resources. Solar energy, poultry waste and swine waste are prioritized in the legislation, and its schedule requires the use of those resources to a specified extent. Other resources that comply include wind, hydropower, geothermal generation, wave or ocean current energy, biomass (including animal waste, wood products, energy crops and landfill methane gas), waste heat and hydrogen from renewable sources, and measurable renewable customer-owned generation sources.
The North Carolina Utilities Commission is charged with monitoring the REPS activities and ensuring that all electric utilities comply.
The schedule requires electric cooperatives and municipally owned utilities to show that 3 percent of the electricity they provide comes from renewable resources in 2012–2014. The required percentage rises to 6 percent in 2015–2017 and 10 percent in 2018 and beyond. Percentage requirements increase to 12.5 percent in 2021 for investor-owned utilities such as Duke Energy.
Utilities comply with the REPS law by acquiring Renewable Energy Certificates (RECs). One REC is created for every 1 megawatt-hour (1,000 kilowatt-hours) of electricity generated by a renewable energy source. Renewable generators report their REC production to the state, and once created, these RECs can be bought or sold. On an annual basis, the Utilities Commission verifies that each utility has an adequate inventory of RECs to comply with the requirement.
Electric cooperatives employ varying strategies to acquire RECs, to meet the REPS requirements. The primary strategy for the cooperatives has been to purchase RECs from renewable energy generation facilities. Cooperatives since 2008 have accumulated RECs from renewable energy facilities such as solar, wind and biomass power projects in order to add renewables to the energy supply. Most of the cooperatives’ acquisitions come from in-state renewable energy producers, but some come from producers outside North Carolina as permitted by the REPS law (up to 25 percent). A benefit of this strategy is to bolster the development of renewable energy facilities, providing jobs and improving North Carolina’s economy.
The legislature included provisions in the REPS law to limit the cost to electricity consumers by placing a cap on the amount utilities may incur and recover from consumers to comply with the law. For example, in 2012–2014, co-ops may not charge residential consumer-members more than $12 per year to acquire renewable energy, and no more than $34 per year after 2015. To date, co-ops have been able to meet REPS requirements without exceeding the cost cap, according to compliance filings with the Utilities Commission.
Another effective strategy the co-ops pursue in their REPS compliance is introducing various energy efficiency programs. Such programs must be approved by the Utilities Commission and must yield measurable efficiencies that the commission can verify. Some of the most successful co-op programs have resulted in widespread installation of efficient water heater kits and efficient lighting, as well as removing older second refrigerator-freezers from homes. Besides reducing overall power demand for these appliances, the programs also save consumers money on their power bills.