House Bill 589, which overhauls the regulations surrounding utility procurement from independent power producers, passed in the wee hours this morning and heads to Gov. Roy Cooper for his signature.
The year was 1978. “MacArthur Park” (Donna Summer) was about to become the No. 1 single on the Billboard charts, supplanting “You Needed Me” by Anne Murray. And on Nov. 9, Congress passed a law that made barely a ripple in the public consciousness at the time: The Public Utility Regulatory Policies Act (PURPA).
Forty years later, that law is at the heart of a debate over how utilities should procure electricity from small independent power producers (IPP). How the debate resolves could affect solar’s growth around the country – especially in North Carolina, where a bill designed to revise PURPA procurement rules is on the way to Gov. Roy Cooper for his signature.
Under House Bill (HB) 589, passed in the wee hours today as the legislative session comes to a close, PURPA contract lengths will be reduced from 15 years to 10 years and will limit fixed-price PURPA contracts to solar and other non-hydro renewable energy projects under 1 MW, down from 5 MW previously.
“The passage of HB 589 provides North Carolina with a more cost-effective means of expanding solar energy,” said Randy Wheeless, Duke Energy communications manager. “Customers will benefit from the market-driven aspects of the bill and the increased options they’ll have with their energy decisions.”
North Carolina currently hosts the most PURPA-related solar projects in the country, which has led to North Carolina’s position as the nation’s second-largest solar market in 2014. But the state’s largest utility, Duke Energy, has long argued that the length of PURPA contracts – 15 years – locks them into electricity rates that become untenable over their term as rates continue to go down, making such projects economically untenable.
The governor has up to 30 days to sign the bill.
PURPA was passed in between the 1973 and 1979 oil crises in the hopes that it would reduce U.S. dependence on foreign oil sources (and the market instability acquiring oil from those countries sometimes fossil fuels by promoting energy efficiency and renewable energy. It significantly changed the relationship between utilities and their customers by creating a market for independent power producers (IPPs) which according to the Union of Concerned Scientists accounts for 7% of the country’s power.