BEFORE THE NORTH CAROLINA UTILITIES COMMISSION

In the Matter of Biennial Determination of Avoided Cost Rates for Electric Utility Purchases from Qualifying Facilities - 1998

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ORDER ESTABLISHING BIENNIAL PROCEEDING REQUIRING DATA AND SCHEDULING PUBLIC HEARING

        BY THE COMMISSION: These are the 1998 biennial proceedings held by this Commission pursuant to the provisions of Section 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA) and the Federal Energy Regulatory Commission (FERC) regulations implementing those provisions which delegated to this Commission certain responsibilities for determining each utility's avoided costs with respect to rates for purchases from qualifying cogenerators and small power production facilities.

        These proceedings are also being held pursuant to G.S. § 62-156 which requires this Commission to determine the rates to be paid by electric utilities for power purchased from small power producers as defined in G.S. § 62-3(27a).

        In order to facilitate the determination of avoided cost rates, the Commission is of the opinion that the present Order should be entered at this time in order to establish a schedule for the 1998 biennial determination of such rates in this docket. Carolina Power & Light Company (CP&L), Duke Power Company (Duke), Virginia Electric and Power Company d/b/a North Carolina Power (NC Power), Nantahala Power and Light Company (Nantahala), and Western Carolina University (WCU) should be parties to these proceedings.

        The Commission has determined that it shall attempt to resolve all issues arising in this docket based on a record developed through public witness testimony, statements, exhibits and avoided cost schedules verified by persons who would otherwise be qualified to present expert testimony in a formal hearing, and written comments on the statements, exhibits and schedules, rather than a full evidentiary hearing for the purpose of receiving expert testimony. The Commission believes this procedure is appropriate given the recurring nature of the issues and decisions which have traditionally arisen in these proceedings, the introduction of Federal legislation which would repeal PURPA if enacted, the recent FERC rules designed to move the electric industry to a more competitive environment, and the investigation of electric industry restructuring by a Study Commission of the General Assembly.

        IT IS, THEREFORE, ORDERED as follows:

        1.         That CP&L, Duke, NC Power, Nantahala, and WCU are hereby made parties to these proceedings;

        2.        That CP&L, Duke, NC Power, Nantahala, and WCU's filings shall include the following:

a.        A set of proposed rates for purchases from qualifying facilities, showing all calculations for deriving said proposed rates, including inflation rates and discount rates used, and

b.        Proposed standard form(s) of contract between qualifying facilities and the utility, describing any differences between said proposed standard form(s) of contract and the currently approved standard contract, including the reasons for such differences;

        4.        That other persons desiring to become parties to these proceedings may petition the Commission for leave to intervene on or before January 8, 1999;

        5.        That all parties, other than the five electric utilities herein, shall file with the Commission the statements and exhibits that they wish to present in these proceedings on or before January 8, 1999;

        6.        That the electric utilities and intervenors shall file comments on the statements and exhibits on or before February 5, 1999;

        7.        That parties are requested to file proposed orders on or before March 5, 1999;

        8.        That a public hearing solely for the purpose of taking nonexpert public witness testimony is hereby scheduled to begin on Tuesday, February 2, 1999, at 9:30 a.m., in Commission Hearing Room 2115, Dobbs Building, 430 North Salisbury Street, Raleigh, North Carolina; and

        9.        That CP&L, Duke, NC Power, Nantahala, and WCU shall publish, at their own expense, in newspapers having general circulation in their respective North Carolina service areas, the Notice of Public Hearing attached hereto as Appendix A once a week for two successive weeks, beginning with the week of November 6, 1998, and shall submit Affidavits of Publication to the Commission no later than the date of the hearing.

        ISSUED BY ORDER OF THE COMMISSION.

        This the 22nd day of July, 1998.

je071698.01 

BEFORE THE NORTH CAROLINA UTILITIES COMMISSION

In the Matter of Biennial Determination of Avoided Cost Rates for Electric Utility Purchases from Qualifying Facilities - 1998

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NOTICE OF PUBLIC HEARING

        NOTICE IS HEREBY GIVEN that the North Carolina Utilities Commission has scheduled a public hearing in this docket which will commence on Tuesday, February 2, 1999, at 9:30 a.m., in Commission Hearing Room 2115, Dobbs Building, 430 North Salisbury Street, Raleigh, North Carolina, for the purpose of taking nonexpert public witness testimony as a part of its 1998 biennial determination of avoided cost rates for purchases of electricity by the electric utilities who are parties to this docket from qualifying cogeneration and small power production facilities. The electric utilities who are parties to this docket are Carolina Power & Light (CP&L), Duke Power Company (Duke), Virginia Electric and Power Company d/b/a North Carolina Power (NC Power), Nantahala Power and Light Company (Nantahala), and Western Carolina University (WCU).

        The Public Utility Regulatory Policies Act of 1978 (PURPA) requires electric utilities
to offer to purchase electric energy from cogeneration and small power production facilities which obtain qualifying status under PURPA. The rates for such purchases shall be set by the state regulatory authority, shall be just and reasonable to the ratepayers of the electric utility and in the public interest, shall not discriminate against qualifying cogenerators or qualifying small power producers, and shall not exceed the incremental cost to the electric utility of acquiring alternative electric energy. As a part of its responsibility in these matters, the North Carolina Utilities Commission determines on a biennial basis the avoided cost rates and conditions for the purchase of electricity by electric utilities from qualifying cogeneration and small power production facilities in North Carolina.

        In addition to the requirements of PURPA, North Carolina General Statute 62-156 requires the North Carolina Utilities Commission to determine the rates and contract terms
to be observed by electric utilities in purchasing power from small power producers as defined in G.S. § 62-3(27a). The rates established pursuant to G.S. § 62-156 shall not exceed, over the term of the purchase power contract, the incremental cost to the electric utility of the electric energy which, but for the purchase from a small power producer, the utility would generate or purchase from another source.

        The purpose of the hearing cited in this Notice is to consider revision of the avoided cost rates and contract terms previously set by the Utilities Commission for the purchase of electricity by the electric utilities who are parties to this proceeding from qualifying cogeneration and small power production facilities in North Carolina.

        The Public Staff is required by statute to represent the using and consuming public in proceedings before the Commission. Written statements to the Public Staff should include any information which the writer wishes to be considered by the Public Staff in its investigation of the matter, and such statements should be addressed to Mr. Robert P. Gruber, Executive Director, Public Staff, Post Office Box 29520, Raleigh, North Carolina 27626-0520.

        The Attorney General is also authorized by statute to represent the consumers in proceedings before the Commission. Statements to the Attorney General should be addressed to The Honorable Michael F. Easley, Attorney General , c/o Utilities Section, Post Office Box 629, Raleigh, North Carolina 27602.

        Written statements are not evidence unless those persons appear at a public hearing and testify concerning the information contained in their written statements.

        Any person desiring to intervene in the matter as a formal party of record should file a motion under North Carolina Utilities Commission Rules R1-6, R1-7, and R1-19 no later than January 8, 1999. All such motions should be filed with the North Carolina Utilities Commission, Post Office Box 29510, Raleigh, North Carolina 27626-0510. The comments and exhibits to be presented in this proceeding by parties other than CP&L, Duke, NC Power, Nantahala, and WCU must be filed with the Commission no later than January 8, 1999.

        ISSUED BY ORDER OF THE COMMISSION.

        This the 22nd day of July, 1998.

JE071698.01 

NOTE TO PRINTER: Cost of Advertising will be paid by Applicant. It is required that an affidavit of publication be submitted to the Commission by the Applicant.