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N.C. Tightens Rules on Utility Promotional Programs

Fortnightly Magazine - January 1 1996

The North Carolina Utilities Commission (NCUC) has adopted a new set of guidelines to help settle disputes between electric and gas utilities over utility-sponsored promotional programs. It also established a rule for evaluating proposed incentive programs, approving a new food-service rate program designed by Duke Power Co. to encourage the installation of electric food preparation equipment in commercial kitchens. Piedmont Natural Gas Co., a natural gas local distribution company, had opposed the program, alleging that Duke could not compete with natural gas on a level playing field and was seeking to pay commercial establishments to use electricity.

The guidelines require utilities to show that incentive programs are cost-effective for all ratepayers. A sponsoring utility must bear the costs of incentives that affect a customer's decision to install electric or gas service, unless it can show that the incentive will encourage construction of dwellings and installation of appliances that are more energy efficient than those required by state/federal building codes and appliance standards. Electric and gas utilities may continue to promote and pay incentives for all- electric and all-gas structures, given NCUC approval, but may not require a builder to: 1) build a minimum number or percentage of all-gas or all-electric structures in a given subdivision or in total, 2) build any type of structure in a given subdivision development, or 3) advertise that the builder is exclusively all-gas or all-electric either for a particular subdivision or in general. Re Duke Power Co., Docket Nos. E-100, SUB 64A; E-100, SUB 71, Oct 24, 1995 (N.C.U.C.). Re Incentive Programs, Docket No. M-100, SUB 124, Oct. 24, 1995 (N.C.U.C.). t

Cases reviewed by Phillip S. Cross, an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

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