The North Carolina Utilities Commission has permitted the state's major investor-owned electric utilities to suspend their
existing avoided-cost rate offers for long-term power purchases from qualifying cogeneration facilities, pending regulatory review.
The commission said it would also review a proposal by North Carolina Power Co. to reduce the eligibility threshold for the avoided-cost rates from the current capacity level of 5,000 kilowatts, to only 100 kW.
Consumers Would Overpay. The utilities had argued that technological advances and other factors "are continuing to reduce the cost of capacity," and that current "avoided-cost" rates exceed true avoided costs. Consumers will overpay if utilities must buy from QFs at the old rates, the utilities said.
EEI Survey. North Carolina Power had cited a survey by the Edison Electric Institute showing that a number of states had tightened the capacity limits for QF avoided-cost offers. The commission noted that another utility, Duke Power Co., had proposed to eliminate long-term (10- and 15-year) levelized contract options currently available to the QFs. Re Avoided-Cost Rates for Electric Utility Purchases from Qualifying Facilities, Docket No. E-100, Sub 79, Dec. 12, 1996 (N.C.U.C.). t
Phillip S. Cross is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.
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