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Energy Incentive Programs, North Carolina

Updated September 2008

Below you will find questions and answers regarding North Carolina's utility energy efficiency programs, including options for load management, demand response, and distributed energy resources, and information about state-sponsored energy efficiency programs.

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What public-purpose-funded energy efficiency programs are available in my state?

North Carolina's utilities do not currently offer efficiency programs open to federal customers, though this is expected to change soon (2009-2010).

What utility energy efficiency programs are available to me?

A limited number of utility energy efficiency programs—many informational and training—are currently available to federal customers, many by municipal utilities and rural electric cooperatives. See the state government section below for more information and access to a listing of these programs.

What load management/demand response options are available to me?

Duke Energy offers its large commercial customers the On-Site Generation Service Program (PDF 44 KB), which targets customers that do not currently own back-up generation but would like to. Duke will install, own, and operate new generators (300 kW or larger) for participants willing to let the company use them in times of grid stress or high wholesale prices. There is a monthly service fee for this rate based on the levelized cost to own and operate the equipment.

Real time pricing is available to Duke Energy's large customers through its NC Hourly Pricing for Incremental Load (PDF 36 KB) rate schedule. Customers are notified of the hourly energy prices for the following day. Participants are alternatively credited or charged, based on the hourly price, for usage below or above a pre-determined customer baseline load profile.

Progress Energy (Carolina Power & Light) provides an optional real-time pricing tariff (PDF 104 KB) to large customers (1,000 kW). Participants are notified a day in advance of the hourly energy prices for the following day, and are charged or credited at these rates for any usage above or below either their actual predicted load or a customer-selected "pricing baseline." The latter option permits participants to hedge part of the additional risk of real-time pricing, but involves a fee.

Progress also offers several discounted curtailable and dispatchible riders for customers that can shed load upon request. These rate riders offer favorable terms for general-use electricity in exchange for dedicated load that can be reduced at the company's request.

Dominion offers its Day Ahead Hourly Pricing (PDF 16 KB) (Rider RTP) program for customers larger than 5,000 kW. Customers are notified a day in advance of the hourly energy prices for the following day.

The PJM Interconnection (PJM), a regional transmission organization (RTO), offers several demand response programs, three of which may be attractive to federal facilities that fall within the PJM footprint (northeastern NC):

• The Economic Load Response program allows electricity users to provide load reductions in exchange for a payment based on hourly wholesale electricity prices. Participation is fully voluntary. Program participants have the choice of two options: the Real-Time or Day-Ahead Option. In the Real-Time Option, participants can decide at any time to provide load curtailments (with one hour notice to PJM), and receive payment based on the real-time electricity price (minus their retail rate for generation and transmission). In the Day-Ahead Option, participants submit load reduction bids (of at least 100 kW) into the day-ahead energy market. Participants whose bids are accepted are paid for their load reductions based upon the day-ahead, hourly electricity market prices (also with their generation and transmission rates subtracted). Reductions are figured based on a "customer baseline load" (CBL), essentially the average load levels for the same hours in four of the facility's previous non-responding days. Retail electricity customers can participate in the program through any existing PJM Member, such as their utility, a third-party electricity supplier, or a specialty "curtailment service provider" (CSP); they may also participate directly by becoming a "Special Member" of PJM. Regardless of which type of firm it is, the CSP will generally offer to split the revenues with the customer at a pre-determined percentage. Customers on real-time (hourly) electricity pricing can participate, but at much less attractive remuneration terms (since they are already exposed to market electricity rates).

• The Emergency Load Response program (energy only) provides participants with a payment representing the marginal cost of power at the nearest hub on the PJM system (the locational marginal price, or "LMP") for providing load reductions when notified by PJM of a system emergency. Compliance with any load reduction request is voluntary; no penalties are assessed if a participant decides not to respond. Retail electricity customers may participate through any PJM Member (for example, their utility, third-party electricity provider, or an independent CSP) or directly, by registering as a Special Member with PJM. While the remuneration can be very high in an event, the emergency program is rarely called (only five times over the past three summers, and each time only in certain zones). However, emergency program customers may also participate in the economic program (above), as long as reductions are not credited toward both programs simultaneously.

• PJM's Interruptible Load for Reliability (ILR) offering is an emergency "capacity" program in which participants pledge to either reduce their load by a specified amount (guaranteed load drop, GLD) or to a specific kW level (known as firm service level, FSL) within one or two hours of an event notification. Load reductions are mandatory and may occur up to ten times per year, lasting up to six hours per event. Penalties for non-compliance are substantial. Participants must register by March 2, 2009 (and should start sooner since registrations must be cleared by their third-party electricity providers and distribution utilities). Remuneration is based on the results of annual capacity auctions in various PJM regions, but ranges from about $40 to $80/kW (depending on the zone and year) through 2011-12. Most participants are also eligible to receive energy payments for actual reductions, if and when the program is called.

In all three programs, participants can provide load reductions either through curtailing electricity use or operating on-site generation consistent with local environmental regulations and permits.

What distributed energy resource options are available to me?

The Database of State Incentives for Renewable Energy (DSIRE) provides information on programs that offer incentives for renewable distributed generation. The following programs may be of interest to federal customers.

The NC GreenPower Production Incentive offers payments per kWh produced to producers of electricity from solar, wind, biomass, and small (< 10 MW) hydropower installations. NC GreenPower, an independent non-profit created by numerous stakeholders to promote renewable generation throughout North Carolina, issues periodic RFPs based on consumer demand for renewable electricity in the state, but owners of sub-10 kW PV and wind systems can apply at any time. Remuneration rates vary by technology and time, but were recently about $0.20/kWh for PV-generated electricity and $0.10/kWh for wind power.

Through the Green Power Switch Generation Partners Program, TVA will purchase the output of a solar photovoltaic installation of up to 50 kW (though larger systems may be approved on a case-by-case basis) at $0.20/kWh for ten years. Purchases must be brokered by a participating power distributor (generally, utilities in the TVA territory).

Are there energy efficiency programs sponsored by the state government?

The Energy Office in the North Carolina Department of Administration offers several energy efficiency and renewable energy programs. A list of available programs—mostly informational but also some technical assistance—offered by the office is available through their web site.

What additional opportunities are available to me?

Federal customers also have energy efficiency opportunities available with utilities (e.g., Carolina Power & Light and Duke Energy) that have area-wide contracts with GSA and, by extension, all other federal agencies. Federal facilities should contact their account executive to determine the level of participation by their local utility.

NOTE: Energy efficiency funds and demand response programs are updated at least annually. Please contact the FEMP webmaster if changes are needed between updates.