Duke Energy’s “Resource Acceleration” Green Tariff Option

In July, 2024, North Carolina regulators approved a controversial green tariff proposal from Duke Energy.

Green tariffs, which allow customers to opt into a utility program that purports to offer them 100% renewable energy, face an uncertain future in states where high renewable targets are already in place. Because utilities would be required to eventually procure 100% renewable energy, the customer’s purchase of green energy does not theoretically prompt any additional green energy to be built. Therefore, the customer’s claims of contributing to the renewable energy transition — the core environmental value of RECs — are problematic. See the attached brief below by the Center for Resource Solutions, the nonprofit that certifies voluntary renewable energy purchase programs, on the need for additionality in Renewable Energy Credit contexts.

The tariff approved in North Carolina would blunt that criticism of its program somewhat by allowing a two-year lag before green tariff purchases are counted towards the utility’s regulatory obligation, at least for a portion of tariff participants. That nuance may allow some customers to claim that their purchase accelerated renewable development by two years. The Utility Commission held that this change was an ​“improvement” because the change ​“adds additional accelerated capacity” of renewable energy.

The revised tariff’s ​“resource acceleration option” allows large customers to advance about 150 megawatts of solar energy each year by sponsoring projects not selected in the company’s annual competitive bidding process. Every two years, Duke gets retroactive credit for this ​“extra” solar as part of its compliance with the 2021 law. This option is limited, however, to 1 gigawatt of clean energy over 10 years, or a fifth of the entire program. Therefore, 80% of tariff customers would not be effectively contributing to the state’s renewable transition.