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State ex rel. Utilities Commission v. North Carolina Sustainable Energy Association

Court of Appeals of North Carolina

August 1, 2017

STATE OF NORTH CAROLINA EX REL. UTILITIES COMMISSION; PUBLIC STAFF - NORTH CAROLINA UTILITIES COMMISSION; DUKE ENERGY CAROLINAS, LLC; DUKE ENERGY PROGRESS, LLC; SOUTHERN ALLIANCE FOR CLEAN ENERGY, Appellees,
v.
NORTH CAROLINA SUSTAINABLE ENERGY ASSOCIATION, Appellant.

          Heard in the Court of Appeals 3 May 2017.

         Appeal by appellants from order entered 6 June 2016 by the North Carolina Utilities Commission Docket No. E-100, Sub 113.

          Staff Attorney David T. Drooz, for Appellee Public Staff - North Carolina Utilities Commission.

          Troutman Sanders, LLP, by Brian L. Franklin and Molly McIntosh Jagannathan, for Appellee Duke Energy Carolinas, LLC.

          Nadia L. Luhr and Gudrun Thompson, for Appellant North Carolina Sustainable Energy Association and Appellee Southern Alliance for Clean Energy.

          Peter H. Ledford, for Appellant North Carolina Sustainable Energy Association.

          MURPHY, Judge.

         Appellant North Carolina Sustainable Energy Association ("NCSEA") appeals from a ruling from the North Carolina Utilities Commission (the "Commission") that "a topping cycle CHP system does not constitute an energy efficiency measure under [ N.C. G.S. §] 62-133.8(a)(4), except to the extent that the . . . waste heat component is used and meets the definition of [an] energy efficiency measure in [ N.C. G.S. §] 62-133.8(a)(4)." We disagree and hold that, for the purposes of classifying a topping cycle CHP as an energy efficiency measure, N.C. G.S. § 62-133.8(a)(4) (2015) is unambiguous. A plain reading of the statute at issue includes the entire topping cycle CHP system.

         I. Background

         Combined heat and power ("CHP") systems generate both electricity and useable thermal energy in contrast to conventional power generation in which electricity is purchased from a central power plant, which is less efficient. Conventional power generation based on amount of fuel used to produce electricity and useful thermal energy is 45 % to 50% efficient, while CHP systems are typically 60% to 80% efficient.

         Topping cycle CHP systems burn fuel to generate electricity, and then some of the resulting waste heat is recovered and used as thermal energy. As of 7 August 2013, there were 62 topping cycle CHP systems in North Carolina.

         On 1 June 2015, NCSEA filed a Request for Declaratory Ruling asking the Commission to issue a declaratory ruling that:

A new topping cycle combined heat and power . . . system- including such a system that uses non-renewable energy resources-that both (a) produces electricity or useful, measureable thermal or mechanical energy at a retail electric customer's facility and (b) results in less energy being used to perform the same function or provide the same level of service at the retail electric customer's facility constitutes an "energy efficiency measure" for purposes of [ N.C. G.S] § 62-133.9 and Commission Rule R8-67.

         It also asked that, "if deemed necessary or helpful, " the Commission issue a ...


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