Commissioner Christie’s Concurrence Concerning Rehearing of Duke Energy Progress-Edgecombe Affected Systems Order ER22-1807

Docket No. ER22-1807-001

I concur in today’s order due to its consistency with previously issued, related orders[1] relied upon by this order.  I wish, however, to mention several points. 

While I concurred in the April 2022 American Beech Rehearing Order, I made reference to comments raised by North Carolina Utility Commission Public Staff (NCUC Public Staff).[2]  Although those comments were rejected as made out-of-time,[3] I emphasized that “I write separately to highlight the arguments . . . raise important concerns regarding the Commission’s affected system pricing policies that merit further consideration by the Commission in a future generic proceeding.”[4] 

The North Carolina Utilities Commission (NCUC) and NCUC Public Staff have provided pertinent and noteworthy comments related to affected systems — with certain comments mentioning the Edgecombe project — in response to the Commission’s July 2021 Transmission ANOPR[5] and the April 2022 Transmission NOPR[6] regarding electric regional transmission planning and cost allocation and generator interconnection processes. 

For example, in response to the NOPR, NCUC and NCUC Public Staff filed joint comments noting, inter alia, that:

[T]he Commission’s crediting policy and affected system upgrade policy together, as applied to DEP, have created a burden on ratepayers in eastern North Carolina . . .  These customers do not benefit from the electricity generated by these facilities — but they do subsidize, significantly and unfairly, the developers’ ability to get the electricity to market.[7] 

In another example, NCUC comments to the ANOPR stated, inter alia:

. . . North Carolina has experienced significant growth in the development and interconnection of solar generation facilities . . . .  More recently, however, the state has begun to experience significant conflicts and cost allocation inequities with respect to new solar generating facilities located in the service territory of [Dominion Energy North Carolina (DENC)] and proposing to sell into the PJM markets.  These conflicts and inequities are a result of current FERC cost allocation policies that shift a significant portion of the costs of any necessary transmission system upgrades to DEP as an “affected system,” and thereby ultimately onto the retail customers of DEP who will realize no benefit whatever, direct or indirect, from the transmission investments DEP is required to make to accommodate that new generation and its interconnection to the DENC system . . . .  Retail ratepayers in the eastern portion of North Carolina — where, not coincidentally, incomes are some of the lowest in the state — are subsidizing interconnection customers whose generating facilities are built and operated to serve markets outside North Carolina.[8] 

In this same ANOPR filing, NCUC addressed the Edgecombe project specifically and noted: 

However, to elucidate, the Rocky Mount-Battleboro line is one of about a dozen connections between the systems of DEP and Dominion Energy. DEP owns approximately 8.5 miles at the end that terminates in Rocky Mount, and Dominion owns the Battleboro end of the line. Upgrading this line was not in DEP’s biennial Integrated Resource Plan. DEP’s North Carolina customers will receive no power from this generation and will receive no measurable or meaningful benefit from upgrading the line.  In fact, according to a complaint filed at the FERC, there was an alternative network upgrade that could have been constructed by PJM on its network for only $6.9 million.  Nevertheless, under current FERC policy DEP’s North Carolina customers will be responsible for the retail share of the $23 million in upgrade costs.  This outcome clearly violates the cost causation doctrine as stated in Illinois Commerce and other decisions.  And it is an outcome that threatens to become more and more common as solar developers seek to locate in eastern North Carolina, where land is cheap, the sun is plentiful, and access to the PJM market is reasonably direct.

If this Commission ends the participant funding model, even within RTOs and ISOs the practice of pushing transmission costs onto load serving entities that receive none of the benefits of the generation will become ubiquitous.[9]

As I noted in my concurrence to American Beech,[10] I believe the issues raised by NCUC and the NCUC Public Staff should be addressed in other proceedings.  And, as some of the NCUC and NCUC Public Staff’s comments suggest, certain of these issues have been raised in the ANOPR and NOPR dockets.  What those comments by NCUC and NCUC Public Staff tell me is that while today’s order suggests that benefits could be realized from network upgrades by the affected systems and customers of those systems, such a finding should not be simply assumed and a close review of a well-developed evidentiary record needs to be made before it can be stated as a finding of fact that any such benefit — and, more importantly, a specific quantification — result.  To that end, if other affected system upgrades come before the Commission in which it is questioned whether benefits result from any upgrade or whether such benefits are limited in scope, I would be interested in reviewing evidence and testimony in the record concerning whether benefits exist and, it so, in what scope or magnitude.

For these reasons, I respectfully concur.