LETTER OF TRANSMITTAL
July 7, 2016
The Honorable Pat McCrory
The Governor of North Carolina
Raleigh, North Carolina
Dear Governor McCrory:
We hereby present for your consideration the 2015 Report of the ·North Carolina Utilities
Commission pursuant to Section 17 of the Public Utilities Act of 1963 as amended in 1977 (G.S.
62-17). The report covers the major activities of the Commission through December 2015 with
statistical and analytical data for the operations of the utilities through 2014.
Respectfully submitted,
Edward S. Finley, Jr., Chairman
Bryan E. Beatty
Susan W. Rabon
ToNola D. Brown-Bland
Don M. Bailey
Jerry C. Dockham
James G. Patterson
Prepared by
North Carolina Utilities Commission
Fiscal Management Division
4325 Mail Service Center
Raleigh, NC 27699-4300
Telephone No. 919-733-7680
TABLE OF CONTENTS
Chapter
I.
11.
Ill.
IV.
Letter of Transmittal
Organization and History
A. Commission Staff and Organization Chart
B. Biographical Sketch of Each Commissioner
C. Biographical Sketch of Executive Director Public Staff
D. Public Staff and Organization Chart
E. Historical Sketch of Development
Selected Commission Activities Through December 2015
A. General
B. Electric
C. Consumer Pocketbook Issues
D. Regulatory Fees
Summary of the Commission Activities and Operations--2014 and Prior Years
A. Overview of Size, Operating Results, and Number of
Companies Regulated
B. Commission Case Load: Formal and Informal Hearings
C. General Impact of the Regulated Utilities on the
Economy of North Carolina in 2014
The Electric Power Industry
A. General Comments
B. Renewal Energy and Energy Efficiency
C. Retail Customer Growth--Comments
D. Annual Customer Use
E. Comparisons of Average Residential Monthly Bills
F. Advanced Energy Corporation
G. Source and Disposition of the Electric Operating Revenue Dollar
H. Energy Sales
I. Statistical Summary Data
Page
1
2
7
11
12
13
25
26
26
29
30
34
35
35
36
40
48
49
55
55
55
55
56
56
56
TABLE OF CONTENTS--Continued
Chapter
V. The Natural Gas Industry
A. A Brief History of the North Carolina Natural Gas Industry
B. Plant Investment and Expansion
C. Growth Trends--Customers, Revenues, Volume
D. Comparisons of Residential Bills, Usage, and Cost per Dekatherm
E. Natural Gas Ratemaking: General Rate Cases, Tracking Mechanisms,
Hedging, and Deferred Accounts
F. Natural Gas Pipeline Safety
G. Source and Disposition of the Gas Revenue Dollar
H. Statistical Summary Data
VI. The Communications Industry
A. Brief Review of the Telephone lndustry--General
B. Customer Growth and Impact on Plant Investment
C. Extended Area Service (EAS)
D. Telephone Rates--Comments
E. Statistical Summary
VII. Water and Sewer Companies
A. General Comments
B. Commission Activities
C. Water and Sewer General Statute Requirement and Authorization
D. Regulated vs. Nonregulated Monthly Charges
E. Statistical Summary Data
VIII. The Transportation lndustry--Household Goods Movers
A. Legislative Action
B. Duties of the Operations Division, Transportation Section
C. Commission Activities
D. Summary of Operating Data
ii
Page
69
70
71
71
72
72
73
74
74
92
93
95
95
96
96
101
102
102
103
103
103
120
121
121
121
121
TABLE OF CONTENTS--Continued
Chapter
IX. The Transportation lndustry--Motor Passenger Carriers
A. General Comments
B. Regular Route Passenger Carriers
C. Preemption of Regulation over Motor Carriers of Passengers in
Charter Bus Transportation
D. Ferryboat Passenger and/or Vehicle Carriers
iii
Page
127
128
128
128
128
I. ORGANIZATION AND HISTORY
A. COMMISSION STAFF AND ORGANIZATION CHART
There were seven Commissioners and 57 Commission Staff positions as of January 1,
2015. Commissioners are appointed by the Governor subject to the confirmation by the
General Assembly by joint resolution.
NORTH CAROLINA UTILITIES COMMISSION
COMMISSION STAFF
Bryan E. Beatty
Commissioner
Susan Warren Rabon
Commissioner
ToNola D. Brown-Bland
Commissioner
Commissioners and Division Personnel
as of January l , 2015
Commissioners
Edward S. Finley, Jr., Chairman
Division Directors and Chief Clerk
Chief Clerk .. . . . .. . ... . .. .. . ...... ....... ... . . . ... . . . .
Don M. Bailey
Commissioner
Jerry C. Dockham
Commissioner
James G. Patterson
Commissioner
Gail L. Mount
Legal and Administration Division ......... ................. ....... Sam Watson
Operations Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Donald R. Hoover
Fiscal Management Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Patricia R. Jeter
2
FIGURE NO: 1-1
COMMISSION STAFF-ORGANIZATION CHART
November 24, 2014
North Carolina Utilities
Commission
P<1tnc:iJ J~ter
5t ;;'r.Ot~·r£
Nov~mber 24. 2014
.!);•!t'
DM M. ea11~-v .laii'IM G, hW!flA)I\
C<irllrnnsl1>ner C<1r11 mi;slDner
VacHt
Mrn. s.icrecary Ill
E.dw;rord S. Finley Jr.
Chairman
Jany c.. Dodlhlm
Com111r~:..iane-1
V.t•Jl.t
Adm.Stcret<iry Ill
Klmb.rlv ~mpl>.ll
t :>:ecutl'ie o\ s~. I
s.i~~ll w. R;ibon ~llE.Botty
C:ornrniss1o"~ r Com rn!sslooer
l\~~I Lno M;roliua W..twn
Mm 5ecretarv 111 Adrn. St:'<r!!l•ry lll
10NcllD.
lli'~il
Ct\nlmisSIOOo!'!f
Vuo<1t
Adm.Secr"1<irvlll
Don 1-toover
Utill;ir<. Opcr.tmns
l'lm:tnr
... t .lcr!H
Ao:-rn1mting
t.fa~/ Dir cHfN>.
:S•mW.rtsoc!
f>Nu;rnlfor.\ICI&
Orrcior
MonaRIWM
Mm.SE<f(!(dlYll
B11"1Citt
l\sst. Ope'at\ans
Dlre::tor
Georg• Scm;oms
A-r.t.t)prr.itrons
D""'1Dr
William Gltmoite
;-sst Operati1>ns
Direct i>r
Fr•cb ttllburr'
Hnanclal :.rro11yrt
RoNldBJOWl'I
t oc;ln<> et"
Nlct1ett.rf;e5
tran;portatlCf'l
IJt!llU~ R<g, f)rectOf
J.e on~Elkins
omc.,A .. 1.111
Roy Eric-.
f in .. rrci~ I Analvn
8rid:etP•sch1I
F in 4nc.i~1 An~ly~
Klmb.rly~t-$
f1nanrf<ll Ar1i1l•r;t
John Mi ll
f~11Ni11g/Archi.
'Y.ir-nvi;ar
VitQl)ct
Office Asst. IV
C;roth«in~
Eostwuod
Fin~nd.al Aoa.ly~\
V.ant
Fin;on<J •.- 1 Ar>:>ly•t
S•lyCutk!
[1'18in..,r
H1rry llfv3nt
r rrgin!!l!C
Sltllhtri Wood
toglneEf"
Anna Williams
[u gine~
M;ary Ann Wein
P rr><;M5. k.\t. ill
Linda l'eo<li'n
Fm;i nc1;il Aniltt':'il
Vacant
Publir.1Jtiktt_,.
Arrnunt.-.nt
Mu~• Mlt~mb
Acct. I ech. ltt
3
GallM011o11t
IW51"6S Ofc
Plllet Norris
Adm Mst I
\\tah<!t D•Yi•
Pn>t es1 A>.>!.. V
Linnetta llire1tt
Prot.iss Afsc. V
J1.k1lelter111edy
Pl OC<!SS M;c. V
llrckil! COJI
PIOt<!SS l\SS1. V
:S1 nd~ TiDary
Prat<"<•. ~,t. V
KlmMioW!tll
(()Ort Heporter II
VUllf\t
l <.lurt Keoort.,.- 11
Vl!Qf\t
lO~rt R;!DQl't'!I II
Vll(at1t
Cc;urt Ho;>porter II
Lmr Needliam
rnro T":tr. M1~r.
Joful A. Mora1-$
Op~r & ~1'Stem
Anal1'St
vacatrt
Tech support
Speiiali;c
Tttnllta IOriU
Tei:h SLl ~O rt
An-alyst
P.aill'iril Swenson
Pri:<:"5• A.•1. II
llattv .lachon·H61ry
Pmsl'ilm A,i;1, •J
PofUa e.iirrlts
Process Asst. Y
il(imDulllev
S1alf Ath>rrrev
O..niolC<mrld
Staff Au orn"'f
Cor~ F"'t•r
StaH Attorne-1
IA!ll Gtl!eon
Senior /i.r:torn~ y
temu!I Hintorl
~~IN llttOtn€'(
1.
2.
3.*
4.
5.
6.
7.
8.
9.
*
10.
11.
12.
13.
14.
15.
FIGURE NO. 1-lA
LEADERSHIP OF STATE REGULATORY ACTIVITIES 1891-1933
James W. Wilson (1891-1896)** Railroad Commission of N. C.
Thomas W. Mason (1891-1894) Railroad Commission of N. C.
E. C. Beddingfield (1891-1896) Railroad Commission of N. C.
S. Otho Wilson (1895-1896) Railroad Commission of N. C.
L. C. Caldwell (1897-1898)** Railroad Commission of N. C.
Jonathan H. Pearson (1897-1898) Railroad Commission of N. C.
D. H. Abbott (1897-1903) Railroad Commission of N. C.
Franklin McNeill (1899-1911)** N. C. Corporation Commission
Sam L. Rogers (1899-1910) N. C. Corporation Commission
E. C. Beddingfield (1904-1908) N. C. Corporation Commission
Henry C. Brown (1910-1910) N. C. Corporation Commission
William T. Lee (1911-1932)** N. C. Corporation Commission
Edward L. Travis (1911-1916)** N. C. Corporation Commission
George P. Pell (1912-1932) N. C. Corporation Commission
A. J. Maxwell (1917-1928) N. C. Corporation Commission
Stanley Winborne (1929-1932)** N. C. Corporation Commission
(Mr. Winborne became Chairman of the N. C. Utilities Commission in 1933)
Note: The Utilities Commission was known as the Railroad Commission of North Carolina from
1891-1898, the North Carolina Corporation Commission from 1899-1932, becoming the North
Carolina Utilities Commission in 1933. See Section E (Historical Sketch of Development) for
additional information.
*Served at two separate times
**Served part of Commissionership as Chairman
4
FIGURE NO. 1-18
NORTH CAROLINA UTILITIES COMMISSION
COMMISSIONERS LISTED IN ORDER OF APPOINTMENT
APPROXIMATE YEARS OF SERVICE GIVEN IN PARENTHESES (PLEASE SEE NOTE)
* 1. Stanley Winborne (1933-1958)**
* 2. F. L. Seely (1933-1940)
* 3. Frank W. Hanft (1933-1940)
* 4. Fred C. Hunter (1941-1955)
* 5. Robert Grady Johnson (1941-1948)
* 6. Joshua S. James (1949-1953)
* 7. Edward R. McMahan (1949-1958)
* 8. Harry T. Westcott (1949-1972)**
* 9. Sam 0. Worthington (1952-1966)
* 10. Ralph Moody (1955-1957)
* 11. R. Lee Whitmire (1957-1958)
* 12. Clarence H. Noah {1958-1966)
* 13. Richard G. Long (1958-1960)
* 14. Thomas R. Eller, Jr. (1958-1968)
* 15. R. Brookes Peters (1960-1966)
* 16. John Worth McDevitt {1966-1973)
* 17. M. Alexander Biggs, Jr. (1967-1969)
* 18. Clawson L. Williams, Jr. (1967-1970)
* 19. Marvin R. Wooten (1968-1976)**
* 20. Miles H. Rhyne {1970-1973)
* 21. Hugh A. Wells (1970-1974)
* 22. Ben E. Roney (1973-1979)
* 23. Tenney I. Deane, Jr. (1973-1977)**
24. George T. Clark, Jr. (1974-1976)
25. J. Ward Purrington (1975-1977)
* 26. W. Lester Teal, Jr. {1975-1977)
27. Barbara A. Simpson (1975-1977)
* 28. W. Scott Harvey (1976-1977)
29. Dr. Robert K. Koger {1977-1988)**
30. Dr. Leigh H. Hammond (1977-1984)
* 31. Sarah Lindsay Tate (1977-1993)
32. Dr. Robert Fischbach (1977-1979)
* 33. John W. Winters {1977-1983)
* 34. Edward B. Hipp (1977-1989)
* 35. A. Hartwell Campbell (1979-1986)
5
FJGURE NO. 1-18 CONTINUED
NORTH CAROLINA UTILITIES COMMISSION
COMMISSIONERS LISTED IN ORDER OF APPOINTMENT
APPROXIMATE YEARS OF SERVICE GIVEN IN PARENTHESES (PLEASE SEE NOTE)
36. Douglas P. Leary (1980-1984)
* 37. Ruth E. Cook (1983-1991)
* 38. Charles E. Branford (1984-1985)
* 39. Hugh A. Crigler (1984-1985)
40. Julius A. Wright (1985-1993)
41. Robert 0. Wells (1985-1993)**
* 42. William W. Redman, Jr. (1987-1995)**
43. Charles H. Hughes (1989-1997)
44. Laurence A. Cobb (1989-1997)
45. Allyson K. Duncan (1991-1998)
46. Judy F. Hunt (1993-2001)
47. Ralph A. Hunt (1993-2001)**
48. Dr. John E. Thomas (1993-1994)**
* 49. Hugh A. Wells (1994-1996)**
50. Jo Anne Sanford (1995-2005)**
51. William R. Pittman (1997-2001)
52 .. J. Richard Conder (1997-2005)
53. Robert V. Owens, Jr. (1997-2010)
54. Dr. Robert K. Koger (1999-1999)
55. Sam J. Ervin, IV (1999-2009)**
56. Lorinzo L. Joyner (2001-2011)**
57. James Y. Kerr, II (2001-2008)**
58. Michael (Mike) S. Wilkins (2002-2005)
59. Howard N. Lee (2005-2009)
60. Dr. Robert K. Koger (2005-2005)
61. William T. Culpepper, Ill (2006-2013)
62. Edward S. Finley, Jr. (2007- )**
63. Bryan E. Beatty (2009- )
64. Susan Warren Rabon (2009- )
65. ToNola D. Brown-Bland (2009-
66. Lucy T. Allen (2010-2013)
67. Don M. Bailey (2013- )
68. Jerry C. Dockham (2013-
69. James G. Patterson (2013-
* Deceased
** Served part of Commissionership as Chairman
NOTE: Appointments for Utilities Commissioners have never been on a calendar year basis;
therefore, .the years of service given in parentheses represent the (a) year in which the
Commissioner was appointed, and (b) the year in which service ended.
6
B. BIOGRAPHICAL SKETCH OF EACH
COMMISSIONER
EDWARDS. FINLEY, JR., CHAIRMAN:
Chairman Finley was born in North
Wilkesboro, North Carolina. He holds a
Bachelor of Arts degree in history from the
University of North Carolina at Chapel Hill
and a Juris Doctor from the University of
North Carolina School of Law.
Between 1974 and 2007 he
practiced law in Raleigh, North Carolina,
with the firm of Joyner & Howison from
1974 to 1980 and the firm of Hunton &
Williams from 1980 to 2007, after a merger
of the two firms. His primary area of
practice was public utility regulation.
Governor Easley appointed Finley to
the Commission on January 23, 2007, to fill
a term that expired on June 30,
2011. Governor Perdue reappointed Finley
to the Commission effective July 1, 2011,
for a term that expires on June 30, 2019.
Governor Easley appointed Finley as
Chairman of the Commission on April 10,
2007, to fill a Chair term that expired on
June 30, 2009. Governor Perdue
reappointed Finley as Chairman effective
July 1, 2009, for a Chair term that expired
on June 30, 2013. Governor McCrory
reappointed Finley as Chairman effective
July 1, 2013, for a chair term that expires on
June 30, 2017.
Chairman Finley is active in
community and civic affairs. He and his
wife, Ginger, have two sons.
BRYAN E. BEATTY, COMMISSIONER:
Commissioner Beatty was appointed
to the North Carolina Utilities Commission
by Governor Mike Easley for a term that
commenced on January 7, 2009 and expired
on June 30, 2009. Governor Beverly Perdue
reappointed him for the term that
commenced on July 1, 2009 and ends on
7
June 30, 2017.
Born in Englewood, New Jersey and
a graduate of Salisbury High School in
Salisbury, North Carolina, he earned his B.A.
in Political Science from the State University
of New York at Stony Brook in 1980. Beatty
received his Juris Doctorate in 1987 from
the University of North Carolina School of
Law and is a 1981 graduate of the N.C. State
Bureau of Investigation Academy at
Salemburg.
Beatty served as the Secretary of the
N.C. Department of Crime Control and
Public Safety from 2001 until 2009 and was
in charge of the state's homeland security
coordination. He also served as director of
the State Bureau of Investigation from
October 1999 to January 2001.
During his tenure at the Department
of Justice, he also served as an SBI agent, an
associate attorney general representing the
UNC Hospital System, an assistant attorney
general in the Motor Vehicles section, the
state's first inspector general, and deputy
attorney general for policy and planning.
Beatty is the past chair of the State
Emergency Response Commission and
served on the N.C. Lottery Commission. He
has also served as a member of the
Governor's Crime Commission, on the
Board of Directors of the Criminal Justice
Information Network, and as chair of the
Governor's Terrorism Preparedness Task
Force.
Beatty received the National
Governors' Association Award for
Distinguished Service to State Government
in August 2003 for his leadership in North
Carolina's terrorism preparedness
efforts. In November 2002, he was
honored by the University of North Carolina
at Chapel Hill with the Harvey E. Beech
Outstanding Alumni Award, established to
recognize black alumni who are "stellar
leaders within the University community or
in his or her local community." In 2005,
Beatty received the Charles Dick Medal of
Merit Award from the National Guard
Association of the United States. Also, in
2005 he received the Distinguished Civilian
Service Award from the State of North
Carolina.
In 2008, Governor Mike Easley
awarded Beatty the Order of the Long Leaf
Pine, the highest service award that can be
given to a North Carolina citizen.
Beatty and his wife Rhonda have
three children, Bryan Jr., Nicole and
Michael.
SUSAN WARREN RABON, COMMISSIONER:
Commissioner Rabon was appointed
to the North Carolina Utilities Commission
by Governor Mike Easley and joined the
Commission on January 7, 2009. Her term
expires on June 30, 2015. She is a member
of the National Association of Regulatory
Utility Commissioners (NARUC) and is Co­Vice
· Chair of the Committee on Gas.
Commissioner Rabon also serves on the
Subcommittee on Pipeline Safety and on
the Washington Action Program.
Susan Rabon was born in Onslow
County, North Carolina and grew up in
Danville , Virginia where she attended
George Washington High School. She
graduated from North Carolina State
University summa cum laude with a B. A. in
Political Science and in 1986, received her
law degree from the University of Virginia
School of Law.
Upon graduation and admission to
the North Carolina State Bar, she clerked for
The Honorable Jack L. Cozort, North
Carolina Court of Appeals and then joined
private practice with the firm, Carr, Swails,
Huffine and Crouch in Wilmington, NC. In
1993, she joined the staff of the North
Carolina Department of Justice in Raleigh as
Special Counsel and in 1994 became Deputy
8
Attorney General for Administration. There
she oversaw the day-to-day operation of
the Department of Justice as Chief of Staff.
In 2001, she moved to the
Governor's Office as Senior Assistant for
Administration and served as one of the
Governor's top three advisors where she
oversaw the day-to-day operations of the
Governor's Office. She provided advice to
the Governor in many areas of state
government but particularly in the areas of
budget, personnel and technology.
Commissioner Rabon is a member of
the North Carolina State Bar and is a North
Carolina Certified Mediator. She is an active
volunteer in the schools and in other
community affairs, including previous
service on the North Carolina State
University Board of Visitors and currently
serves on Kraft YMCA Advisory Board and
the North Carolina State University College
of Humanities and Social Science Advisory
Board. She and her husband Tom have one
son.
TONOLA D. BROWN-BLAND,
COMMISSIONER:
Commissioner Brown-Bland was
appointed to the North Carolina Utilities
Commission by Governor Beverly Eaves
Perdue in 2009. She is the Immediate Past
President of the Southeastern Association
of Regulatory Utility Commissioners
(SEARUC). In addition, she is a member of
both the Energy Resources and the
Environment Committee and the Critical
Infrastructure Committee of the National
Association of Regulatory Utility
Com missioners.
A native North Carolinian,
Commissioner Brown-Bland is a Phi Beta
Kappa graduate of the University of North
Carolina at Chapel Hill, and she received her
Juris Doctorate from Duke University School
of Law.
Commissioner Brown-Bland began
her professional career as federal Law Clerk
to the Honorable Alexander B. Denson,
United States Magistrate Judge for the
Eastern District of North Carolina, and
thereafter entered private practice in
Greensboro, NC with the law firm Hill Evans
Jordan & Beatty (formerly Nichols, Caffrey,
Hill, Evans & Murrelle). After several years
engaging in general civil practice, she
became in-house attorney for AT&T Corp.
(subsequently Lucent Technologies), where
she was promoted to Senior Attorney and
primarily supported the company's federal
contracting and related commercial
technology licensing and business lines in
Greensboro.
Following relocation of much of the
Company's government business, Brown­Bland
joined the North Carolina
Department of the Secretary of State in
2001, serving as Director of the Business
License Information Office and of the
Charitable Solicitations Licensing Section. In
December 2002, Brown-Bland accepted a
position with the North Carolina Utilities
Commission as an attorney in the
Administrative Division. From 2005 until her
appointment to the Commission, she served
a.s Associate General Counsel with the City
of Greensboro.
Commissioner Brown-Bland has a
history of community and civic service,
having served on several boards including
the Greensboro Bar Association, the
Alamance County Historical Museum, and
Western Piedmont Residential Services, a
non-profit organization that provided
residential service to autistic adults. She
also presently serves as a member of the
Board of Trustees of her church. She and
her husband, Andre, reside in her native
Alamance County.
9
DON M. BAILEY, COMMISSIONER:
Commissioner Bailey was born in
Rutherfordton, NC and grew up in Shelby
and Lexington, NC. He is a graduate from
Lexington Sr. High School. In 1975 he
graduated with a BS Degree in Civil
Engineering from NC State University. He
also did graduate engineering course work
toward a MS Degree in Geotechnical
Engineering from the University of South
Carolina. Bailey is a Professional Engineer
licensed in North Carolina since 1979.
Commissioner Bailey is currently a
member of both the Electricity Committee
and the Critical Infrastructure Committee of
the National Association of Regulatory
Utility Commissioners.
Commissioner Bailey is retired from
ATI Allvac in Monroe, NC after a {31) year
career at this heavy industrial manufacturer
of Nickel Based Superalloys and Titanium
alloys. He held positions of Plant Engineer,
Director of Engineering, Director of Forge
Operations and General Manager of
Engineering while at the company. During
his entire career at the company, Bailey also
performed as the company's primary
Energy I Utilities Engineer as well as the
company's Environmental Engineer for the
first seven years in the company. During his
career as the head facility engineer, in
addition to supervising Design and Project
Engineers, he directed major project
management of large capital expansion
projects for the company.
Prior to working for ATI Allvac, for a
two year period Bailey was the Regional
Engineer for DENR's Land Quality Section in
Mooresville, NC. Before working for the
State of NC, Bailey was a Design Engineer
with the Engineering Dept. for the City of
High Point, NC working on new roadway
and storm water projects for three years.
Commissioner Bailey was appointed
June 17, 2013 by Governor Pat McCrory to
fill an existing vacancy on the Utilities
Commission with the term to expire June
30, 2017.
Bailey remains active in his church
and engineering societies of which he is a
member. Bailey and wife Brenda have two
married sons and three grandchildren.
JERRY C. DOCKHAM, COMMISSIONER:
Commissioner Dockham is a
lifelong resident of Denton, North
Carolina. He graduated with a Bachelor of
Science degree in Business from Wake
Forest University. Between 1972 to 2010,
he was the proprietor of Nationwide
Insurance Company in Denton, NC.
Commissioner Dockham was first
appointed to the North Carolina House of
Representatives in 1990, where he has
served twenty-three years. He most
recently served as Vice-Chair of the House
Committee on Public Utilities. He has also
served as Chairman of the Committee on
Insurance, as Vice-Chairman Committee on
Banking, and as a member on the
Appropriations Subcommittee on
Transportation, Commerce & Job
Development, and Education. In the past,
Commissioner Dockham has served on both
the Ethics and Rules Committees, and the
N.C. Electrical De-regulation Study
Commission. While serving in the General
Assembly, he was consistently ranked in the
top 10% (out of 120 members) by
N.C.F.R.E.E., and was named the 1998
Legislator of the Year by the N.C. Society of
Anesthesiologists. Dockham also received
the 1999 Emergency Medicine Advocate of
the Year Award by the N.C. College of
Emergency Physicians.
Commissioner Dockham is a Fellow
of the North Carolina Institute of Political
Leadership, a Trustee at Davidson County
10
Community College, from 1987 to present
and a member of NCSL (National
Conference of State Legislatures).
Commissioner Dockham is active in
many community and civic affairs. He is a
member of the Thomasville Chamber of
Commerce and for the past 35 years a
member of the Denton Lions Club.
He and his wife Louise have two
sons, Andy and Matthew and daughter-in­law,
Kelly. Commissioner Dockham is a
member of Central United Methodist
Church.
Governor Pat McCrory appointed
Commissioner Dockham to the N.C. Utilities
Commission effective July 1, 2013 for a
term to expire June 30, 2019.
JAMES G. PATTERSON, COMMISSIONER:
Governor Pat McCrory appointed
Commissioner Patterson to the North
Carolina Utilities Commission for a term
beginning July 1, 2013, and expiring June
30, 2019. Patterson's business career
spans over thirty years of experience
consulting with major corporate clients. He
is the founder of Patterson Partners, Inc., a
public relations and marketing firm. His
experience includes a broad category of
public relations counsel, marketing support,
fundraising, and crisis management. He has
also served in senior-level posts in higher
education.
Commissioner Patterson has served
on college and corporate boards. He also
served as Chairman of the Small Business
and Agricultural Council of The Federal
Reserve Bank of Richmond.
Before founding Patterson Partners,
he served as President of B&C Associates in
High Point, NC; Vice President for
Advancement at Voorhees College in
Denmark, SC; Vice President for Planning
and Development at Livingstone College in
Salisbury, NC and Director of Public
Relations at the Robert R. Moton Institute
in New York City, NY.
Among the accomplishments
Commissioner Patterson is most proud of is
leading his company's effort to pass a $3.1
billion bond referendum for higher
education facilities in North Carolina. The
bond was and still is the largest ever passed
in the United States for higher. education.
He also served as a Distinguished Executive
Lecturer - Gardner Webb University
Broyhill School of Management and Visiting
Lecturer - North Carolina A & T State
University.
He received his B.S. Degree from
California Miramar University and his
M.B.A. from Bernelli University, Trentino,
Italy.
C. BIOGRAPHICAL SKETCH OF EXECUTIVE
DIRECTOR PUBLIC STAFF
CHRISTOPHER J. AYERS
Christopher J. Ayers was appointed
Executive Director of the North Carolina
Utilities Commission Public Staff by
Governor Pat McCrory for a six year term
that began on July 1, 2013. Mr. Ayers is a
native of Rutherford County, North
Carolina. He graduated magna cum laude
from Duke University with a B.A. in Political
Science and Sociology in 1999. Mr. Ayers
received his Juris Doctor with Honors from
the University of North Carolina at Chapel
Hill in 2002 where he also served as
Managing Editor of the North Carolina Law
Review. Mr. Ayers served as a law clerk to
the Honorable Linda McGee with the North
Carolina Court of Appeals from August 2002
to August 2003. From August 2003 to June
2009, he practiced law in Raleigh, North
Carolina with the law firm of Hunton &
Williams LLP. Mr. Ayers joined the law firm
of Poyner Spruill LLP in Raleigh as a partner
in June 2009 where he practiced law until
11
July 2013. His primary areas of practice
were utilities regulation, environmental,
zoning and land use, administrative and
appellate law. He also served a two-year
term on the Environmental Management
Commission from July 2011 through June
2013. Mr. Ayers is active in church,
community and civic affairs, serving as
President of the North Carolina 4-H Alumni
and Friends Association, President and
Chairman of the Board of the North
Carolina 4-H Honor Club, board member of
the North Carolina 4-H Development Fund,
Inc. and President of Global Hope India, Inc.
He received Triangle Business Journal's 40
Under 40 Leadership Award in 2012 and the
4-H Young Alumni Award in 2005. Mr. Ayers
is married to Rebecca Keel Ayers and they
reside in Wake County.
D. PUBLIC STAFF AND ORGANIZATION CHART
As of January 1, 2015, there were 89 funded positions, including the Executive Director,
comprising the Public Staff of the North Carolina Utilities Commission.
PUBLIC STAFF
NORTH CAROLINA UTILITIES COMMISSION
March 1, 2015
Executive Director
Christopher J. Ayers
Business Officer ... ... . ...... ...... . ...... .. . ..... Carl Goolsby
Accounting Division ....................... .. . ..... ... . James G. Hoard
Communications Division . .. ... . ... . ..... ..... ..... . .... John Garrison
Consumer Services Division ....... . .......... ... ...... . . Vickie Debnam
Economic Research Division .. ...... .. .. ...... .. .. . . ... . John R. Hinton
Electric Division . .... . . ... ... ............... . .. ..... .. James Mclawhorn
legal Division . ....... . .. ... .. .. ... ... . . .. .. ........ ... Antoinette R. Wike
Natural Gas Division ........ .... ............ . . . . . .... .. . . ... Jeffrey L. Davis
Transportation Division ... .. .... . . . . . .. ........... . .... Cynthia Smith
Water & Sewer Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . David Furr
FIGURE NO. 1-2
PUBLIC STAFF - ORGANIZATION CHART
Executive Director
Administrative Assistant
Accounting ColTUllunications Consumer Services Transportation Legal Electric
Natural Gas Water Economic Research
12
E. HISTORICAL SKETCH OF DEVELOPMENT
The present North Carolina Utilities
Commission evolved from the Railroad
Commission, which was created in 1891 by
the General Assembly and was given au­thority
to -determine charges made for
services rendered by railroads, steamboat,
canal companies, and express and telegraph
companies.
The major changes occurring in the
North Carolina regulatory field since 1891
are in chronological order in all copies of
this publication prior to the 1998 volume
which began with major changes since
1979. This volume will begin with major
changes from 2000 through 2014.
2000 - Major legislation affecting the
regulation of utilities:
House Bill 1493 (Session Law 2000-161) An
Act to Provide Consumers With Control
Over Telephone Solicitation Calls to Their
Homes. Ratified July 10, 2000. Approved
August 2, 2000.
2001 - Major legislation affecting the
regulation of utilities:
House Bill 232. (Session Law 2001-427)
Regulatory Fee for Utilities Commission
Section 1.(a) The percentage rate to be
used in calculating the public utility
regulatory fee under G.S. 62-62-302(b}(2) is
one-tenth percent (0.1%} for each public
utility's North Carolina jurisdictional
revenues earned during each quarter that
begins on or after July 1, 2001.
Section 2.(b) The electric membership
corporation regulatory fee imposed under
G.S. 62-302(bl) for the 2001-2002 fiscal
year is two hundred thousand dollars
($200,000}.
13
Section 2.(c) This section becomes effective
July 1, 2001. Ratified September 20, 2001.
2002 - Major legislation affecting the
regulation of utilities:
(a) Senate Bill 641. (Session Law 2002-
14) An Act Authorizing the North Carolina
Utilities Commission to Adopt Rules to
Expand the Definition of Universal Service
to Include Statewide Internet Access and
Other Technological Telecommunications
Advances. Ratified July 8, 2002. Effective
July 15, 2002.
(b) Senate Bill 1078. (Session Law
2002-4} an Act to Improve Air Quality in the
State by Imposing Limits on the Emission of
Certain Pollutants From Certain Facilities
That Burn Coal to Generate Electricity and
to Provide for Recovery by Electric Utilities
of the Costs of Achieving Compliance With
Those Limits. Ratified June 19, 2002.
Effective June 20, 2002.
2003 - Major legislation affecting the
regulation of utilities:
(a) House Bill 913 (Session Law 2003-
99} An Act Authorizing the North Carolina
Utilities Commission to Determine a Time in
Which Final Rules Concerning the
Designation of a Universal Service Provider
for Telephone Service Shall Be Adopted.
Ratified May 22, 2003. Effective May 31,
2003.
(b) Senate Bill 814 (Session Law 2003-
91} An Act to Clarify the Law Regarding
Competitive and Deregulated Offerings of
Telecommunications Services. Ratified May
19, 2003. Effective May 30, 2003.
(c) Senate Bill 939. An Act to Extend
the Surcharge for the Telecommunications
Relay Service to Include Wireless
Communications. Ratified July 10, 2003;
Effective January 1, 2004.
(d) House Bill 397. Regulatory Fee for
Utilities Commission. Section 32.l(a) The
percentage rate to be used in calculating
the public utility regulatory fee under G.S.
62-302{b)(2) is twelve hundredths of a
percent (0.12%) for each public utility's
North Carolina jurisdictional . revenues
earned during each quarter that begins on
or after July 1, 2003. Ratified June 30, 2003.
Effectively July 1, 2003.
2004 - Major legislation affecting the
regulation of utilities:
(a) House Bill 1430. Section 1.4. Part 2.
Regulatory Fee for Utilities Commission
Section 2.1. The percentage rate to be used
in calculating the public utility regulatory
fee under G.S. 62-302(b)(2) is twelve
hundredths of one percent (0.12%) for each
public utility's North Carolina jurisdictional
revenues earned during each quarter that
begins on or after July 1, 2004. Effective
July 1, 2004.
Section 2.2. The electric membership
corporation regulation fee imposed under
G.S. 62-302{b1) for the 2004-2005 fiscal
year is two hundred thousand dollars
($200,000}.
2005 - Major legislation affecting the
regulation of utilities:
(a) Senate Bill 494 An Act to Encourage
Deployment of Competitive Broadband
Service by Public Utilities. Ratified June 13,
2005. Effective June 21, 2005.
{b) Senate Joint Resolution 426. A Joint
Resolution Providing for the Confirmation
of the Appointment of Howard N. Lee to the
14
Utilities Commission. Ratified and effective
on March 24, 2005.
(c) House Bill 1163 An Act to Provide
That Provisions in Motor Carrier Freight
Transportation Contracts That Hold
Harmless the Shipper for the Shipper's
Negligence or Intentional Acts are Void.
Ratified July 5, 2005. Effective October 1,
2005.
(d) Senate Bill 622 An Act to Make Base
Budget Appropriations for Current
Operations of State Departments,
Institutions, and Agencies, and for Other
Purposes.
Regulatory Fee for Utilities Commission
Section 40.2.(a) The percentage rate to be
used in calculating the public utility
regulatory fee under G.S. 62-302(b)(2) is
twelve-hundredths of one percent (0.12%)
for each public utility's North Carolina
jurisdictional revenues earned during each
quarter that begins on or after July 1, 2005.
Ratified August 11, 2005. Effective July 1,
2005.
Section 40.2.(b) The electric membership
corporation regulatory fee imposed under
G.5. 62-302(b1) for the 2005-2006 fiscal
year is two hundred thousand dollars
($200,000).
Section 40.2.(c) This section was ratified
August 11, 2005, and effective July 1, 2005.
2006 - Major legislation affecting the
regulation of utilities:
Senate Bill 1741. Section 29.3. Set the
annual salaries, payable monthly, for the
2006-2007 fiscal year for the certain
executive branch officials including the
Chairman of the Utilities Commission and
Members of the Utilities Commission.
Section 26.1.(a) The percentage rate to be
used in calculating the public utility
regulatory fee under G.S. 62-302(b)(2) is
twelve-hundredths of one percent (0.12%}
for each public utility's North Carolina
jurisdictional revenues earned during each
quarter that begins on or after
July 1, 2006.
Section 26.1.(b) The electric membership
corporation regulatory fee imposed under
G.S. 62-302(bl) for the 2006-2007 fiscal
year is two hundred thousand dollars
($200,000). Ratified July 6, 2006.
Approved July 10, 2006. Effective July 1,
2006.
2007 - Major legislation affecting the
regulation of utilities:
Senate Bill 680. Session Law 2007-157.
Section 1. G.S. 62-133.5. An Act to
Streamline Regulation of
Telecommunications Promotions. Ratified
June 25, 2007. Approved June 29, 2007.
House Bill 1473. Session Law 2007-323.
Set Regulatory Fee for Utilities Commission
Section 31.13.(a) The percentage rate to be
used in calculating the public utility
regulatory fee under G.S. 62-302(b)(2) is
twelve one-hundredths of one percent
(0.12%) for each public utility's North
Carolina jurisdictional revenues earned
during each quarter that begins on or after
July 1, 2007.
Section 31.13.(b) The electric membership
corporation regulatory fee imposed under
G.S. 62-302(bl) for the 2007-2008 fiscal
year is two hundred thousand dollars
($200,000). Ratified July 30, 2007.
Approved July 31, 2007. Effective July 1,
2007.
15
Senate Bill 3. Session Law 2007-397. An
Act To: (1) Promote the Development of
Renewable Energy and Energy Efficiency in
the State Through Implementations of a
Renewable Energy and Energy Efficiency
Portfolio Standard (REPS), (2) Allow
Recovery of Certain Nonfuel Utility Costs
Through the Fuel Charge Adjustment
Procedure, (3) Provide for Ongoing Review
of Construction Costs and for Recovery of
Costs in Rates in a General Rate Case, (4)
Adjust the Public Utility and Electric
Membership Corporation Regulatory Fees,
(5) Provide for the Phase out of the Tax on
the Sale of Energy to North Carolina
Farmers and Manufacturers, and (6) Allow a
Tax Credit to Contributors to 501(C)(3)
Organizations for Renewable Energy
Property. Ratified August 2, 2007.
Approved August 20, 2007. Effective
January 1, 2008.
2008 - Major legislation affecting the
regulation of utilities:
House Bill 2415. Set Regulatory Fees for
2008. Provides that the percentage rate to
be used in calculating the public utility
regulatory fee under G.S. 62-302(b)(2) is
0.12% for each public utility's North
Carolina jurisdictional revenues earned
during each quarter that begins on or after
July 1, 2008. Provides that electric
membership corporation regulatory fee
under G.S. 62-302(bl) is $200,000 for fiscal
2008-2009. Effective July 1, 2008.
2009 - Major legislation affecting the
regulation of utilities:
Senate Bill 661, Session Law 2009-279 An
Act Authorizing Lessors Of Contiguous
Premises To Allocate The Cost For Water
And Sewer Service To Each Tenant Using
Equipment That Measures Hot Water
Usage, Requiring Landlords To Improve The
Habitability Of Dwelling Units By Repairing
Certain Unsafe Conditions, Staying The
Execution Of A Judgment For Summary
Ejectment While A Motion For Modification
Of The Undertaking Is Pending, Establishing
Fees For Administrative Services In
Residential Tenancies, And Establishing The
Circumstances Under Which A City May
Order A Dwelling To Be Vacated And
Closed. Ratified July 1, 2009. Effective
October 1, 2009.
Senate Bill 889, Session Law 2009-202 An
Act Further Authorizing The Utilities
Commission To Determine The Universal
Service Provider In Certain Subdivisions And
Areas. Ratified June 17, 2009. Approved
June 26, 2009
House Bill 135, Session Law 2009-80 An Act
Permitting Certain Broadband Service
Providers That Provide Voice Grade
Communications Services Within A Defined
Service Territory Or Franchise Area To Offer
Such Voice Grade Service As An Incident To
Broadband Service In Areas Contiguous To
The Providers' Service Territory Or
Franchise Area. Ratified June 2, 2009.
House Bill 1180, Session Law 2009-238. An
Act Establishing The Consumer Choice And
Investment Act of 2009. Section 1. G.S. 62-
133.5 is amended by adding a new
subsection to read: "(h) Notwithstanding
any other provision of this Chapter, a local
exchange company that is subject to rate of
return regulation or subject to another form
of regulation authorized under this section
and whose territory is open to competition
from competing local providers may elect to
have its rates, terms, and conditions for its
services determined pursuant to the plan
described in this subsection by filing notice
of its intent to do so with the Commission.
The election is effective immediately upon
filing. A local exchange company shall not
16
be permitted to make the election under
this section unless it commits to provide
stand-alone basic resident ial lines to rural
customers at rates comparable to those
rates charged to urban customers for the
same service. Ratified June 22, 2009.
Effective June 30, 2009.
House Bill 1330, Session Law 2009-302. An
Act Prohibiting Public Utilities, Electric
Membership Corporations, Telephone
Membership Corporations, And Cit ies And
Counties That Operate Public Enterprises
From Using Certain Debt Collection
Practices That Result In A Customer Being
Liable For The Past Due And Unpaid Debts
Of Another Person. Ratified July 7, 2009.
Approved and Effective July 17, 2009.
Senate Bill 202, Session Law 2009-451. An
Act To Make Base Budget Appropriations
For Current Operations Of State
Departments, Institutions, And Agencies,
And For Other Purposes.
Section 9.14.(c) The North Carolina Utilit ies
Commission is directed to facilitate and
expedite wind energy pilot projects
developed pursuant to this act that come
within its jurisdiction to the extent allowed
by law and consistent with State statute.
Ratified August 5, 2009. Approved August
7, 2009.
Section 14.19.(el) Notwithstanding any
other provision of law, beginning in the
2009-2010 fiscal year, the cash balances
remaining in the following Fund codes on
June 30 of each fiscal year that is greater
than twenty percent (20%) of the operating
budget for each Fund shall revert to the
General Fund: ... (4) 54600-5211 Utilities­Commission
Staff; (5) 54600-5217
Utilities-Gas Pipeline Safety; (6) 54600-
5221 Utilities-Public Staff. Ratified August
5, 2009. Effective July 1, 2009
Section 14.26.(a) Set Regulatory Fee for
Utilities Commission. The percentage rate
to be used in calculating the public utility
regulatory fee under G.S. 62-302(b)(2) is
twelve one-hundredths of one percent
(0.12%) for each public utility's North
Carolina jurisdictional revenues earned
during each quarter that begins on or after
July 1, 2009. Ratified August 5, 2009.
Section 14.26.(b) The electric membership
corporation regulatory fee imposed under
G.S. 62-302(b1) for the 2009-2010 fiscal
year is two hundred thousand dollars
($200,000). Ratified August 5, 2009.
Senate Bill 1004, Session Law 2009-390 An
Act To Provide For Retention Of Fuel And
Fuel-Related Cost Savings Associated With
The Purchase Or Construction Of A Carbon
Offset Facility, To Bring Certain Dams Used
In Connection With Electric Generating
Facilities Under The Dam Safety Act, And to
Make Other Changes To Laws Governing
The Generation Of Electricity. Ratified July
23, 2009. Approved July 31, 2009. Effective
January 1, 2010.
House Bill 1481, Session Law 2009-446 An
Act To Transfer The State Energy Office
From The Department Of Administration To
The Department Of Commerce, To Transfer
The Residential Energy Conservation
Assistance Program _From the Department
Of Health And Human Services To the
Energy Office Of The Department Of
Commerce, And To Make Various Changes
To The Energy Policy Act of 1975. Section
10. The Secretary of Commerce and the
Chair of the Utilities Commission shall
jointly prepare a report examining the
respective duties and functions of the
Utilities Commission and the Energy Policy
Council and shall recommend changes to
address any duplicative activities and
17
responsibilities. This report shall be
submitted to the Governor no later than
January 31, 2010. Ratified on July 28, 2009.
Approved August 7, 2009. Effective August
7, 2009.
2010 - Major legislation affecting the
regulation of utilities:
Senate Bill 897, Session Law 2010-31 An
Act to Modify the Current Operations and
Capital Improvements Appropriations Act of
2009 and for Other Purposes.
Section 14.26.(a) The percentage rate to be
used in calculating the public utility
regulatory fee under G.S. 62-302(b)(2) is
twelve one-hundredths of one percent
(0.12%) for each public utility's North
Carolina jurisdictional revenues earned
during each quarter that begins on or after
July 1, 2010.
Section 14.26.(b) The electric membership
corporation regulatory fee imposed under
G.S. 62-302(b1) for the 2010-2011 fiscal
year is two hundred thousand dollars
($200,000). This section becomes
effective July 1, 2010 out of the Accounts
leaving -0- balances.
Senate Bill 1202 Session Law 2010-123
An Act to Make Technical, Clarifying, and
Other Modifications to the Current
Operations and Capital Improvements
Appropriations Acts.
Section 3.3. Section 9.14(c) of Session Law
2009-451, as rewritten by Section 9.9 of S.L.
2010-31, reads as rewritten: Section
9.14.(c) The North Carolina Utilities
Commission is directed to facilitate and
expedite wind energy pilot projects
developed pursuant to this act that come
within its jurisdiction to the extent allowed
by law and consistent with State statute.
Ratified July 10, 2010.
House Bill 466 Session Law 2010-173. An
Act to Amend the Consumer Choice and
Investment Act of 2010.
Section 1. G.S. 62-133.S(g) reads as
rewritten: "(g) The following sections of
Chapter 62 of the General Statutes shall not
apply to local exchange companies subject
to price regulation under the terms of
subsection (a) of this section or electing
companies subject to alternative regulation
under the terms of subsection(h) of this
section: G.S. 62-35(c),O 62-45, 62-51, 62-
81, 62-111, 62-130, 62-131,
62-132, 62-133, 62-134, 62-135, 62-136, 62-
137, 62-139, 62-142, and 62-153."
Section 2. G.S. 62-133.5(h) reads as
rewritten: "(h) Notwithstanding any other
provision of this Chapter, a local exchange
company that is subject to rate of return
regulation or subject to another form of
regulation authorized under this section
and whose territory is open to competition
from competing local providers may elect to
have its rates, terms, and conditions for its
services determined pursuant to the plan
described in this subsection by filing notice
of its intent to do so with the Commission.
The election is effective immediately upon
filing. A local exchange company shall not
be permitted to make the election under
this section unless it commits to provide
stand- alone basic residential lines to rural
customers at rates that are less than or
comparable to those rates charged to urban
customers for the same service. Ratified
July 8, 2010.
House Bill 1691, Session law 2010-158;
An Act to Amend the Statutes Governing
Emergency Telephone Service, as
recommended by the House Select
Committee on the Use of 911 Funds, and To
Increase Funds for Supplemental Peg
18
Channel Support. Ratified July 29, 2010.
Senate Bill 886 Session law 2010-195; An
Act to Authorize the Establishment of
Cleanfields Renewable Energy
Demonstration Parks in the State.
2011 - Major legislation affecting the
regulation of utilities:
Senate Joint Resolution 2011-7 A joint
Resolution providing for the Confirmation
of the appointment of Edward S. Finley, Jr.,
to the Utilities Commission.
Senate Bill 343 Session Law 2011-52. An
Act Establishing The Communications
Regulatory Reform and Investment Act of
2011. Ratified on April 18, 2011. Effective
on April 26, 2011.
Senate Bill 75 Session law 2011-55. An Act
to Promote the use of Electricity Demand
Reduction to Satisfy Renewable Energy
Portfolio Standards. Ratified on April 21,
2011. Effective April 28, 2011.
House Bill 311 Session Law 2011-244. An
Act Requiring that Motor Carriers of
Household Goods Mark or Identify Their
Vehicles and Making it Unlawful for a
Person Not Certified by the Utilities
Commission as a Motor Carrier of
Household Goods to Advertise or Otherwise
Represent that the Person is Authorized to
Engage in the Transportation of Household
Goods for Compensation in this State.
Ratified on June 16, 2011. Effective on
October 1, 2011.
Senate Bill 484 Session law 2011-279. An
Act to Provide that the Additional Credits
assigned to the First Ten Megawatts of
Biomass Renewable Energy Facility
Generation Capacity Pursuant to S.L. 2010-
195 (Cleanfields Act of 2010) are Eligible to
Satisfy the Poultry Waste Set-Aside.
Ratified June 18, 2011. Effective June 23,
2011.
House Bill 595 Session Law 2011-291. An
Act Changing the Structure of Certain
Legislative Committees and Commissions,
Transferring the Duties of Certain
Committees And Commissions to Other
Committees and Commissions, Changing
the Composition of Various Legislative
Committees and Commissions, and Making
Conforming Changes.
PART I. REORGANIZATION AND
CONSOLIDATION OF LEGISLATIVE
OVERSIGHT COMMITTEES
Joint Legislative Commission on
Governmental Operations
SECTION 1.2.(d) G.S. 120-76 . Powers and
duties of the Commission.
The Commission shall have the following
powers:
(11) To evaluate the North Carolina
Utilities Commission by doing the
following:
a. Reviewing the actions
of the North Carolina Utilities
Commission including the
review of its interim and final
orders, to the end that the
members of the General
Assembly may better judge
whether these actions serve
the best interest of the
citizens of North Carolina,
individual and corporate.
b. Inquiring into the role
of the North Carolina Utilities
Commission, the Public Staff,
and the several utility
companies in . the
development of alternate
sources of energy.
19
c. Submitting evaluations
to the General Assembly,
from time to time, of the
performance of the North
Carolina · Utilities
Commission, the Public Staff,
and the various utilities
operating in the State. A
proposed draft of such
evaluations shall be
submitted to the North
Carolina Utilities
Commission, the Public Staff,
and the affected public
utilities prior to submission
to the General Assembly and
the affected entity shall be
given an opportunity to be
heard before the
Commission prior to the
completion of the evaluation
and its submission to the
General Assembly.
(12) To make reports and
recommendations to the General
Assembly, from time to time, on
matters relating to the powers and
duties set out in this section.
(13) To review and evaluate
changes in federal law and
regulations relevant court decisions,
and changes in technology affecting
any of the duties of the
Commissions.
(14)To review and evaluate changes
in federal law and regulation or
changes brought about by court
actions, as well as changes in
technology affecting any of the
duties of the Commission, to
determine whether the State's laws
require modification as a result of
those changes.
PART II. CONFORMING CHANGES
SECTION 2.11. G.S. 62-133.2(g) On July 1 of
every odd-numbered year, the Utilities
Commission shall provide a report to the
Joint Legislative Utility Review Committee
Commission on Governmental Operations
summarizing the proceedings conducted
pursuant to this section during the
proceedings two years. Ratified on June 15,
2011. Approved and Effective on June 24,
2011.
2012 - Major legislation affecting the
regulation of utilities:
Senate Bill 141 Session Law 2012-168. An
Act to Create New First Degree Trespass
Offenses, to Make Various Changes
regarding the Procedures for a Motion for
Appropriate Relief, to Amend the Procedure
for Immediate License Revocations for
Provisional Licensees Charged with Certain
Criminal Moving Violations to Clarify that
Certain Procedures for Creating those
Contracts, to Establish a Research and
Planning Section within the Department of
Public Safety, to Require the Department of
Public Safety to Designate Its Research and
Planning Section as the Single State Agency
Responsible for the Coordination and
Implementation of Reentry Policy
Initiatives, to Direct the Department of
Public Safety to Continue its Efforts to Assist
Offenders in Successfully Re-entering
Society, and to Extend the Time for Local
Forensic Science Labs to Obtain
Accreditation and for Certain Forensic
Scientists to Obtain Certification.
Section 1. § 14-159.12. First degree
trespass. c. Any facility, including any
liquefied natural gas storage facility or
propane air facility, that is owned or
operated by a natural gas local distribution
company, natural gas pipeline carrier
20
operating under a certificate of public
convenience and necessity from the Utilities
Commission, municipal corporation
operating a municipally owned gas
distribution system, or regional natural gas
district organized and operated pursuant to
Article 28 of Chapter 160A of the General
Statutes used for transmission, distribution,
measurement, testing, regulating,
compression, control, or storage of natural
gas.
House Bill 261 Session Law 2012-41
An Act to Require Intrastate Motor Carriers
to Be Marked. Certain businesses to
certain section.
SECTION 1. G.S. 20-101 reads as rewritten:
(b) A motor vehicle with a gross vehicle
weight rating of more than 26,000 pounds
that is used in intrastate commerce shall
have (i) the name of the owner and (ii) the
motor carrier's identification number
preceded by the letters "USDOT" and
followed by the letters "NC" printed on
each side of the vehicles in letters not less
than three inches in height. The provisions
of this subsection shall not apply if any of
the following are true:
(1) The motor vehicle is subject
to 49 C.F.R. Part 390.
(2) The motor vehicle is of a
type listed in 49 C.F.R.390.3(f).
Ratified on June 13, 2012. Approved on
June 20, 1012. Effective December 1, 2012.
House Bill 340 Session Law 2012-9. An Act
Authorizing the Utilities Commission to
Obtain Criminal History Record Checks of
Applicants for and Current Holders of a
Certificate to Transport Household Goods.
2013 - Major legislation affecting the
regulation of utilities:
House Bill 74 Session Law 2013-413. An Act
To Improve And Streamline The Regulatory
Process In Order To Stimulate Job Creation,
To Eliminate Unnecessary Regulation, To
Make Various Other Statutory Changes, And
To Amend Certain Environmental And
Natural Resources Laws.
House Bill 476 Session Law 2013-407. An
Act Rewriting The Laws Regulating
Underground Utility Damage Prevention.
House Bill 112 Session Law 2013-363. An
Act To Make Technical, Clarifying, And
Other Modifications To The Current
Operations And Capital Improvements
Appropriations Act Of 2013 And To Related
Legislation.
SECTION 11.1. If the State repeals any State
funding mechanism for a reduction in the
local telephone rates for low-income
residential consumers, the Commission
shall take appropriate action to eliminate
any requirement for the reduced rate
funded by the repealed State funding
mechanism. For the purposes of this
section, a State funding mechanism for a
reduction in the local telephone rates
includes a tax credit allowed for the public
utility to recover the reduction in· rates.
House Bill 119 Session Law 2013-54. An Act
Authorizing The Utilities Commission To
Adopt, Implement, Modify, Or Eliminate A
Rate Adjustment Mechanism For Natural
Gas Local Distribution Company Rates.
House Bill 223 Session Law 2013-187. An
Act Exempting Electric Membership
Corporations From Integrated Resource
Planning And Service Regulations
Requirements Established By The Utilities
21
Commission, Returning Oversight Of The
Corporations To Their Member Board Of
Directors, And Clarifying The Authority Of
The North Carolina Rural Electrification
Authority To Receive And Investigate
Complaints From Members Of Electric
Membership Corporations.
House Bill 484 Session Law 2013-51. An Act
To Establish A Permitting Program For The
Siting And Operation Of Wind Energy
Facilities.
House Bill 710 Session Law 2013-106. An
Act To ,Permit Water Utilities To Adjust
Rates For Changes In Costs Based On Third­Party
Rates And To Authorize The Utilities
Commission To Approve A Rate Adjustment
Mechanism For Water And Sewer Utilities
To Recover Costs For Water And Sewer
System Improvements.
House Bill 788 Session Law 2013-107. An
Act To Amend The Statute Governing The
Powers Of Water And Sewer Authorities To
Allow The Authority To Set Rates For Water
Resources Storage Or Protection Programs.
House Bill 998 Session Law 2013-316. An
Act To Simplify The North Carolina Tax
Structure And To Reduce Individual And
Business Tax Rates.
Senate Bill 9 Session Law 2013-142. An Act
Requiring Utility Owners To Locate And
Describe Underground Utilities Upon
Written Or Oral Request From A Person
Who Is Responsible For Designing Or
Surveying Underground Facilities Or
Requires A General Description And
Location Of Existing Underground Facilities
In An Area.
Senate Bill 430 Session Law 2013-58. An Act
To Exempt From Permitting Requirements
Persons ~ nstalling Electric Load Control
Switches Under The laws Regulating
Electrical Contractors And To Make
Conforming Changes Under The laws
Pertaining To Building Inspection Permits
For Counties And Cities.
Senate Bill 545 Session law 2013-168. An
Act Providing For The Use Of A Master
Meter For Electric And Natural Gas Service
When The Tenant And landlord Have
Agreed In The lease That The Cost Of The
Services Shall Be Included In The Rental
Payments And The Service Shall Be In The
Landlord's Name.
Senate Bill 635 Session Law 2013-232. An
Act To Clarify That Only Incumbent
Providers May Construct A New Electricity
Transmission line.
2014 - Major legislation affecting the
regulation of utilities:
Senate Bill 734 Session Law 2014-120. An
Act To Provide Further Regulatory Relief To
The Citizens Of North Carolina By Providing
For Various Administrative Reforms, By
Eliminating Certain Unnecessary Or
Outdated Statutes And Regulations And
Modernizing Or Simplifying Cumbersome Or
Outdated Regulations, And By Making
Various Other Statutory Changes. REPEAL
OUTDATED PUBLIC UTILITIES STATUTES OR
REPORTS SECTION 10.(a) - SECTION 10.(g)
Senate Bill 729 Session Law 2014-122. An
Act To (1) Prohibit Recovery Of Costs
Related To Unlawful Discharges From Coal
Combustion Residuals Surface
Impoundments; (2) Establish A Moratorium
On Certain Rate Cases; (3) Create The Coal
Ash Management Commission To Review
And Approve Coal Combustion Residuals
Surface Impoundments Classifications And
Closure Plans And Otherwise Study And
Make Recommendations On laws
22
Governing Management Of Coal
Combustion Residuals; (4) Require
Expedited Review By The Department Of
Environment And Natural Resources Of Any
Permit Necessary To Conduct Activities
Required By This Act; (5) Establish Various
Reporting Requirements To The General
Assembly, Including A Quarterly Report
From The Department Of Environment And
Natural Resources On Its Operations,
Activities, Programs, And Progress With
Respect To Its Obligations Under This Act
For Coal Combustion Residuals Surface
Impoundments; (6) Prohibit Local
Government Regulation Of Management Of
Coal Combustion Residuals Or Coal
Combustion Products; (7) Prohibit
Construction Of New Or Expansion Of
Existing Coal Combustion Residuals Surface
Impoundments Effective October 1, 2014;
(8) Prohibit The Disposal Of Coal
Combustion Residuals Into Coal Combustion
Residuals Surface Impoundments At Coal­Fired
Generating Units That Are No Longer
Producing Coal Combustion Residuals
Effective October 1, 2014; (9) Prohibit
Disposal Of Stormwater To Coal
Combustion Residuals Surface
Impoundments Effective December 31,
2018; (10) Require All Electric Generating
Facilities To Convert To Generation Of Dry
Fly Ash On Or Before December 31, 2017,
And Dry Bottom Ash On Or Before
December 31, 2020, Or Retire; (11) Require
The Assessment Of Groundwater At Coal
Combustion Residuals Surface
Impoundments; (12) Require Corrective
Action For The Restoration Of Groundwater
Quality At Coal Combustion Residuals
Surface Impoundments; (13) Require A
Survey Of Drinking Water Supply Wells And
Replacement Of Contaminated Water
Supplies; (14) Require The Identification,
Assessment, And Correction Of
Unpermitted Discharges From Coal
Combustion Residuals Surface
Impoundments; (15) Require The
Department Of Environment And Natural
Resources To, As Soon As Practicable, But
No Later Than December 31, 2015,
Prioritize For The Purpose Of Closure And
Remediation ·Coal Combustion Residuals
Surface Impoundments, Including Active
And Retired Sites, Based On These Sites'
Risks To Public Health, Safety, And Welfare,
The Environment, And Natural Resources;
(16) Require Owners Of Coal Combustion
Residuals Surface Impoundments To Submit
A Proposed Plan For Closure Of All
Impoundments To The Department Of
Environment And Natural Resources; (17)
Require Closure And Remediation Of
Certain Coal Combustion Residuals Surface
Impoundments As Soon As Practicable, But
No Later Than August l, 2019; (18) Require
The Department Of Environment And
Natural Resources To Establish A Schedule
And Process For Closure And Remediation
Of All Coal Combustion Residuals Surface
Impoundments Based Upon The
Department's Risk Assessment Of These
Sites, Baseline Requirements Set By The
General Assembly, Evaluation Of Proposed
Closure Plans Submitted By lmpoundment
Owners, And Input From The Public And
Other Stakeholders; (19) Establish Minimum
Statutory Requirements For Structural Fill
Projects Using Coal Combustion Products
And Require The Department Of
Environment And Natural Resources To
Inventory And Inspect Certain Structural Fill
Projects; (20) Place A Moratorium On
Certain Projects Using Coal Combustion
Products As Structural Fill Until August 1,
2015, And Direct The Department Of
Environment And Natural Resources And
The Environmental Management
Commission To Study The Adequacy Of
Current Law Governing Use Of Coal
Combustion Products As Structural Fill And
For Beneficial Use; (21) Place A Moratorium
On The Expansion And Construction Of Coal
23
Combustion Residuals Landfills Until August
1, 2015, And Direct The Department Of
Environment And Natural Resources To
Assess The Risks To Public Health, Safety,
And Welfare, The Environment, And Natural
Resources Of Coal Combustion Residuals
Surface Impoundments Located Beneath
These Landfills To Determine The
Advisability Of Continued Operation Of
These Landfills; (22) Strengthen The
Reporting And Notification Requirements
Applicable To Discharges Of Wastewater To
Waters Of The State; (23) Require Certain
Emergency Calls To Be Recorded; (24)
Require Development Of Emergency Action
Plans For High And Intermediate Hazard
Dams And Amend Other Dam Safety Law
Requirements Applicable To Coal
Combustion Residuals Surface
Impoundments; (25) Transfer Solid Waste
Rule-Making Authority From Commission
For Public Health To Environmental
Management Commission; (26) Amend
Compliance Boundary Provisions; (27)
Provide For Various Studies; (28) Require
The State Construction Office And The
Department Of Transportation To Develop
Technical Specifications For Use Of Coal
Combustion Products; And (29) Provide
Resources For Implementation Of This Act.
FIGURE NO. 1-3
NORTH CAROLINA UTILITIES COMMISSION
RECEIPTS AND EXPENDITURES
Fiscal Year ending June 30, 2015
Source Commission Staff Public Staff Total
Fees Collected by the Commission:
Regulatory Fee $16,041 ,040 $0 $16,041 ,040
Interest 16,406 0 16,406
Fines and Penalties 68,500 0 68,500
Office of Chief Clerk:
Duplicating Services 477 0 477
Filing Fees 56,298 0 56,298
Publication Sales 499 0 499
Miscellaneous Revenues 2,749 0 2,749
Sell of Surplus Property 417 317 735
Reimbursement of Contractual Expenses 87, 193 0 87,193
Federal Funds:
US Gas Safety Program 377,864 0 377,864
TOTAL RECEIPTS $16,651,443 $317 $16,651 ,760
Expenditures:
Salaries and Wages $4,455,486 $5,342,258 $9,797,744
Fringe Benefits 1,267,967 1,765,787 3,033,754
Legal & Consulting Fees 130,012 0 130,012
Contractual Services 84,998 31,655 116,653
Repairs of Building & Equipment 618.35 1,470 2,088
Service & Maintenance Contracts 74,250 8,434 82,685
Rent - Building, Offices & Equipment 327,226 276,680 603,906
Travel 139,804 20,908 160,712
Registration Fees 25,194 12,905 38,099
Telephone, Postage, Printing & Copying 75,907 46,689 122,595
Data Processing Service 859 13,426 14,285
Insurance 1,164 1,207 2,372
Employee Educational Expenses 0 125 125
Materials and Supplies 30,662 3,963 34,625
Office Furniture, Equipment 31 ,869 4,682 36,551
Data Processing Equipment & Software 20,048 94,453 114,501
Library Resources 36,698 1,344 38,042
Dues & Subscriptions 102,540 19,083 121,623
Other Services and Expenses 1,272 3,750 5,022
Indirect Cost/Agency Administration Fees 137,196 145,299 282,495
lntragovernmental Transfer - Legislative Mandate 0 0 0
lntragovernmental Transfer of Fines Collected 0 0 0
TOTAL EXPENDITURES $6,943,771 $7,794, 119 $14,737,890
BUDGETED POSITIONS 64 89 153
24
II. SELECTED COMMISSION ACTIVITIES
THROUGH DECEMBER 2015
25
A. GENERAL
Public Involvement
The Commission continued to make all
activities open for participation by the public
and other interested parties. The table below
shows the number of formal hearings held in
Raleigh and in the service areas of the utilities
involved; many of these hearings were held in
the evening to accommodate those who could
not attend daytime hearings.
Year Ended December 31
2011 2012 2013 2014
Total Formal
Hearings Held 61 84 105 105
Number of
Hearings Held
Away From
Raleigh, in
Utility Service
Areas 22 15 47 23
Percent of Total
Hearings Held
Away From
Raleigh 36% 18% 45% 22%
The primary reason for holding hearings
in the service areas of the utilities involved in
the hearings is to make it easier for the local
consumers and general public to attend and to
offer testimony if they so choose. Attendance
at such hearings provides a broader knowledge
of the scope and complexities of issues which
the Commission, the Public Staff, and all other
participants must deal with.
Advance public notice is given for all
hearings of general interest and especially rate
case hearings. News releases are made of
important Commission decisions and activities.
All Commission weekly conferences (Monday
mornings generally) are open to the public as a
spectator or participant and events are now
posted to the Commission's web site.
26
For a summary of Commission filings
and orders for 2014 see Figure No. 2-1.
B. ELECTRIC
The History of Integrated Resource Planning
{IRP)
Integrated resource planning is an
overall planning strategy which examines
conservation, energy efficiency, load
management, and other demand-side
measures in addition to utility-owned
generating plants, non-utility generation,
renewable energy, and other supply-side
resources in order to determine the least cost
way of providing electric service. The primary
purpose of integrated resource planning is to
integrate both demand-side and supply-side
resource planning into one comprehensive
procedure that weighs the costs and benefits of
all reasonably available options in order to
identify those options which are most cost­effective
for ratepayers consistent with the
obligation to provide adequate, reliable service.
By Commission Order dated
December 8, 1988, in Docket
No. E-100, Sub 54, Commission Rules R8-56
through R8-61 were adopted to define the
framework within which integrated resource
planning takes place. Those rules incorporated
the analysis of probable electric load growth
with the development of a long-range plan for
ensuring the availability of adequate electric
generating capacity in North Carolina as
required by G.S. 62-110.l(c).
The initial IRPs were filed with the
Commission in April 1989. In May of 1990, the
Commission issued an Order in which it found
that the initial IRPs of Progress, Duke, and NC
Power were reasonable for purposes of that
proceeding and that NCEMC should be required
to participate in all future IRP proceedings. By
an Order issued in December 1992, Rule R8-62
was added. It covers the construction of
electric transmission lines.
The Commission subsequently
conducted a second and third full analysis and
investigation of utility IRP matters, resulting in
the issuance of Orders Adopting Least Cost
Integrated Resource Plans on June 29, 1993,
and February 20, 1.996. A subsequent round of
comments included general endorsement of a
proposal that the two/three year IRP filing
cycle, plus annual updates and short-term
action plans, be replaced by a single annual
filing. There was also general support for a
shorter planning horizon than the fifteen years
required at that time.
In April 1998, the Commission issued an
Order in which it repealed Rules R8-56 through
R8-59 and revised Rules R8-60 through R8-62.
The new rules shortened the reported planning
horizon from 15 to 10 years and streamlined
the IRP review process while retaining the
requirement that each utility file an annual plan
in sufficient detail to allow the Commission to
continue to meet its statutory responsibilities
under G.S. 62-110.l(c) and G.S. 62-2(a)(3a).
These revised rules allowed the Public
Staff and any other intervenor to file a report,
evaluation, or comments concerning any
utility's annual report within 90 days after the
utility filing. The new rules further allowed for
the filing of reply comments 14 days after any
initial comments had been filed and required
that one or more public hearings be held. An
evidentiary hearing to address issues raised by
the Public Staff or other intervenors could be
scheduled at the discretion of the Commission.
In September 1998, the first IRP filings
were made under the revised rules. The
Commission concluded, as a part of its Order
ruling on these filings, that the reserve margins
forecast by Progress, Duke and. NC Power
indicated a much greater reliance upon
off-system purchases and interconnections
with neighboring systems to meet unforeseen
contingencies than had been the case in the
past. The Commission stated that it would
closely monitor this issue in future IRP reviews.
In June 2000, the Commission stated in
response to the investor-owned electric
utilities' (IOUs) 1999 IRP filings that it did not
believe that it was appropriate to mandate the
27
use of any particular reserve margin for any
jurisdictional electric utility at that time. The
Commission concluded that it would be more
prudent to monitor the situation closely, to
allow all parties the opportunity to address this
issue in future filings with the Commission, and
to consider this matter further in subsequent
integrated resource planning proceedings. The
Commission did, however, want the record to
clearly indicate its belief that providing
adequate service is a fundamental obligation
imposed upon all jurisdictional electric utilities,
that it would be actively monitoring the
adequacy of existing electric utility reserve
margins, and that it would take appropriate
action in the event that any reliability problems
developed.
Further orders required that IRP filings
include a discussion of the adequacy of the
respective utility's transmission system and
information concerning levelized costs for
various conventional, demonstrated, and
emerging generation technologies.
A Commission Order issued on
October 19, 2006, in Docket No. E-100,
Sub 111, opened a rulemaking proceeding to
consider revisions to the IRP process as
provided for. in Commission Rule R8-60. On
May 24, 2007, the Public Staff filed a Motion for
Adoption of Proposed Revised Integrated
Resource Planning Rules setting forth a
proposed Rule R8-60 as agreed to by the
various parties in that docket. The Public Staff
asserted that the proposed rule addressed
many of the concerns about the IRP process
that were raised in the 2005 IRP proceeding
and balanced the interests of the utilities, the
environmental intervenors, the industrial
intervenors, and the ratepayers. Without
detailing all of the changes recommended in its
filing, the Public Staff noted that the proposed
rule expressly required the utilities to assess on
an ongoing basis both the potential benefits of
reasonably available supply-side energy
resource options, as well as programs to
promote demand-side management. The
proposed rule also substantially increased both
the level of detail and the amount of
information required from the utilities
regarding those assessments. Additionally, the
proposed rule extended the planning horizon
from 10 to 15 years, so the need for additional
generation would be identified sooner. The
information required by the proposed rule
would also indicate the projected effects of
demand response and energy efficiency
programs and activities on forecasted annual
energy and peak loads for the 15-year period.
The Public Staff also noted that the proposed
rule provided for a biennial, as opposed to
annual or triennial, filing of IRP reports with an
annual update of forecasts, revisions, and
amendments to the biennial report. The Public
Staff further noted that adoption of the
proposed Rule R8-60 would necessitate
revisions to Rule R8-61(b) to reflect the change
in the frequency of the filing of the IRP reports.
With the addition of certain other
provisions and understandings, the Commission
ordered that revised Rules R8-60 and R8-61(b),
attached to its Order as Appendix A, should
become effective as of the date of its Order,
which was entered on July 11, 2007. However,
since the utilities might not have been able to
comply with the new requirements set out in
revised Rule R8-60 in their 2007 IRP filings,
revised Rule R8-60 was ordered to be applied
for the first time to the 2008 IRP proceedings in
Docket No. E-100, Sub 118. These new rules
were further refined in Docket No. E-100, Sub
113, to address the implementation of Senate
Bill 3 requirements.
2014 Biennial Integrated Resource Plans
were filed by Progress, Duke, and NC Power. In
addition, each of the three IOUs filed 2014
REPS compliance plans.
The following parties intervened in this
proceeding: Carolina Industrial Group for Fair
Utility Rates I, II, and Ill (CIGFUR); Carolina
Utility Customers Association, Inc. (CUCA);
Environmental Defense Fund (EDF); Mid­Atlantic
Renewable Energy Coalition (MAREC);
North Carolina Sustainable Energy Association
(NCSEA}; North Carolina Waste Awareness and
28
Reduction Network (NC WARN); North Carolina
Electric Membership Corporation (NCEMC);
Sierra Club; and Southern Alliance for Clean
Energy (SACE). The Public Staff's intervention is
recognized pursuant to G.S. 62-15(d) and
Commission Rule Rl-19(e).
A Public Hearing was held in Raleigh on
March 9, 2015. The Commission's June 26,
2015 Order Approving Integrated Resource
Plans and REPS Compliance Plans, which
includes the procedural history of this
proceeding, can be found as Appendix 1 in the
back of the North Carolina Utilities Commission
2015 Annual Report Regarding Long Range
Needs for Expansion of Electric Generation
Facilities for Service in North Carolina.
Load Forecasts and Peak Demand
Forecasting electric load growth into the
future is, at best, an imprecise undertaking.
Virtually all forecasting tools commonly used
today assume that certain historical trends or
relationships will continue into the future and
that historical correlations give meaningful clues
to future usage patterns. As a result, any shift in
such correlations or relationships can introduce
significant error into the forecast. Progress,
Duke, and NC Power each utilize generally
accepted forecasting methods. Although their
respective forecasting models are different, the
econometric techniques employed by each utility
are widely used for projecting future trends.
Each of the models requires analysis of large
amounts of data, the selection of a broad range
of demographic and economic variables, and the
use of advanced statistical techniques.
With the inception of integrated resource
planning, North Carolina's electric utilities have
attempted to enhance forecasting accuracy by
performing limited end-use forecasts. While this
approach also relies on historical information, it
focuses on information relating to specific
electrical usage and consumption patterns in
addition to general economic relationships.
Table 2 illustrates the systemwide
average annual growth rates in energy sales and
peak loads anticipated by Progress, Duke, and NC
Power. These growth rates are based on the
utilities' system peak load requirements.
Detailed load projections for the respective
utilities are showri in Appendices 2, 3, and 4 of
the North Carolina Utilities Commission 2015
Annual Report Regarding Long Range Needs for
Expansion of Electric Generation Facilities for
Service in North Carolina.
Table 2: Forecast Annual Growth Rates for Progress,
Duke, and NC Power
(After Energy Efficiency and Demand-Side
Management are Included) 2015 - 2029
Summer Winter Energy
Peak Peak Sales
Progress 1.3% 1.2% 1.0%
Duke 1.4% 1.5% 1.0%
NC Power 1.0% 1.1% 1.1%
North Carolina utility forecasts of future
peak demand growth rates are in the range of
forecasts for the nation as a whole. The 2015-
2024 Long-Term Reliability Assessment by the
North American Electric Reliability Corporation
(NERC) indicates that the national forecast of
average annual growth in summer peak
demand for that period is 1.05%.
29
Table 3 provides historical peak load
information for Progress, 'nuke, and NC Power.
Table 3:
Summer and Winter Systemwide Peak Loads for
Progress, Duke, and NC Power since 2010 (in MW)
Progress Duke NC Power
s W* s W* s
2010 12,074 12,230 17,358 17,570 19,140
2011 12,094 11,338 17,651 16,002 20,061
2012 12,770 12,376 17,610 15,307 19,249
2013 12,248 14,159 18,239 18,859 18,763
2014 12,219 15,151 18,993 21,101 18,692
*Winter peak following summer peak
C. CONSUMER POCKETBOOK ISSUES
1. General Rate Case Decisions 2009 - 2014
A summary of the Commission decisions
in general rate cases for the years 2009 through
December 31, 2014, for the electric, gas, and
telephone groups can be found in Figure
No. 2-2. The yearly totals and the progression
of amounts requested and granted during this
period are shown. There were no general rate
cases during calendar year 2014 as nothing was
requested.
Many factors such as interest rates,
quality of service, cost of fuel, availability of gas
supplies, future demands for utility service and
utility managerial efficiency contribute to the
final decisions reached by Commissioners in
general rate case decisions. All of these factors
are thoroughly investigated and evaluated by
the Public Staff and the Commission for each
rate case and then presented to the
Commission for consideration as to treatment
of the case. Additionally, the Company and
intervenors representing various groups and
viewpoints offer expert testimony and their
counsel engages in extensive cross examination
of all pertinent testimony presented during the
hearings. Some facts, however, lie beyond the
control of the Commission and can account for
W*
17,689
16,881
17,623
19,785
21,651
even larger increases than the. rate cases
themselves. Cost of gas to the gas companies
from the State's only major supplier,
Transcontinental Gas Pipeline Corporation
(TRANSCO) requires an adjustment to
consumers' . gas rates, but this type of
adjustment is made through a staff conference
rather than through a general rate case. Fuel
consumed for the generation of electricity was
adjusted at intervals through regular open
conference and modified several times over the
years until the current procedure of annual
filings for rate adjustments for fuel cost was
adopted on May 1, 1984. For both gas
companies and electric companies, the price, or
cost adjustment to the ultimate consumer is
not necessarily the result of just general rate
cases. In fact, these cost adjustments can have
as much or an even greater effect on the cost
of services to the ultimate consumer than any
other aspect of the industry.
2. N. C. Utility Rates vs. Consumer Price Index
(CPI)
The Consumer Price Index for All Urban
Consumers (CPl-U) reflects the average change
in the retail prices of a fairly broad but select
"market basket" of consumer goods and
services. It has been the most popular index
because it is reported monthly as opposed to
the quarterly publication of the Gross National
Product Deflater, and it is not revised after its
initial publication. The CPl-U increased 0.74%
from 698.1 in 2013 to 703.3 in 2014.
Figure No. 2-3 shows the electric, gas,
and telephone utility costs compared to the
CPl-U for the years of 1990 through 2000 and
2001 to 2014.
D. REGULATORY FEES
On August 12, 1989, the General
Assembly ratified Senate Bill 1320 entitled "An
Act to Establish Regulatory Fees for Public
Utilities to Defray the Cost to the Utilities
Commission and the Public Staff of Regulating
Public Utilities in the Interest of the Public."
30
Senate Bill 1320 amended Article 14 of Chapter
62 of the General Statutes by adding a new
Section, G.S. 62-302, entitled "Regulatory Fee."
This act became effective on July 1, 1989, and
applies to North Carolina jurisdictional
revenues earned by public utilities on and after
that date. The percentage rate may not exceed
the amount necessary to generate funds
sufficient to defray the estimated cost of the
operations of the Commission and the Public
Staff for a period of one fiscal year. The total
fee imposed on the public utilities may not
exceed 0.25%. The fee is imposed on a
quarterly basis and is due approximately 45
days after the end of each calendar quarter.
The total amount of regulatory fees collected
for the four quarters of calendar year 2014 was
$15,929,558. The fee rate for the same period
of time was 0.13% from January to June and
0.135% from July to December.
FIGURE NO. 2-1
FILINGS AND ORDERS BY INDUSTRY GROUP
C·a-le-n-d-ar Year 2014 ·--~-· ·
I I
lndustrv Orders Filinas
I---- -· . -·---
Electric 413 1,768
Electric Reseller ~ 96
f--·--·----· ----
Telephone 203 1,538
Shared Tenant Service 0 0 ---·-·-----· -·---..
Natural Gas 95 602
'{Vater I_W astewater, in~!uding R_~s~llers _ ·-1!231 _ ----2-,-3·0--1- -
Household Goods Movers 188 8-92-
Payphone Service Providers 9 19
f-----'-'-- ------···- --- -- -
Other (Bus/Broker, Electric Merchant Plant,
_ EMC, Ferry, Small Po!Ver Producer, &__Misc.) 1,287 6,918
-··-·-
Total ~ .456 14, 134
'-··--···· -----
31
c..>
i....
rJ) $900
~ $800
(ti
~ $700
_g $600
f-
$500
$400
$300
$200
$100
$0
FIGURE NO. 2-2
ELECTRIC, GAS, AND TELEPHONE GENERAL RATE CASE DATA
AMOUNTS REQUESTED AND GRANTED (OOO's) FOR THE CALENDAR YEARS 2009-2014
jELECTRICI IGASI I TELEPHC,-N[I
85,000
80,000
75,000
70,000
65,000
60,000
55,000
50,000
:5:888 35,000
30,000
25,000
~g:888
10,000
2012 2013 2014
$5,0~3
2{]09 2010 2{]11 2009 2010 2{]11 2{]12 2013 2{]14
$4,000
$2,000
~ '---~~~~~~~~~~~~~~..__.
2009 2010 2011 2012 2013 2014
I a Requested 11 Granted I I 11 Requested II Granted I L _!IRequestec!_ a Granted )
$ Amount $ Amount $Amount $Amount
Electric Cases Requested Granted % Granted Gas Cases Requested Granted % Granted
2009 496,046 315,163 63.5 2009 0 0 #DIV/O!
2010 46,100 7,682 16.7 2010 0 0 0.0
2011 0 0 #DIV/O! 2011 0 0 0.0
2012 701 ,377 330,987 47.2 2012 0 0 0.0
2013 805,333 413, 192 51 .3 2013 79,826 30,658 38.4
2014 0 0 #DIV/O! 2014 0 0 #DIV/O!
Total 2,048,856 1 067,024 52.1 Total . 79,826 30,658 38.4
$Amount $Amount $Amount $Amount
Telephone Cases Requested Granted % Granted Total Cases Requested Granted % Granted
2009 0 0 0 2009 496,046 315,163 63.5
2010 0 0 0 2010 46,100 7,682 16.7
2011 0 0 0 2011 0 0 #DIV/O!
2012 0 0 0 2012 701 ,377 330,987 47.2
2013 0 0 0 2013 885,159 443,850 50.1
2014 0 0 0 2014 0 0 #DIV/O!
Total 0 0 0 Total 2,128,682 1,097,682 51 .6
FIGURE NO. 2-3
North Carolina Utility Rates vs. Consumer Price Index (CPI)
Average
Average Average Monthly
Residential Residential Telephone Consumer
Electric Gas Rates Bill For Price
Year Rates Per Local Service Index
Ended Per kWh Dekatherm (All Customers) All Urban
December 31 (Cents) ($) ($) Customers
1990 $7.55 $6.00 $22.61 386.1
1991 $7.58 $6.08 $23.00 408.0
1992 $7.71 $6.32 $23.83 420.3
1993 $7.74 $6.80 $23.40 432.7
1994 $7.58 $7.10 $23.10 444.0
1995 $7.61 $6.77 $24.35 456.5
1996 $7.55 $7.35 $25.81 469.9
1997 $7.61 $8.71 $29.01 480.9
1998 $7.62 $8.48 $29.76 488.3
1999 $7.61 $8.07 $31.19 496.9
2000 $7.61 $9.23 $32.29 515.6
1990-2000
%Change 0.79% 53.83% 42.81% 33.54%
2001 $7.74 $11.86 $33.37 530.4
2002 $7.77 $8.93 $32.50 538.8
2003 $7.88 $10.96 $30.94 551.1
2004 $7.98 $12.21 $33.10 565.8
2005 $8.13 $15.09 $33.09 585.0
2006 $8.42 $16.06 $29.59 603.9
2007 $8.72 $15.07 $30.54 621.1
2008 $8.79 $15.96 $34.03 629.7
2009 $9.28 $13.72 $31.14 646.8
2010 $9.56 $12.14 $33.24 656.6
2011 $9.55 $12.26 ** 676.0
2012 $10.31 $11.92 ** 687.8
2013 $10.37 $11.52 ** 698.1
2014 $10.55 $11.44 ** 703.3
2013-2014
%Chan~e 1.74% -0.69% ** 0.74%
**Telecommunications reporting has changed and this information is no longer reported
33
Ill. SUMMARY OF THE COMMISSION
ACTIVITIES AND OPERATIONS-
2014 AND PRIOR YEARS ·
34
A. OVERVIEW OF SIZE, OPERATING
RESULTS, AND NUMBER OF COMPANIES
REGULATED
At December 31, 2014, there were
2,649 companies regulated by the North
Carolina Utilities Commission. Many changes
take place annually in various utility groups
since new companies are being certified and
others are being deleted because of sales,
mergers, cancellations, deregulation, and
abandonments. See Figure No. 3-2.
Figure No. 3-1 shows changes from
2013 to 2014 in the major regulated electric
and gas company's plant investment, total
capitalization, and total customers served or
access lines in service.
B. COMMISSION CASE LOAD: FORMAL AND
INFORMAL HEARINGS
In addition to the multiplicity of
decisions made informally by the Commission
in conferences with its staff and interested
parties, the Commission maintains a full docket
of formal and semiformal hearings and
conferences. There are many small complaints
and inquiries disposed of daily by individual
Commissioners and individual staff heads (both
Commission and Public Staff). These
complaints are handled through discussions
with utility customers, executives,
representatives, organizations, and
associations.
During 2014 there were 105 formal
hearings. Of the 105 formal hearings, 23 were
held out of town and 16 of these were held at
night. The proceedings required extensive time
and effort by personnel of both the
Commission and Public Staff and even more
time in actual public hearings. The Commission
received 14,134 filings and issued 3,456 orders
in 2014.
35
The number of pages transcribed by the court
reporters for the years 1990 through 2014 are
as follows:
No. of Pages Transcribed By:
Commission Outside
Year Re~orters Re~orters
1990 18,803 1,216
1991 22,719 2,268
1992 15,589 198
1993 18,534 0
1994 17,317 0
1995 15,578 0
1996 12,222 6,555
1997 11,998 1,275
1998 13,566 2,855
1999 12,829 1,823
2000 11,858 0
2001 7,362 4,673
2002 7,214 370
2003 7,584 548
2004 7,020 922
2005 5,525 2,151
2006 3,658 1,870
2007 3,609 2,384
2008 4,662 3,265
2009 3,494 814
2010 6,529 588
2011 5,920 5,164
2012 2,621 1,744
2013 700 7,549
2014 4,550 2,882
The Commission currently has one court
reporter on its staff.
Commission hearings continued to
generate keen public interest in 2014. The
Attorney General represented some segments
of the public sector who wished to intervene,
while others provided their own legal counsel.
In addition, the Public Staff intervened in most
cases and made their recommendations to the
Commissioners.
Complaint Activity
Another important facet of the
Commission and Public Staff workload involves
the handling of customer complaints dealing
with all aspects of utility operations and
services. The vast majority of these complaints
are settled without becoming a docketed item
and going into formal hearing proceedings. The
Public Staff's Consumer Services Division
investigated and resolved a majority of these
complaints. To illustrate the magnitude of this
phase of the Utilities Commission workload, the
number of complaints received and handled in
1997 was 8,505 complaints, and this volume
increased consistently in the following years.
The Consumer Services Division · received
15,972 complaints in 2014.
C. GENERAL IMPACT OF THE REGULATED
UTILITIES ON THE ECONOMY OF NORTH
CAROLINA IN 2012
In 2014, gross operating revenues
increased for electric and gas utilities. Figure
No. 3-1 depicts the increase with the three
Class A electric companies showing an increase
of 3.0% in 2014 compared to 2013. The gas
company's gross operating revenues also
increased by 8.3%.
Investment in gross plant allocated to
North Carolina by the electric and gas
companies increased over the previous year.
There was an increase in the total gross plant
allocated to North Carolina for 2014 compared
to the previous year, making a total of over $54
billion as of December 31, 2014
($54,037,433,000J. The increased plant
investment will serve the electric and gas
customers which numbered 4,445,467 in 2014
compared to 4,939,885 in 2013. (Figure No. 3-
3 Gross Plant Allocated to Serve North Carolina
Customers). In 2014 there were 1,732,222
36
telephone access lines reported compared to
1,923,265 in 2013.
(H
-:i
FIGURE NO. 3-1
HIGHLIGHTS OF ACTIVITIES
ELECTRIC, GAS & TELEPHONE UTILITIES
2013 vs. 2014
(Dollars in Thousands)
ELECTRIC - MAJOR COMPANIES - GAS - MAJOR COMPANIES
HIGHLIGHTS OF ACTIVITIES 2013 2014 % Change 2013 2014
Revenues and Expenses {N.C. Only}:
Operating Revenues $10, 136,542 $10,436,228 3.0 $1,355,827 $1,468,973
Operatino Expenses .8,422,760 8,812,896 4.6 1,175,949 1276672
Net Operating Income Including Taxes $1 ,713,782 $1,623,332 (5.3) $179,878 $192,301
Other Income (Deductions) Net (A) 84,480 105,591 25.0 38,363 53,331
Fixed Charges 463,196 517,739 11.8 65, 168 76,070
Net Income $1 ,335,066 $1,211, 184 (9.3) $153,073 $169,562
Plant {N.C. Only}:
Gross Plant (B) $45,223,540 $48,469,015 7.2 $5,301,808 $5,715,299
Accumulated Depreciation 18,353,752 18,956,069 3.3 1,543,041 1,885,943
Net Plant $26,869,788 $29,512,946 9.8 $3,758,767 $3,829,356
Capital Structure:
Stockholders' Equity $13, 183,311 $13,818,257 4.8 $1,436,600 $1,497,189
Lono-T erm Debt 21 ,521 ,179 22,654,487 5.3 $1 ,215,165 $1 ,393,540
Total Capitalization $34, 704,490 $36,472,744 5.1 $1 ,567,537 $1,784,344
Lono-Term Debt% of Total Capitalization 62.0 62.1 0.2 78 78.1
Other Statistics {N.C. Only):
Total Customers Yearly Average 3,850,570 3,334,451 (13.4) 1,089,315 1,1 11,016
Average Number of kWhs Per Residential Customer 13,285 13,630 2.6
Average Number of Dekatherms Per Residential Cust. 61 67
Average Revenue Per Residential Customer:
Electric Residential Customer (Cents Per kWh) $10.37 $10.55 1.7
Gas Residential Customer ($ Per Dekatherm) $11 .52 $11 .44
Total Access Lines in Service
(A) Includes all Allowance for Funds Used During Construction (AFUDC) and all Extraordinary and Delayed Items.
(8) Includes Plant in Service, Under Construction, Held for Future Use, and Leased to Others.
NIA - Not Available
% Change
8.3
8.6
6.9
39.0
16.7
10.8
7.8
22.2
1.9
4.2
14.7
13.8
0.7
2.0
9.8
(0.7)
NOTE: Effective in 2011 , telephone companies are no longer required to file financial information; thus, it is no longer available.
TELEPHONE - ALL CLASSES
2013 2014 % Change
$0 $0 NIA
NIA
$0 $0 NIA
NIA NIA NIA
NIA NIA NIA
$0 $0 NIA
NIA
NIA
$0 $0 NIA
NIA NIA NIA
NIA NIA NIA
NIA NIA NIA
NIA NIA NIA
1,923,265 1,732,222 (9.9)
FIGURE NO. 3-2
MAJOR UTILITIES REGULATED AND REPORTING TO THE
NORTH CAROLINA UTILITIES COMMISSION
AS OF DECEMBER 31, 2014
UTILITY
BUS/BROKER
ELECTRIC
ELECTRIC COOPERATIVES
ELECTRIC MERCHANT PLANTS
ELECTRIC RESELLER
FERRIES
NATURAL GAS:
LOCAL DISTRIBUTION COMPANIES
INTRASTATE PIPELINE
MOTOR CARRIERS OF HOUSEHOLD GOODS
SMALL POWER PRODUCERS
TELEPHONE:
COMPETING LOCAL PROVIDERS
INCUMBENT LOCAL PROVIDERS
LONG DISTANCE CARRIERS
PAYPHONE SERVICE PROVIDERS
SHARED TENANT SERVICES
WATER I WASTEWATER
WATER RESELLER
TOTAL
38
14
5
31
10
31
9
5
1
261
599
167
16
291
63
18
113
1015
2,649
~ I
Ill so
c
~
iii
45
40
35
30
25
20
15
10
5
0
I
2009
FIGURE NO. 3-3
Gross Plant Allocated to Serve NC Customers
Electri~-Gas-Telephone (2009-2014)
2010 2011 2012 2013
• ELECTRICITY
• GAS
ll TELEPHONE
• TOTAL GROSS
PLANT
2014
IV. ELECTRIC POWER INDUSTRY
40
.~...
SERVICE TERRITORIES
(counties served)
• Duke Energy Carolinas
• Duke Energy Progress
• Duke Energy Carolinas/
Duke Energy Progress overlapping counties
Dominion North Carolina Power
Dominion North Carolina Power/
Duke Energy Progress overlapping counties
"N" "
North Carolina Public Power Communities
• NCMPAl Participants
• NCEMPA Participants
~~
NCMPA1 fil·
~,,... M, ....
High Point•
ij; Morganton •
• Granite Falls• Statesvllle • Lexington
• Drexel
Ashevllle •
-~
~
ijj
• Newton
• Malden • Landis
Llnc:olnton • Cor~ellus ~-
Bostic: • Shelby • Cherryvllle • Hunter$vllle
1
• · _.1, • r:t·,,.. • • Charlotte
Gastonia
~ • Plnevllle
• Monroe
Out-Of-Stoto A••ocloto Momboro
VIRGINIA Bedford · Danville· Mart lnsvllle • Rlc:hl<inds
• Albemarle
O Wholesale Members
•Major North carol lr1a Cities
SOUTH CAROLINA Abbeville· Bamberg • Bennettsville · Camden · Clinton
Easley· Gatrney • Greer • Laurens • Newberry • Rock Hiii • Union · Westminster
:~
Loulsb~rg •
Benson•
·- ·
~
Wllmlngtone
i'I ' I
$.9~
llistJiet 1
B&..RC !:leclm Ct· upera•i.· ~
Blue Ridge ~le;;:nc Membership Corpc·r.it1on
Ce:itral BEctric Membership Corpliahon
l:rer;irUmled l:le;:nc Membership Corporation
F1en:h E.road Ele-:tm M~ mbeiship Co1pornlioo
Haywood £1~'k M;mbmh p :Or1wat1on
Pet Dee fle-;1ric Membnhrp Corcora~J~
Randolph £1ectric Me11bmh1p Cor:iv•ation
nutherford [fec:nc Memt:€rship Corporation
Surry· Yadkm El~·:lnc \\EmJnh1p Cor~o ral1::m
Union Power '.:ooperatm
C""M'
TEMA Directorate Districts
Dislricl 2
H:i ifl:.< Ell!ctnc M~mber!>tH~· Corp:mtiono
LumbE"t' ni11er [l~ric l.famb!!rship Coipor.?tlon
Me,l--1enloU1 u t::leclrt~ !Jc operatJ~e
~onhern l\eck E:;iectnr.: C:lc.pera.tr.·~
~r~dm()rt ( l~c:nc i..ember~hlp C!lrpc0rat1()n
Pnri;e Georve E1ectnc Coop•r•tr1e
An..'lnni<f FlPr..tnr. MPmhPl'!<hl(l r.nrpnr;::itir.n
&iult"r 1!1~ 1 tle.t11•~1\1,; nb >:r~nr.i Cori;;o1a!J.on
Sou:hs1de Electric Cooperatr1e
-n Co•umy Flrm1r. Mr.nhr.r~ll • r· r.nrnorauon
Wik€' Eh1ctn: Mumo;mhp Corpor;,tion
Electric Cooperative Territories Di ~trir.I 3
MtJ El;iclric Co0JperJt1v?
AIJ.:mark [lectr1c Men1~nrii: Gurpt1·,tiun
lllbernarle- Hertford 8 EnergyUnited - St1tesville
Blue Ridge - Lenoir 9 Fou1 County - Buq.1..iw
Rmrswr:k - 81\'lllotte 10 French H·oad - Marshall
Cape Hattef3s - Buxton 11 Hllifax - Enfielc
Careret-C1a•1en - Morehead Cty 12 HJYWQoc -Waynesvilk'
Central - SGnford 13 Jones-Onslow - Jackseonv1lle
Edgecombe-Maron County- 14 Lum bee ~iver - Red Springs
TarbtJIO 15 Pile Dee - Wadt!>lJoru
16 Piedmont- Hllsborough
17 Pitt & Greene- Fainiv~~
18 Ri!lldr·lph- Asheboro
19 Roanc-ke - Moskie
20 RuU1e;ford -Forest City
:?1 South H1ver - Dunn
22 Surry·Yackin- Dobson
23 Ti<Mand - Pa1l~uo
2-1 Tri·Gounty- Dudley
25 Union - Monroe
?6 Wa.<e -Wake Forest
* NC:MC:'NGAEGrrEMA Raleigh
Br Josw·c~ El~:tm M~bmhip Cc.rp:xatJon
C3~e Hattt'ras El~ctric M~nbersh1p C:rpora11on
C.arteret-Cravff1 Oe"1ric Mein~ership C:roo-rati!lll
CdoeccmnE·Mar:!r. G:>uitr Dtctnc l,lairb~n:h t• Corpcrc:ll:n
Fw1 Gourn; St'!.!JiL M:1 :t:rer Shiμ Gl:!Jl•JMtion
J1.1r~-~·nsl;i·i.· BactnG \'.en1t.i:ir~h ~' Gc111;irahen
Pit.(. Gm:re Ei~llC M9m;ero/11i:i Cori;o·.at100
~o JlhJ• n \tJr~filn~ EJclln;; Guupcraltv~
I dd.1f"1J Htr·J111. Mw11t11i -1· 1~1 r.1111.1111-1l11Jll
FIGURE 4-3
MAJOR ELECTRIC COMPANIES
At December 31, 2014
(Fully Regu lated)
Duke Energy Progress, Inc.
D/B/A DUKE ENERGY PROGRESS
411 Fayetteville Street
Raleigh, North Carolina 27601-1748
Organized: April 6, 1926; merged 7/2/2012
States Served: North Carolina and
South Carolina
Duke Energy Corporation
D/B/A DUKE ENERGY CAROLINAS, LLC
526 S. South Church Street
Charlotte, North Carolina 28202
Organized: May 1917
States Served: North Carolina and
South Carolina
Virginia Electric And Power Company
D/B/A DOMINION NORTH CAROLINA
POWER
One James River Plaza
Richmond, Virginia 23219
Organized: June 29, 1909
States Served: North Carolina
and Virginia
SMALL ELECTRIC COMPANIES
At December31,2014
COMPANY COUNTY***
New River Power & Light Watauga
Western Carolina University. Jackson
***Entire County is not served by the
companies listed.
44
MUNICIPAL ELECTRIC SYSTEMS AND
SOURCE OF POWER*
(Not Regu lated)
MUNICIPALITY SOURCE OF POWER
Albemarle NCMPA No. 1
Apex NCEMPA
Ayden NCEMPA
Belhaven NCEMPA
Benson NCEMPA
Black Creek City of Wilson
Bostic NCMPA No. 1
Cherryville NCMPA No. 1
Clayton NCEMPA
Concord Duke Energy
Cornelius NCMPA No. 1
Dallas Duke Energy
Drexel NCMPA No. 1
Edenton NCEMPA
Elizabeth City NCEMPA
Enfield VEPCO
Farmville NCEMPA
Fayettevi I le Duke Energy Progress
Forest City Duke Energy
Fountain Town of Farmville
Fremont NCEMPA
Gastonia NCMPA No. l
Granite Falls NCMPA No. 1
Greenville NCEMPA
Hamilton NCEMPA
Hertford NCEMPA
High Point NCMPA No. 1
Highlands NCMPA No. 1
Hobgood NCEMPA
Hookerton NCEMPA
Huntersville NCMPA No.1
Kings Mountain Duke Energy
Kinston NCEMPA
LaGrange NCEMPA
Landis NCMPA No. 1
Laurinburg NCEMPA
Lexington NCMPA No. 1
Lincolnton NCMPA No.1
Louisburg NCEMPA
Lucama City of Wilson
FIGURE 4-3 (continued}
MUNICIPALITY SOURCE OF POWER*
Lumberton
Macclesfield
Maiden
Monroe
Morganton
Murphy
New Bern
Newton
Oak City
Pikeville
Pinetops
Pineville
Red Springs
Robersonville
Rocky Mount
Scotland Neck
Selma
Sharpsburg
Shelby
Smithfield
Southport
Stantonsburg
Statesville
Tarboro
Wake Forest
Walstonburg
Washington
Waynesville
. Wilson
Windsor
Winterville
Total: 71
NCEMPA
Edgecombe County
NCMPANo.1
NCMPA No. l
NCMPA No. 1
NCMPA NO.l
NCEMPA
NCMPA No.1
NCMPA No. l
NCEMPA
Edgecombe County
NCMPA No. l
NCEMPA
NCEMPA
NCEMPA
NCEMPA
NCEMPA
Nash/Edgecombe/Wilson
NCMPA No. 1
NCEMPA
NCEMPA
Wilson County
NCMPA No.1
NCEMPA
NCEMPA
Greene County
NCEMPA
Haywood County
NCEMPA
NC Power
Greenville Utilities
45
NCMPA No. 1 = North Carolina Municipal
Power Agency Number 1
NCEMPA = North Carolina Eastern
Municipal Power Agency
FIGURE NO. 4-4
N. C. ELECTRIC MEMBERSHIP CORPORATION
AND SOURCE OF POWER
December 31, 2014
(Regulated as to Quality of Service Only)
ELECTRIC MEMBERSHIP CORPORATION HEADQUARTERS
Albemarle Hertford
Blue Ridge Lenoir
Brunswick Shallotte
Cape Hatteras Buxton
Carteret-Craven Morehead City
Central Sanford
Edgecombe-Martin County Tarboro
EnergyUnited Statesville
Four County Burgaw
French Broad Marshall
Halifax Enfield
Haywood Waynesville
Jones-Onslow Jacksonville
Lumbee River Red Springs
Pee Dee Wadesboro
Piedmont Hillsborough
Pitt & Greene Farmville
Randolph Asheboro
Roanoke Rich Square
Rutherford Forest City
· South River Dunn
Surry-Yadkin Dobson
Tideland Pantego
Tri-County Dudley
Union Monroe
Wake Wake Forest
*NCEMC - North Carolina Electric Membership Corporation
** SEPA - Southeastern Power Administration
***IM - Independent Members of NCEMC
SOURCE OF POWER*
NCEMC, SEPA
NCEMC, SEPA, IM
NCEMC, SEPA
NCEMC
NCEMC, SEPA
NCEMC, SEPA
NCEMC, SEPA
NCEMC, SEPA, IM
NCEMC, SEPA
CP&L, SEPA
NCEMC, SEPA
NCEMC, SEPA, IM
NCEMC, SEPA
NCEMC, SEPA
NCEMC, SEPA
NCEMC, SEPA, IM
NCEMC, SEPA
NCEMC, SEPA
NCEMC, SEPA
NCtMC, SEPA, IM
NCEMC, SEPA
NCEMC
NCEMC, SEPA
NCEMC, SEPA
NCEMC, SEPA
NCEMC, SEPA
****These EMCs independently purchase capacity and energy requirements, as needed, above
those provided by NCEMC and SEPA.
46
FIGURE NO. 4-4 (Continued)
FOREIGN ELECTRIC MEMBERSHIP CORPORATIONS
OPERATING IN NORTH CAROLINA
December 31, 2014
ELECTRIC MEMBERSHIP CORPORATION HEADQUARTERS SOURCE OF POWER
Blue Ridge Mountain
Serves Cherokee and Clay Counties
Broad River Electric Cooperative, Inc.
Serves Cleveland County
Mecklenburg Electric Cooperative, Inc.
Serves Granville and Warren Counties
Tri-State
Serves Cherokee County
Young Harris, GA.
Gaffney, S.C.
Chase City, VA.
McCaysville, GA
TVA
Saluda Electric
Corporation
SEPA, Old
Dominion
TVA
Mountain Electric Cooperative, Inc. Mountain City, TN TVA
Serves Avery, Burke, and Watauga Counties
47
A. GENERAL COMMENTS
There are three regulated investor­owned
electric utilities (IOUs) operating under
the laws of the State of North Carolina and
subject to the jurisdiction of the Commission. All
three of the IOUs own generating facilities. They
are Duke Energy Progress, LLC (Progress);
Duke Energy Carolinas, LLC (Duke); and
Virginia Electric and Power Company (VEPCO)
which does business in North Carolina under the
name Dominion North Carolina Power (NC
Power).
Duke Energy Progress. LLC
(Progress), an investor-owned utility, operates
electric generation plants fueled by nuclear, coal,
natural gas, oil, conventional hydroelectric and
renewable energy. In 2014 Progress provided
electricity to 1,319,000 North Carolina
customers. The North and South Carolina
Commissions govern retail electric rates and the
Federal Energy Regulatory Commission
governs wholesale electric rates. Progress is
headquartered in Raleigh, North Carolina.
Duke and Progress, the two largest
electric IOUs in North Carolina, together supply
about 95% of the utility-generated electricity
consumed in the state. Approximately 21% of
the IOUs' 2014 total electric sales were to the
wholesale market, consisting primarily of electric
membership corporations and municipally­owned
electric systems.
Duke Energy Carolinas, LLC (Duke) is
an energy company headquartered in Charlotte,
North Carolina. On July 2, 2012, Duke Energy
merged with Progress Energy, with Duke Energy
continuing as the surviving corporation. Duke,
an investor-owned utility, provided electricity to
1,896,000 North Carolina customers in 2014.
Duke operates electric generation plants fueled
by nuclear, coal, natural gas, oil, conventional
hydroelectric, pumped storage hydroelectric and
renewable energy.
Virginia Electric and Power Company
(VEPCO) is the principal subsidiary of Dominion
Resources, Inc., a publicly traded holding
company. VEPCO provides service to
northeastern North Carolina, where it operates
as Dominion North Carolina Power (NC Power).
VEPCO's service territory includes the urban
corridor stretching from the suburbs of
48
Washington, D.C., through Richmond to the
Hampton Roads and Norfolk area of Virginia to
North Carolina. NC Power provided electricity to
119,000 North Carolina customers in 2014.
VEPCO's existing generating resources, located
primarily in Virginia, are at multiple sites
distributed geographically around its service
territory. VEPCO's electric generation plants are
fueled by nuclear, coal, natural gas, oil,
conventional hydroelectric, pumped storage
hydroelectric, and renewable energy. Dominion
Resources, Inc. is headquartered in Richmond,
Virginia.
The Commission does not regulate the
retail rates of municipally-owned electric
systems or electric membership corporations;
however, the Commission does have jurisdiction
over the licensing of all new electric generating
plants and large scale transmission facilities built
in North Carolina.
Electric Membership Corporations
(EMCs) are independent, non-profit
corporations. There are 31 EMCs serving
1,054,000 customers in North Carolina,
including 26 that are headquartered in the state.
The other five are headquartered in adjacent
states. These EMCs serve customers in 95 of
the state's 100 counties. Twenty-five of the
EMCs are members of the North Carolina
Electric Membership Corporation (NCEMC), an
umbrella service organization. NCEMC is a
generation and transmission services
cooperative that provides wholesale power and
other services to its 25 members.
Six EMCs operating in the state are not
members of NCEMC. As noted above, five are
incorporated in contiguous states and provide
service in limited · areas across the border into
North Carolina. The sixth is French Broad EMC.
Two non-IOU electric utilities subject to
the Commission's jurisdiction are very small
distribution companies wholly located in North
Carolina. Both are university-owned:
New River Light and Power, located in Boone,
and Western Carolina University, located in
Cullowhee. New River Light and Power is an all­requirements
customer of Blue Ridge Electric
Membership Corporation, and Western Carolina
University is an all-requirements customer of
Duke. ,
B. RENEWABLE ENERGY AND ENERGY
EFFICIENCY
Renewable Energy and Energy Efficiency
Portfolio Standard
On August 20, 2007, with the signing of
Session Law 2007-397 (Senate Bill 3), North
Carolina became the first state in the Southeast
to adopt a Renewable Energy and Energy
Efficiency Portfolio Standard (REPS). Under this
law, investor-owned electric utilities are required
to increase their use of renewable energy
resources and/or energy efficiency such that
those sources meet 12.5% of their needs in
2021 . EMCs and municipal electric suppliers are
subject to a 10% REPS requirement. The
requirements under the law phase in over time.
In 2010, electric power suppliers were required
to ensure that 0.02% of their retail electric sales
in North Carolina came from solar energy
resources. In 2012, electric power suppliers
were required to meet 3% of their sales via
renewable energy and energy efficiency, and
the solar energy requirement increased to
0.07%. Also in 2012, requirements related to
swine waste and poultry waste took effect,
although those requirements were delayed by
the Commission as discussed below.
On October 1, 2015, the Commission
submitted its seventh annual report to the
Governor, the Environmental Review
Commission, and the Joint Legislative
Commission on Governmental Operations
regarding Commission implementation of, and
electric power supplier compliance with, the
REPS. The report is available on the
Commission's web site, www.ncuc.net.
Senate Bill 3 requires the Commission to
monitor compliance with REPS and to develop
procedures for tracking and accounting for
renewable energy certificates (RECs). In 2008
·the Commission opened Docket
No. E-100, Sub 121 and established a
stakeholder process to propose requirements for
a North Carolina Renewable Energy Tracking
System (NC-RETS). On October 19, 2009, the
Commission issued an RFP via which it selected
a vendor, APX, Inc., to design, build, and operate
the tracking system. NC-RETS began operating
49
July 1, 2010, consistent with the requirements of
Session Law 2009-475.
As of October 20, 2014, NC-RETS had
issued 26,944,781 RECs and 7,598,087
energy efficiency certificates. In addition,
11 ,472,678 RECs had been imported into NC­RETS
accounts. (These certificates were
issued by registries located outside of North
Carolina.) About 412 organizations, including
electric power suppliers and owners of
renewable energy facilities, have established
accounts in NC-RETS. About 887 renewable
energy facilities and utility energy efficiency
programs participate as "projects" in NC­RETS,
which means that NC-RETS issues
RECs or energy efficiency certificates to the
project owners based on the facilities' energy
output, or the savings achieved by the energy
efficiency program.
REPS Compliance
For 2010 and 2011, each electric power
supplier was subject to a solar obligation of . 02%
of retail sales. At the end of 2010 and 2011 , each
electric power supplier was required to have
placed solar RECs that they acquired to meet
their 201 O and 2011 REPS solar set-aside
obligation into a compliance account within NC­RETS.
When the Commission concluded its
review of each electric power supplier's REPS
compliance report, the associated RECs were
permanently retired.
Starting in 2012, North Carolina's electric
power suppliers were subject to an increased
solar obligation of .07% of retail sales, and this
requirement increased to .14% in 2015. In
addition, starting in 2012 they were subject to: 1)
a general REPS obligation of 3% of retail sales;
2) a swine waste resource obligation of .07% of
retail sales, and 3) their pro-rata share of a
170,000 megawatt-hour statewide aggregated
poultry waste resource obligation. With the
exception of the swine and poultry waste
requirements (discussed below), all of the
electric power suppliers have complied with
their 2010-2013 REPS obligations. The
Commission approved the 2014 REPS
compliance of Duke on July 30, 2015. On
November 17, 2015, the Commission
approved the 2014 REPS compliance for
Progress. On December 16, 2015, the
Commission approved the 2014 REPS
compliance for VEPCO, and on March 29,
2016, the Commission approved the 2014
REPS compliance for the EM Cs and municipal
power suppliers
For all electric power suppliers, the
general REPS obligation increased to 6
percent of retail sales in 2015.
In 2012, the electric power suppliers
requested that their 2012 and 2013 swine and
poultry waste obligations be delayed by two
years. On November 29, 2012, the
Commission issued an Order eliminating the
2012 requirement for swine waste resources
and delaying for one year the requirement for
poultry waste resources.
In 2013, the electric power suppliers
requested an additional one-year delay to both
the swine and poultry waste obligations, which
was granted by the Commission on March 26,
2014.
In 2014, the electric power suppliers
requested an additional delay to the swine
waste requirement, but not the poultry waste
requirement. On November 13, 2014, the
Commission issued an Order Modifying the
Swine Waste Set-Aside Requirement and
Providing Other Relief in Docket No. E-100,
Sub 113. This ·order delayed the swine waste
requirement until 2015; requested the Public
Staff to facilitate two stakeholder meetings in
2015; and required electric power suppliers to
file tri-annual reports detailing their efforts to
secure swine waste resources.
On December 1, 2015, the Commission
issued an order that delayed the advent of the
swine waste requirement until 2016, and
maintained at 170,000 MWh the poultry waste
requirement (rather than having it increase to
700,000).
Energy Efficiency
Electric power suppliers in North Carolina
are required to implement demand-side
management (DSM) and Energy Efficiency (EE)
measures and use supply-side resources to
establish the least cost mix of demand reduction
50
and generation measures that meet the
electricity needs of their customers. Energy
reductions through the implementation of DSM
and EE measures may also be used by the
electric power suppliers to comply with REPS.
Duke, Progress, NC Power, EnergyUnited,
Halifax, and GreenCo have filed for and received
approval for EE and DSM programs.
NC GreenPower
In October 2003, NC GreenPower was
launched as a voluntary program to supplement
the State's existing power supply with electricity.
generated from renewable energy resources like
the sun, wind, water, and organic matter. NC
GreenPower's first project came online in 2004;
two years later, the organization cut the ribbon
for its first landfill generator and wind turbine. In
2008, the program added a carbon offset
product, giving citizens the opportunity to offset
emissions caused by driving and other activities
by mitigating greenhouse gases via landfill or
hog waste lagoon methane capture projects.
NC GreenPower projects have
generated nearly 567 billion kilowatt-hours of
energy, and donors have helped provide about
$7 million in incentive payments to the owners of
more than 900 · renewable energy projects
located in almost every county across NC.
That's the equivalent of providing 39,400 houses
with energy for a year. Carbon offset projects
have mitigated 31, 100 tons of greenhouse
gases, the equivalent of planting 5.2 million
trees.
On April 1, 2015, NC GreenPower
announced a new pilot program to provide
matching grants for the installation of solar
photovoltaic generation at schools. NC
GreenPower's pilot will likely award four schools
with 3.5-kW arrays, monitoring equipment, and
curriculum for educators.
TRANSMISSION AND GENERATION
INTERCONNECTION ISSUES
Transmission Planning
The North Carolina Transmission
Planning Collaborative (NCTPC) was
established in 2005. Participants (transmission­owning
utilities, such as Duke and Progress, and
transmission-dependent utilities, such as
municipal electric systems and EMCs) identify
the electric transmission projects that are
needed.to be built for reliability and estimate the
costs of those upgrades. The NCTPC's January
15, 2015, report stated that 8 major transmission
projects are needed in North Carolina by the end
of 2024 at an estimated cost of $209 million. For
more information, visit the NCTPC's website at
www.nctpc.net/nctpc.
On July 21, 2011, the FERG issued
Order No. 1000, entitled "Transmission
Planning and Cost Allocation by Transmission
Owning and Operating Public Utilities". This
order requires transmission owners to
participate in new regional and inter-regional
transmission planning efforts. Duke and
Progress have complied with Order No. 1000
by participating in the Southeastern Regional
Transmission Planning (SERTP) process.
On July 3, 2013, Session Law 2013-
232 was enacted. This law states that only a
public utility may obtain a certificate to build a
new transmission line (except a line for the
sole purpose of interconnecting an electric
power plant). In this context, a public utility
includes IOUs, EMCs, joint municipal power
agencies, and cities and counties that operate
electric utilities.
State Generator Interconnection Standards
On June 4, 2004, in Docket No. E-100,
Sub 101, Progress, Duke, and NC Power
jointly filed a proposed model small generator
interconnection standard, application, and
agreement to be applicable in North Carolina.
In 2005, the Commission approved small
generator interconnection standards for North
Carolina.
In Session Law 2007-397, the General
Assembly, among other things, directed the
Commission to "[e]stablish standards for
interconnection of renewable energy facilities
and other nonutility-owned generation with a
generation capacity of 10 megawatts or less to
an electric public utility's· distribution system;
provided, however, that the Commission shall
adopt, if appropriate, federal interconnection
standards."
51
On June 9, 2008, the Commission
issued an Order revising North Carolina's
Interconnection Standard. The Commission
used the federal standard as the starting point
for all state-jurisdictional interconnections
(regardless of the size of the generator) and
made modifications to retain and improve
upon the policy decisions made in 2005. The
Commission's Order required regulated
utilities to update any affected rate schedules,
tariffs, riders, and service regulations to
conform with the revised standard.
On July 9, 2008, Duke filed a motion for
reconsideration regarding whether an external
disconnect switch should be required for
certified inverter-based generators up to 1 O kW.
On December 16, 2008, the Commission issued
an Order in which it granted Duke's motion for
reconsideration and gave electric utilities the
discretion to require external disconnect
switches for all interconnecting generators.
However, if a utility requires such a switch for a
certified, inverter-based generator under 10 kW,
the utility shall reimburse the generator for all
costs related to that installation.
On April 8, 2014, the North Carolina
Sustainable Energy Association (NCSEA)
requested that the Commission consider
revising its small generator interconnection
standards in light of changes that have been
made at the federal level and in other states.
The Commission asked the Public Staff to
facilitate a meeting of interested parties to
discuss potential changes to North Carolina's
interconnection standards, and established a
schedule for parties to file comments and reply
comments. After several stakeholder
meetings, and several requests for time
extensions, the parties filed a proposal to
revise the State's interconnection standards
that was largely, but not entirely, supported by
stakeholders.
The Commission issued an Order
Approving Revised Interconnection Standard
on May 15, 2015. That Order made
substantial changes to the procedures for
requesting to interconnect a generator to the
electric grid. Most of these changes were
recommended by the stakeholders with the
intent of addressing a back-log of
interconnection requests. Parties filed
comments explaining these changes were
needed so that owners of proposed generation
projects would be incented to either move
ahead with their projects, or withdraw them
from the utilities' interconnection queues. The
more significant changes in the State's
interconnection standards were: 1) a project's
ability to be expedited is now based not only
on the project's size, but also on the size of the
line it would connect to, and its distance from
a substation; 2) a new process for addressing
"interdependent" projects was added, where
one generator needs to decide whether it is
going to move ahead in order for the utility to
determine that capacity exists to interconnect
a second generator; 3) developers must
provide a deposit of at least $20,000; 4)
developers must demonstrate that they have
site control; and 5) developers must pay for
upgrades before the utility begins construction.
The utilities are required to file a quarterly
report to the Commission reporting on their
progress in addressing the interconnection
queue backlog. The Public Staff is to convene
a workgroup of interested parties within two
years to discuss whether the State's small
generator interconnection standards require
additional revisions.
Net Metering
"Net metering" refers to a billing
arrangement whereby a customer that owns and
operates an electric generating facility is billed
according to the difference over a billing period
between the amount of energy the customer
consumes and the amount of energy it
generates. In Senate Bill 3, codified at
G.S. 62-133.8(i)(6), the General Assembly
required the Commission to consider whether it
is in the public interest to adopt rules for electric
public utilities for net metering of renewable
energy facilities with a generation capacity of
one megawatt or less.
On March 31 , 2009, following hearings
on its then-current net metering rule, the
Commission issued an order requiring Duke, NC
Power, and Progress to file revised riders or
52
tariffs that allow net metering for any customer
that owns and operates a renewable energy
facility that generates electricity with a capacity
of up to one megawatt. The customer shall be
required to interconnect pursuant to the
approved generator interconnection standard,
which includes provisions regarding the study
and implementation of any improvements to the
utility's electric system required to accommodate
the customer's generation, and to operate in
parallel with the utility's electric distribution
system. The customer may elect to take retail
electric service pursuant to any rate schedule
available to other customers in the same rate
class and may not be assessed any standby,
capacity, metering, or other fees other than
those approved for all customers on the same
rate schedule. Standby charges shall be waived,
however, for any net-metered residential
customer with electric generating capacity up to
20 kW and any net-metered non­residential
customer up to 100 kW. Credit for
excess electricity generated during a monthly
billing period shall be carried forward to the
following monthly billing period, but shall be
granted to the utility at no charge and the credit
balance reset to zero at the beginning of each
summer billing season. If the customer elects to
take retail electric service pursuant to any time­of-
use (TOU) rate schedule, excess
on-peak generation shall first be applied to offset
on-peak consumption and excess
off-peak generating to offset off-peak
consumption; any remaining on-peak generating
shall then be applied against any remaining off­peak
consumption. If the customer chooses to
take retail electric service pursuant to a TOU­demand
rate schedule, it shall retain ownership
of all RECs associated with its electric
generation. If the customer chooses to take
retail electric service pursuant to any other rate
schedule, RECs associated with all electric
generation by the facility shall be assigned to the
utility as part of the net metering arrangement.
On February 24, 2014, NCSEA filed a
Motion for Disclosure and Equitable Relief
requesting that the Commission direct Duke
and Progress to: (1) guarantee, at a minimum,
the continued availability of the current net­metering
terms and conditions for 10 years for
each residential and commercial customer
who installs a net-metered rooftop solar
system prior to issuance of a final order in any
net-metering proceeding initiated in the
coming year; and (2) disclose the analysis
upon which Duke was basing its messaging
that net metering in North Carolina is unfair.
The Commission requested comments on
NCSEA's motion.
On May 28, 2014, the Commission
issued an Order Denying Motion stating that
there is no petition before the Commission to
change the current net-metering policy, and
that NCSEA's request for disclosure had
become moot because Duke's analysis had
become public.
FEDERAL ENERGY INITIATIVES
Open Access Transmission Tariff
In April 1996, the FERG issued Order
Nos. 888 and 889, which established rules
governing open access to electric transmission
systems by wholesale customers and required
the construction and use of an Open Access
Same-time Information System (OASIS). In
Order No. 888, the FERG also required utilities
to file standard, non-discriminatory open access
transmission tariffs (OATTs) under which service
is provided to wholesale customers such as
electric cooperatives and municipal electric
providers. As part of this decision, the FERG
asserted federal jurisdiction over the rates,
terms, and conditions of the transmission service
provided to retail customers receiving unbundled
service while leaving the transmission
component of bundled retail service subject to
state control. In Order No. 889, the FERG
required utilities to separate their transmission
and wholesale power marketing functions and to
obtain information about their own transmission
system for their own wholesale transactions
through the use of an OASIS system on the
Internet, just like their competitors. The purpose
of this rule was to ensure that transmission
owners do not have an unfair advantage in
wholesale generation markets.
53
Regional Transmission Organizations
In December 1999, the FERG issued
Order No. 2000 encouraging the formation of
regional transmission organizations (RTOs),
independent entities created to operate the
interconnected transmission assets of multiple
electric utilities on a regional basis. In
compliance with Order No. 2000, Duke,
Progress, and South Carolina Electric and Gas
(SCEG) filed a proposal to form GridSouth
Transco, TLC (GridSouth), a Carolinas-based
RTO. The utilities put their GridSouth-related
efforts on hold in June 2002, citing regulatory
uncertainty at the federal level. The GridSouth
organization was formally dissolved in
April 2005.
Dominion, NC Power's parent, filed an
application with the Commission on April 2,
2004, in Docket No. E-22, Sub 418, seeking
authority to transfer operational control of its
transmission facilities located in North Carolina
to PJM Interconnection, an RTO headquartered
in Pennsylvania. The Commission approved the
transfer subject to conditions on April 19, 2005.
The Commission has continued to
provide oversight over NC Power and PJM by
using its own regulatory authority, engaging in
regional cooperation with other state
commissions, and participating in . proceedings
before the FERG. Together with the other state
commissions with jurisdiction over utilities in the
PJM area, the Commission is involved in the
activities of the Organization of PJM States, Inc.
(OPSI).
Transmission Rate Filings
In 2010, the Commission and the Public
Staff jointly intervened in a NC Power
transmission rate case before the FERG, arguing
that some transmission costs should not be
passed onto all transmission customers.
Specifically, the Commission and the Public Staff
argued that North Carolina citizens should not be
required to pay the incremental cost of
undergrounding electric transmission lines when
a viable overhead option was available. On
September 17, 2012, the Commission joined
with NCEMC, Old Dominion Electric
Cooperative, and the Virginia Municipal Electric
Association No. 1 to file a reply brief in this case.
A FERG-appointed administrative law judge
convened settlement negotiations, but the
parties were not able to reach a settlement. On
December 2, 2014, FERG assigned the
dispute to an administrative law judge and a
hearing was held October 8, 2015. After the
administrative law judge issues its
recommendation, FERG will make a final
decision in the matter.
Cyber Security
Federal and State regulators are
increasingly concerned about cyber security and
physical threats to the nation's power system.
Cyber security threats may be posed by foreign
nations or others intent on undermining the
United States' electric grid. North Carolina's
utilities are working to comply with federal
standards that require them to identify critical
components of their infrastructure and install
additional protections from cyberattacks. The
NC Utilities Commission meets with utility
officials periodically to understand the cyber
threats the utilities are facing and the actions
they are taking to address these threats.
Physical Security
In April of 2013 a substation near San
Jose, California, suffered a well-planned
attack during which firearms were used to
severely damage electric equipment. In
response to this and other incidents, the FERG
on March 7, 2014, required NERC to quickly
develop new reliability standards that would
require each owner and operator of the bulk
electric system to perform a risk assessment
of its systems to identify critical facilities;
evaluate . potential threats to, and
vulnerabilities of those facilities; and develop
and implement a security plan to protect
against attacks on those facilities. NERC
developed the physical security standards and
filed them with FERG on May 23, 2014. On
July 17, 2014, FERG proposed modifications
to the draft standards, including the ability for
governmental authorities to add or subtract
facilities from the list of critical facilities for
which physical security measures would be
required. After receiving