Report of the North Carolina Utilities Commission

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LETTER OF TRANSMITTAL
December 6, 2010
The Honorable Beverly Perdue
The Governor of North Carolina
Raleigh, North Carolina
Dear Governor Perdue:
We hereby present for your consideration the 2009 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 2009 with statistical and analytical data for the operations of the utilities
through 2008.
Respectfully submitted,
Edward S. Finley, Jr., Chairman
Lorinzo L. Joyner
William T. Culpepper, III
Bryan E. Beatty
Susan W. Rabon
ToNola D. Brown- Bland
Lucy T. Allen
Prepared by
North Carolina Utilities Commission
Division of Fiscal Management
4325 Mail Service Center
Raleigh, NC 27699- 4325
Telephone No. 919- 733- 7680
TABLE OF CONTENTS
Chapter Page
Letter of Transmittal
I. Organization and History 1
A. Commission Staff and Organization Chart 2
B. Biographical Sketch of Each Commissioner 3
C. Biographical Sketch of Executive Director 6
D. Public Staff and Organization Chart 10
E. Historical Sketch of Development 11
II. Selected Commission Activities Through December 2009 20
A. General 21
B. Electric 21
C. Consumer Pocketbook Issues 23
D. Regulatory Fees 24
III. Summary of the Commission Activities and Operations -
2009 and Prior Years 28
A. Overview of Size, Operating Results, and Number of Companies
Regulated 29
B. Commission Case Load: Formal and Informal Hearings 29
C. General Impact of the Regulated Utilities on the Economy of
North Carolina in 2008 30
IV. The Electric Power Industry 34
A. General Comments 42
B. Renewal Energy and Energy Efficiency 43
C. Retail Customer Growth-- Comments 51
D. Annual Customer Usage 52
E. Comparisons of Average Residential Monthly Bills 52
F. Advanced Energy Corporation 52
G. Generating Capability -- Nuclear Power Impact and Cogeneration 53
H. Source and Disposition of the Electric Operating Revenue Dollar 54
I. Energy Sales 54
J. Statistical Summary Data 54
i
TABLE OF CONTENTS - Continued
Chapter Page
V. The Natural Gas Industry 66
A. A Brief History of the Natural Gas Industry 69
B. Plant Investment and Expansion 70
C. Growth Trends-- Customers, Revenues, Volume 70
D. Comparisons of Residential Bills, Usage, and Cost Per Dekatherm 71
E. Gas Trackings-- Pass Ons-- Special Situations, and General Rate Cases 71
F. Natural Gas Pipeline Safety 73
G. Source and Disposition of the Gas Revenue Dollar 74
H. Statistical Summary Data 74
VI. The Communications Industry 90
A. Brief Review of the Telephone Industry-- General 93
B. Customer Growth and Impact on Plant Investment 94
C. Demands and Quality of Service 95
D. Extended Area Service ( EAS) 95
E. Telephone Rates-- Comments 95
F. Source and Disposition of Revenues-- Comments 96
G. Plant Investments-- Comments 96
H. Statistical Summary Data 96
VII. The Water and Sewer Industry 105
A. General Comments 107
B. Commission Activities 107
C. Regulated vs. Nonregulated Monthly Charges 108
D. Statistical Summary Data 108
VIII. The Transportation Industry-- Household Goods Movers 136
A. Classification of Motor Freight Carriers 137
B. Duties of the Transportation Division 137
C. Commission Activities 137
D. Summary of Operating Data 137
E. Legislative Action 138
ii
TABLE OF CONTENTS - Continued
Chapter Page
IX. The Transportation Industry-- Motor Passenger Carriers 144
A. General Comments 145
B. Intercity Motor Passenger Carriers 145
C. Fare Increases Authorized-- Intercity 145
D. Preemption of Regulation Over Motor Carriers of Passengers in
Charter Bus Transportation 145
iii
CHART OF TABLES, CHARTS, AND GRAPHS
Figure
No. Title Page
1- 1 Commission Staff-- Organization Chart 7
1- 1A Leadership of State Regulatory Activities 1891- 1933 7
1- 1B North Carolina Utilities Commissioners Listed in Order of Appointment
with Approximate Years of Service 8
1- 2 Public Staff-- Organization Chart 10
1- 3 Summary of the Receipts and Expenditures-- Fiscal Years Ended June 30, 2009
Ended June 30, 2009 19
2- 1 North Carolina Utility Rates vs. Consumer Price Index ( CPI) 25
2- 2 Electric, Gas, and Telephone General Rate Case Data--
Amounts Requested and Granted for Calendar
Years 2001- 2009 26
2- 3 Filings and Orders by Industry Group--- Calendar Year 2009 27
3- 1 Highlights of Activities-- Electric, Gas, and Telephone Utilities 31
3- 2 Major Utilities Regulated and Reporting to the North Carolina Utilities
Commission 32
3- 3 Gross Plant Allocated to Serve North Carolina Customers-- Electric, Gas,
and Telephone for the Years 2003- 2008 33
4- 1 North Carolina Electric IOU Service Area Map 35
4- 2 Map of North Carolina Electric Membership Corporations 36
4- 2A Map of ElectriCiites North Carolina Membership 37
4- 3 Major N. C. Electric Companies and Municipal Electric Systems 38
4- 4 N. C. Electric Membership Corporations and Source of Power 40
4- 5 Customer Growth for Major Electric Companies 55
4- 6 Average Annual Residential Consumption ( kWh/ Customer) 56
4- 7 Residential Electric Service -- Major Companies ( Avg. Price per kWh) 57
4- 8 General Rate Increases for Electric Companies for the year 2008 58
4- 9 Comparative Typical Residential Electric Bills-- 2003- 2009 59
4- 10 Source and Disposition of the Operating Revenue Dollar-- Pie Chart Form--
Electric Companies ( N. C. Operations 60
4- 11 Source and Disposition of the Operating Revenue Dollar --
Major Electric Companies-- 2003- 2008 61
4- 12 Fuel Costs-- 2003- 2008 61
4- 13 Energy Sales by Class-- Major Electric Companies 62
4- 14 Major Electric Companies-- Income Statement, Balance Sheet, and
Other Statistical Items for 2002- 2008 63
5- 1 Map of Natural Gas Service Areas in North Carolina 67
5- 2 North Carolina Gas Companies 68
5- 3 North Carolina Municipal Gas Systems 68
5- 4 Natural Gas Companies-- Class A-- Gross Plant Investments-- 1980- 2008 75
5- 5 Customers by Classification-- Yearly Average 1980- 2008 76
iv
CHART OF TABLES, CHARTS, AND GRAPHS - Continued
Title Page
5- 6 Gas Companies-- Customer Growth by Class for 2002- 2008 77
5- 7 Gas Company Energy Sales by Classes 78
5- 8 Summary of Natural Gas Deliveries by Dekatherms, Revenues, and
Customers by Classifications for 2003- 2008 79
5- 9 Regulated and Municipal Gas Systems-- Number of Customers, Total Revenues
From Sales of Gas and Transportation of Gas, and Total Dekatherms Sold for
2007- 2008 81
5- 10 Residential Natural Gas Customers' Average Dekatherm Usage and
Cost Data-- 2003- 2008 82
5- 11 Gas Tracking Changes Approved-- 2008 83
5- 12 General Rate Increases Approved-- 2008 84
5- 13 Source and Disposition of the Gas Operating Revenue Dollar 85
5- 14 Source and Disposition of the Revenue Doll-- Gas Companies-- 86
5- 15 Class A Gas Companies-- Income Statement, Balance Sheet, and Customer
Statistics for Years 2003- 2008 87
6- 1 Local Exchange Telephone Companies and Shared Tennant Service
Providers Operating in North Carolina 91
6- 1A Regulated Local Exchange Telephone Companies Operating in North
Carolina-- 1980, 1985, 1990, 1995, 2000 and 2005; Number of Total
Telephones/ Access Lines in Service, Exchanges, and Density Data 97
6- 2 Regulated Local Exchange Telephone Companies Operating in North
Carolina -- Number of Total Access Lines 98
6- 3 Access Lines in Services as of December 31, 2007, 2008 and 2009 99
6- 4 North Carolina Regulated Local Exchange Telephone Rates vs. U. S. Average
Monthly Telephone Rates 100
6- 5 Source and Disposition of the Revenue Dollar-- Regulated Telephone
Companies-- Pie Chart for 2008 101
6- 6 Regulated Local Exchange Telephone Companies' Plant Investment Per
Access Lines 102
6- 7 Gross and Net Telephone Plant Allocated to North Carolina Operations
for the Years 2007 and 2008 103
6- 8 Summary of Selected Data-- Income Statement, Balance Sheet, and
Statistical Items for the Calendar Years 2007 and 2008 104
7- 1 Map of Distribution of Customers Served by Regulated Water & Sewer
Utilities 106
7- 2 Distribution Summary of Systems and Customers of All N. C. Regulated
Water and Sewer Utilities by Counties 109
7- 2A Distribution of All N. C. Regulated Water and Sewer Utilities by Counties 112
7- 3 Water and sewer Companies Regulated -- Revenues, Customers, and
Number of Systems 127
v
CHART OF TABLES, CHARTS, AND GRAPHS - Continued
Figure
No. Title Page
7- 4 Noncurrent Data of Water and Sewer Companies Regulated 133
7- 5 Plant, Revenue, and Customer Growth of all Regulated Water and Sewer
Companies in North Carolina for the years 2000, 2001, 2002, 2003, 2004, 2005
2006, 2007, and 2008 134
7- 6 Comparative Monthly Charges for Residential Water and Sewer Service in
North Carolina at January 1, 2009 135
8- 1 Household Goods Movers-- All Classes Revenue, Employee Wages 139
8- 2 Summary of HHG Operation Report Information -- 2008 143
9- 1 Motor Passenger Carriers Franchised to Operating in North Carolina 147
9- 2 Motor Passenger Brokers Franchised to Operate in North Carolina 148
9- 3 Motor Passenger Carriers Regular Route -- Summary of Total Company
Revenues and Expenses 149
9- 4 Motor Boat Commission Carriers as of December 31, 2008 150
vi
I. ORGANIZATION AND HISTORY
1
A. COMMISSION STAFF AND ORGANIZATION CHART
There were seven Commissioners and 57 Commission Staff positions as of January 1,
2010. Commissioners are appointed by the Governor subject to the confirmation by the
General Assembly by joint resolution.
NORTH CAROLINA UTILITIES COMMISSION
COMMISSION STAFF
Commissioners and Division Personnel
as of January 1, 2010
Commissioners
Edward S. Finley, Jr., Chairman
Robert V. Owens, Jr. Bryan E. Beatty
Commissioner Commissioner
Lorinzo L. Joyner Susan Warren Rabon
Commissioner Commissioner
William T. Culpepper, III ToNola D. Brown- Bland
Commissioner Commissioner
Division Directors and Chief Clerk
Chief Clerk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Renné C. Vance
Administration Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Robert H. Bennink, Jr.
Operations Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Donald R. Hoover
Fiscal Management Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mac Ellis
2
B. BIOGRAPHICAL SKETCH OF EACH
COMMISSIONER
Edward S. Finley, Jr., Chairman:
Commissioner Finley, 60, was born in North
Wilkesboro, North Carolina. He holds a
Batchelor 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 expires June 30, 2011.
Governor Easley appointed Commissioner
Finley as Chairman of the Commission on
April 10, 2007. Chairman Finley was
reappointed as Chairman for a second four-year
term effective July 1, 2009.
Chairman Finley is active in
community and civic affairs. He and his
wife, Ginger, have two sons.
Robert V. ( Bobby) Owens, Jr.,
Commissioner: Born December 21, 1932,
in Manteo, North Carolina; Manteo High
School; East Carolina University. Co- owner
and manager of Owens’ Restaurant; Co-owner
of fast food franchise; Director of
Governor’s Eastern Office ( 1993- 1997);
Dare County Board of Commissioners
( 1970- 1978); Chairman, Dare County Board
of Commissioners ( 1984- 1997); North
Carolina Tax Study Commission ( 1986-
1988); North Carolina State Banking
Commission ( 1982- 1984); North Carolina
State Parks and Recreation Commission
( 1980- 1982); Member, Manteo Lions Club,
past President; Member, Manteo Masonic
Lodge; Member, Dare County Shrine Club,
past President; Leadership Award for
Promotion of Education and Technology in
Dare County Schools; Leadership Award for
Promotion of Dare County Babe Ruth World
Series; Dare County Citizens of the Year
Award; Town of Manteo Citizens of the Year
Award; Leadership Award for North Carolina
Mentally Handicapped; Member, Manteo
Baptist Church; United States Coast Guard;
assumed Commissionership on August 29,
1997. Commissioner Owens was
reappointed for a second eight- year term
that began on July 1, 2005, and expires on
June 30, 2013, married ( Sarah), two
children. Commissioner Owens resigned
effective March 1, 2010.
Lorinzo Little Joyner, Commissioner:
Commissioner Joyner was born in
Wadesboro, North Carolina on May 8, 1948.
She attended public schools in Anson
County and graduated from West Ansonville
High School in 1965. She graduated with
high honors from NC A& T State University,
Greensboro, with a B. S. in English
Education, in 1969. Joyner became a high
school English teacher, working in the
public schools of Greensboro and Durham.
She left the teaching profession in 1978 to
enter the School of Law at the University of
North Carolina at Chapel Hill and received
her J. D. in 1981. Joyner was appointed to
the Commission by Governor Mike Easley
on January 22, 2001. She is a member of
the Telecommunications Committee of the
National Association of Regulatory Utility
Commissioners ( NARUC), the Consumer
Affairs Committee, and the North American
Numbering Council ( NANC). Joyner was
appointed to the Commission by Governor
Mike Easley on January 22, 2001. That
term as Commissioner expired on June 30,
2009. She was reappointed by Governor
Beverly Perdue for the term that began on
July 1, 2009 and ends on June 30, 2017.
Commissioner Joyner has held a
variety of positions during her 25 year
career as a government lawyer. She served
as an Assistant Appellate Defender in the
Office of the Appellate Defender from 1981
– 1983. She became a staff lawyer for the
Public Staff of the North Carolina Utilities
Commission in 1983, and continued her
work in public utilities law after joining the
Utilities Section of the North Carolina
Attorney General’s Office. Joyner also
served as an adjunct professor at the North
Carolina Central University School of Law in
Durham. In 1991, she became a Special
Deputy Attorney General, supervising the
legal assistance provided to the
Commissioner and Department of
3
Insurance, the State Health Plan, the
Department of the Secretary of State, the
State Auditor, the Department of
Commerce, the North Carolina State Ports
Authority, and the North Carolina Rural
Electrification Authority. Commissioner
Joyner has been active in various bar-related
and community service
organizations, including the North Carolina
Association of Black Lawyers, the Capital
City Lawyers Association, the Tenth Judicial
Bar, Race Study Circles, and Alpha Kappa
Alpha Sorority, Incorporated. She has also
served as a member of the Salvation Army
Advisory Board and the Board of Directors
for HopeLine, Inc., a crisis intervention
program.
Joyner is a member of Watts Chapel
Baptist Church. She and her husband,
Charles, have two children and three
grandchildren.
Howard N. Lee, Commissioner:
Howard Lee was appointed to the
Utilities Commission by Governor Mike
Easley to complete the eight- year term of
Mike Wilkins. Commissioner Lee’s
commissionership began April 1, 2005.
Commissioner Lee resigned effective
March 31, 2009.
William Thomas Culpepper, III,
Commissioner: Born Elizabeth City, North
Carolina January 23, 1947. Preparatory
education: Hampden- Sydney College ( B. S.,
1968). Legal education: Wake Forest
University ( J. D., 1973). Recipient: Edenton
Jaycees Distinguished Service Award,
1975. Director, Edenton Chamber of
Commerce, 1974- 1976. Chairman, Chowan
County Unit, American Cancer Society,
1974- 1976. Chairman, Chowan County
Chapter, American Red Cross, 1974- 1977.
Advisor, Chowan County Teen- Dem Club,
1974- 1978. Recipient: Most Outstanding
Teen- Dem Advisor in NC, 1976. Chairman,
Historic Edenton, Inc., 1976- 1977.
Chairman, Edenton Historic District
Commission, 1976- 1980. President,
Chowan County Heart Fund, 1977.
President, Edenton Jaycees, 1980- 1981.
President, Edenton Rotary Club 1986- 1987.
Chairman, Chowan County Industrial
Facilities and Pollution Control Financing
Authority, 1979- 2005. Chairman, Chowan
County Democratic Party 1987- 1991.
Member, Edenton Historical Commission,
1987- present. President, First Judicial
District Bar Association, 1987- 1988.
Recipient, Perquimans Restoration
Association Harvey Award for Distinguished
Public Service, 1997. Practicing attorney in
Edenton, N. C., 1973- 2005. County
Attorney, Chowan County, 1979- 2005.
Member, Edenton Savings and Loan Board
of Directors, 1979- 1993. Member, Branch
Banking and Trust Company, Edenton Local
Board of Directors, 1993- present. Member,
N. C. House of Representatives, 1993- 2005.
Member, N. C. General Statutes
Commission, 1995- 2005. Member, N. C.
Courts Commission, 1995- 2005. Chairman,
Committee on Rules, Calendar and
Operations of the House, 1999- 2005. Co-chairman,
Appropriations Subcommittee on
Justice and Public Safety, 1999- 2002.
Member, Joint Legislative Commission on
Government Operations, 1999- 2005.
Member, Legislative Services Commission,
1999- 2005. Co- chairman, Joint Legislative
Ethics Commission, 2003- 2005, Member,
UNC Wilmington Board of Visitors, 2005 –
present. Assumed Commissionership with
the North Carolina Utilities Commission:
January 1, 2006; expires June 30, 2013.
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
expires on June 30, 2009. Governor
Beverly Perdue reappointed him for the
term that commenced on July 1, 2009 and
ends on June 30, 2017.
Born March 10, 1958 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
4
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 immediate 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:
Susan Rabon was born in Onslow County,
North Carolina on May 6, 1960, and grew
up in Danville, Virginia, where she
graduated from George Washington High
School in 1978. In 1982, she graduated
from North Carolina State University with a
B. A. summa cum laude, in Political Science.
She received her J. D. from the University of
Virginia School of Law in 1986.
Upon graduation from law school
and having been admitted to the North
Carolina State Bar in the summer of 1986,
she clerked for The Honorable Jack L.
Cozort, North Carolina Court of Appeals.
She entered private practice in 1987 with
the firm, Carr, Swails, Huffine & Crouch of
Wilmington, NC. In 1993, she joined the
staff of the Attorney General’s Office in
Raleigh as Special Counsel and in 1994
became Deputy 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 with incoming Governor
Michael F. Easley. As Senior Assistant for
Administration she served as one of the
Governor’s top three advisors and oversaw
the day- to- day administrative operations of
the Governor’s Office. She provided the
Governor with advice in many areas of state
government but particularly in the areas of
budget, personnel and technology.
Commissioner Rabon was appointed
by Governor Mike Easley and assumed the
Commissionership on January 7, 2009. Her
term as Commissioner ends on June 30,
2015. She 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. 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 for an
unexpired term ending on June 30, 2009
and for a full term beginning on July 1, 2009
and ending on June 30, 2017.
Born in Burlington, North Carolina,
Commissioner Brown- Bland attended
Eastern Alamance High School in Mebane,
graduating as valedictorian of her class.
She is a Phi Beta Kappa graduate of the
University of North Carolina at Chapel Hill,
and in 1987, she graduated from Duke
University School of Law.
Brown- Bland began her professional
career as federal Law Clerk to the
5
Honorable Alexander B. Denson, United
States Magistrate Judge for the Eastern
District of North Carolina, and in 1989,
entered private practice in Greensboro, NC
with the law firm Hill Evans Jordan Beatty
( formerly Nicholas, Caffrey, Hill, Evans &
Murrelle). In 1995, 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.
She 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 became a
member of the North Carolina Utilities
Commission staff, where she was an
attorney in the Administrative Division.
Since 2005, she has been Associate
General Counsel for the City of Greensboro.
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 that
provided residential service to autistic
adults. She is presently a member of the
Board of Trustees of her church. She and
her husband, Andre, make their home in
Alamance County.
Lucy T. Allen, Commissioner:
Commissioner Allen was born in
the Franklin County seat, Louisburg,
North Carolina. She graduated from
Meredith College with a B. A. in English
and attended Duke University. She
taught middle school language arts for
six years. Subsequently, she served
eight years on the Franklin County
Board of Education and sixteen years as
Mayor of Louisburg. She was elected to
the North Carolina House of
Representatives in 2002, the first of her
four terms.
Allen is active in many
community, civic and public service
roles. She has three sons: Sonny, Hill
and Stuart; two daughters- in- law, Willa
and Julie; three grandsons: Felix, Henry
and Parker; and a dog named Hunter.
Governor Beverly Perdue
appointed Allen to the North Carolina
Utilities Commission on April 12, 2010,
to fill a term that expires on June 30,
2013.
C. BIOGRAPHICAL SKETCH OF
EXECUTIVE DIRECTOR
Robert P. Gruber, Executive Director,
Public Staff, Born April 22, 1943; B. A.
University of North Carolina, 1965; J. D.
University of North Carolina School of Law,
1968; private law practice in Raleigh, 1968-
1973; Staff Attorney, North Carolina
Department of Justice, 1973- 1975; Special
Deputy Attorney General, Utilities Section,
1975- 1978; General Counsel, North
Carolina Utilities Commission, 1978- 1983;
appointed Executive Director, Public Staff of
the North Carolina Utilities Commission,
July 1, 1983 for six- year term; reappointed
July 1, 1989 for second six- year term,
reappointed for third six- year term July 19,
1995, reappointed for a fourth six- year term
on July 1, 2001, and reappointed for a fifth
six- year term on July 1, 2007.
6
FIGURE NO. 1- 1
COMMISSION STAFF- ORGANIZATION CHART
January 1, 2010
FIGURE NO. 1- 1A
LEADERSHIP OF STATE REGULATORY ACTIVITIES 1891- 1933
1. James W. Wilson ( 1891- 1896)** Railroad Commission of N. C.
2. Thomas W. Mason ( 1891- 1894) Railroad Commission of N. C.
3.* E. C. Beddingfield ( 1891- 1896) Railroad Commission of N. C.
4. S. Otho Wilson ( 1895- 1896) Railroad Commission of N. C.
5. L. C. Caldwell ( 1897- 1898)** Railroad Commission of N. C.
6. Jonathan H. Pearson ( 1897- 1898) Railroad Commission of N. C.
7. D. H. Abbott ( 1897- 1903) Railroad Commission of N. C.
8. Franklin McNeill ( 1899- 1911)** N. C. Corporation Commission
9. Sam L. Rogers ( 1899- 1910) N. C. Corporation Commission
* E. C. Beddingfield ( 1904- 1908) N. C. Corporation Commission
10. Henry C. Brown ( 1910- 1910) N. C. Corporation Commission
11. William T. Lee ( 1911- 1932)** N. C. Corporation Commission
12. Edward L. Travis ( 1911- 1916)** N. C. Corporation Commission
13. George P. Pell ( 1912- 1932) N. C. Corporation Commission
14. A. J. Maxwell ( 1917- 1928) N. C. Corporation Commission
15. 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
Administrative
Secretary
Administrative
Secretary
Commissioner
Administrative
Secretary
Commissioner
Administrative
Secretary
Commissioner
Water, Sewer and
Transportation
Group
Electric and
Telecommunications
Group
Natural Gas and
Pipeline Safety
Operations
Division
Fiscal Management
Division
Computer Support Attorneys Court Reporters
Office of the
Chief Clerk
Administrative
Division
Administrative
Secretary
Commissioner
Administrative
Secretary
Commissioner
Administrative
Secretary
Commissioner
Chair
7
FIGURE NO. 1- 1B
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 O. 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)
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 O. Wells ( 1985- 1993)**
42. William W. Redman, Jr. ( 1987- 1995)**
43. Charles H. Hughes ( 1989- 1997)
8
FIGURE NO. 1- 1B CONTINUED
NORTH CAROLINA UTILITIES COMMISSION
COMMISSIONERS LISTED IN ORDER OF APPOINTMENT
APPROXIMATE YEARS OF SERVICE GIVEN IN PARENTHESES ( PLEASE SEE NOTE)
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- )
54. Dr. Robert K. Koger ( 1999- 1999)
55. Sam J. Ervin, IV ( 1999- 2009)**
56. Lorinzo L. Joyner ( 2001- )**
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, III ( 2006- )
62. Edward S. Finley, Jr. ( 2007- )**
63. Bryan E. Beatty ( 2009- )
64. Susan Warren Rabon ( 2009- )
65. ToNola D. Brown- Bland ( 2009- )
* 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.
9
D. PUBLIC STAFF AND ORGANIZATION CHART
As of January 1, 2010, 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
January 1, 2010
Executive Director
Robert P. Gruber
Administrative Officer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Carl Goolsby
Accounting Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Elise Cox
Communications Division. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . John Garrison
Consumer Services Division. . . . . . . . . . . . . . . . . . . . . . . . .. . . . Carl Goolsby
Economic Research Division . . . . . . . . . . . . . . . . . . . . . . . .. . . . Thomas W. Farmer, Jr.
Electric Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . James McLawhorn
Gas Division. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jeffrey L. Davis
Legal Division. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Antoinette R. Wike
Transportation Rates Division . . . . . . . . . . . . . . . . . . . . . . .. . . . Carol Stahl
Water Division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ken Rudder
FIGURE NO. 1- 2
PUBLIC STAFF - ORGANIZATION CHART
Administrative Assistant
Accounting Communications Consumer Services
Natural Gas Water Economic Research
Transportation Legal Electric
Executive Director
10
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 au-thority
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 1990 through 2009.
1990-- Major legislation affecting the
regulation of utilities:
( a) Regulation of Natural Gas Service
Agreements. Chapter 962, House Bill 2227,
G. S. 62- 36( b), allows the Commission to
direct the franchised natural gas local
distribution companies to negotiate in good
faith to enter into lower cost service
agreements with their customers, when it
finds that additional natural gas service
agreements with interstate or intrastate
pipelines will provide increased competition
in North Carolina's natural gas industry and
will likely result in lower costs to consumers
along with the reduction in risk of service
interruptions. This bill was ratified and
made effective on July 18, 1990.
1991-- Major legislation affecting the
regulation of utilities:
( a) Extended Expiration Date of Utility
Fuel Charge Adjustment. Chapter 129,
House Bill 407, G. S. 62- 133.2 will be
repealed effective July 1, 1997. On July 1,
1983, and every two years thereafter, the
Utilities Commission shall provide a report
to the Joint Legislative Utility Review
Committee summarizing the procedures
conducted pursuant to G. S. 62- 133.2 during
the preceding two years and recommending
whether this section should be continued,
repealed or amended. This act was ratified
on May 27, 1991.
( b) An Act to Repeal the Sunset
Provision for the Utility Regulatory Fee
Statute. Section 5, Chapter 787 of the 1989
Session Laws reads as rewritten: " This act
shall become effective July 1, 1989, and
shall apply to public utility North Carolina
jurisdictional revenues earned on or after
that date." This act was ratified and made
effective on June 28, 1991. This act
repealed the sunset provision of the
regulatory fee originally scheduled to expire
July 1, 1991.
( c) Exemption of cellular telephone
service. Chapter 82, Senate Bill 551, is an
act to permit the Utilities Commission to
exempt cellular telephone service from
regulation under Chapter 62. Nothing in this
section shall be construed to diminish any
other authority granted the Commission in
this Chapter. This act was ratified on May
13, 1991.
( d) On July 8, 1991, the North Carolina
General Assembly ratified House Bill 1039
Chapter 568 which provided for " the
construction of facilities in and the extension
of natural gas service to unserved areas in
order to promote the public welfare
throughout the State and to that end to
authorize the creation of an expansion fund
for each natural gas local distribution
company ( LDC) to be administered under
the supervision of the North Carolina
Utilities Commission." The expansion fund
is to be used by a Local Distribution
Company to construct natural gas facilities
in areas within the company's franchised
territory that otherwise would not be feasible
for the company to construct and the
sources of the funding will be: 1. refunds to
LDC's from the company's suppliers of
natural gas and transportation service, 2.
expansion surcharges by the LDC's charges
to customers purchasing natural gas or
transportation services, and 3. other
sources approved by the Commission.
( e) House Bill 83, Chapter 689, G. S.
62- 302 ( b)( 2) percentage rate changed to
0.09% of each public utility’s North Carolina
jurisdictional revenues earned during each
quarter. This bill was ratified on July 13,
11
1991, and made effective July 1, 1991.
1992-- Major legislation affecting the
regulation of utilities:
Public Utilities Regulatory Fee Rate
Revised. Chapter 811, House Bill 945,
reduced the percentage rate to be used in
calculating the public utility regulatory fee
under G. S. 62- 302( b)( 2) to 0.085% of each
public utility's North Carolina jurisdictional
revenues earned during each quarter that
begins on or after July 1, 1992. This bill
was ratified on June 30, 1992, and made
effective July 1, 1992.
1993-- Major legislation affecting the
regulation of utilities:
An Act to Exempt Campgrounds for
Transients and Marinas, Which Resell
Electricity From the Definition of a Public
Utility. The term " Public Utility" shall not
include electricity by campgrounds or
marinas provided that they charge no more
than the actual electricity supplied to it. The
electricity used is measured by an individual
metering device, with the rates prominently
displayed and electricity sales are for
occupants only. This bill was ratified
and made effective on July 15, 1993.
1994-- Major legislation affecting the
regulation of utilities:
On July 29, 1995, HB 941 was ratified
exempting mobile radio communication from
public utility definition and from Commission
jurisdiction.
1995-- Major legislation affecting the
regulation of utilities:
( a) Public Utilities Regulatory Fee Rate
Revised. Chapter 178, House Bill 993,
increased the percentage rate to be used in
calculating the public utility regulatory fee
under G. S. 62- 302( b)( 2) to 0.10% of each
public utility’s North Carolina jurisdictional
revenues earned during each quarter that
begins on or after July 1, 1995. This bill
was ratified on June 5, 1995, and made
effective July 1, 1995.
( b) On July 29,1995, the North Carolina
General Assembly ratified House Bill 941
Chapter 523 to make certain changes in
Chapter 62 to comply with the Federal
preemptive legislation. This enactment of
legislation necessitates the revision by the
Commission of certain of its Rules and
Regulations as set forth in Chapter 1.
Practice and Procedure, Chapter 2. Motor
Carriers, and Chapter 4. Filing of
Transportation Tariffs. This matter was
brought about due to the January 1, 1995,
Federal legislation which preempted the
intrastate regulation of prices, routes, and
services for the transportation of all property
except household goods and the
transportation of passengers.
1996-- Major legislation affecting the
regulation of utilities:
( a) Public Utilities Regulatory Fee Rate
Remains Same. Chapter 670, House Bill
1345 set the percentage rate for the public
utility regulatory fee at 0.10% of each public
utility’s North Carolina jurisdictional
revenues. This is the rate that was
established in 1995. This bill was ratified on
June 21, 1996.
( b) Chapter 673, House Bill 1172 was
enacted to transfer the Rail Safety Section
from the Utilities Commission to the
Department of Transportation and directed
the Secretary of Transportation to study the
need for continuation of the rail safety
inspection program. This act was ratified on
June 21, 1996 and became effective July 1,
1996.
1997-- Major legislation affecting the
regulation of utilities:
( a) Senate Bill 727 was ratified on
August 26, 1997. Part III. Public Utility
Regulatory Fee sets the percentage rate to
be used in calculating the public utility
regulatory fee under G. S. 62- 302( b)( 2) as
nine- hundredths percent ( 0.09%) of each
public utility’s North Carolina jurisdictional
revenues each quarter that begins on or
after July 1, 1997.
12
( b) Senate Bill 38. An Act to Establish
the Study Commission on the Future of
Electric Service in North Carolina. The 23
member Study Commission on the Future of
Electric Service in North Carolina was
created. Ratified April 22, 1997.
( c) House Bill 990. An Act to Exempt
Certain Nonprofit and Consumer- Owned
Water or Sewer Utilities and Certain Small
Water or Sewer Utilities From Regulation by
the Utilities Commission. Ratified August
19, 1997.
( d) House Bill 994. An Act to Allow Pay
Telephone Providers to Obtain Line Access
From Competitive Local Providers of
Telephone Service and to Eliminate the
Statutory Requirement That Line Access
Rates be Set on a Measured Rate Basis.
Ratified on June 9, 1997.
1998-- Major legislation affecting the
regulation of utilities:
( a) Senate Bill 1327. An Act to
Preserve the Tax- Exempt Status for Piped
Natural Gas Sold by Municipalities, to Make
the Taxes on Other Sales of Piped Natural
Gas More Uniform, to Adjust the Cities’
Distribution of the Tax Proceeds Until
June 30, 2000, to Direct the Revenue Laws
Study Committee to Determine the Impact
of the Tax on the Distribution to Cities, and
to Direct the Utilities Commission to Study
the Issue of Transportation Rates. Section
15. The Utilities Commission shall study the
transportation rates charged by the local
distribution companies to transport piped
natural gas from the interstate pipeline to
the consumer. Ratified June 30, 1998.
( b) House Bill 1328. An Act to Provide
That a Franchised Natural Gas Distribution
Company That is Not Providing Service to
at Least Some Portion of Camden,
Currituck, Dare, or Tyrrell Counties by July
1, 1998, Shall Lose Its Exclusive Franchise
Rights to the County Not Being Served. This
act applies only to the above mentioned
counties and was ratified on June 16, 1998.
( c) House Bill 1094. An Act to Repeal
Obsolete or Preempted Provisions of the
General Statutes Affecting Railroads, to
Recodify Certain Railroad Statutes, and to
Make Conforming Changes and Clarifying
Changes. Ratified August 26, 1998.
Approved September 4, 1998.
( d) Senate Bill 1354. An Act to
Authorize the Issuance of General
Obligation Bonds of the State Subject to a
Vote of the Qualified Voters of the State, to
Address Statewide Critical Infrastructure
Needs By Providing Funds ( 1) for Grants
and Loans to Local Government Units for
Water Supply Treatment Works, and Water
Conservation and Water Reuse Projects
and ( 2) for Grants, Loans, or Other
Financing to Public or Private Entities for
Construction of Natural Gas Facilities.
( b) Natural Gas Bonds.
$ 200,000,000 to provide grants, loans, or
other financing to natural gas local
distribution companies, persons seeking
natural gas distribution franchises, State or
local government agencies, or other entities
for construction of natural gas facilities.
Ratified September 3, 1998.
( e) Senate Bill 882. Section 126. G. S.
62- 302( d) Unspecified Civil Penalty for
Violating Safety Standards for Gas Pipeline
Facilities. Maximum Amount of Penalty Not
to Exceed the Maximum Amount if Penalty
Had Been Imposed by Secretary of U. S.
Department of Transportation Under 49
U. S. C. Approximately § 1679 ( a) Forfeiture
of $ 1,000 by Public Utilities for Providing
Unauthorized Services or For Failure to
Provide Services as Authorized. Ratified on
October 22, 1998. Approved October 31,
1998.
1999-- Major legislation affecting the
regulation of utilities:
( a) Senate DRS8542*- LL056( 2.16) An
Act to Provide For Reimbursement of
Additional Expenses of the Commission of
the Future of Electric Service in North
Carolina From the Utilities Commission and
Public Staff Fund. Section 1. Section 10.1
of S. L. 1997- 483 rewritten to add fiscal
years 1997- 98, 1998- 99, and 1999- 2000.
This act became effective July 1, 1999.
13
( b) Senate Bill 546. An Act to Authorize
the Establishment of a Telecommunications
Relay Service to Assist Deaf and Hearing
Impaired Persons, Including Those Who
Also Have Vision Impairment. Section 1.
G. S. 62- 157 was amended to include those
who also have vision impairment. Ratified
July 20, 1999.
( c) House Bill 1289. Section 1. The
percentage rate to be used in calculating
the public utility regulatory fee under G. S.
62- 302( b)( 2) is nine- hundredths percent
( 0.09%) of each public utility’s North
Carolina jurisdictional revenues earned
during each quarter that begins on or after
July 1, 1999. Section 2. The annual fee
imposed on the North Carolina Electric
Membership Corporation under G. S. 62-
302( b1), S. L. 1999- 180, for the 1999- 2000
fiscal year is two hundred thousand dollars
($ 200,000). Ratified July 20, 1999.
Approved August 5, 1999.
( d) House Bill 613. Part VI.---- Future of
Electric Service Funding Continuation ( H. B.
777- McComas; S. B. 266- Hoyle) Section
6.1. Section10.1 of S. L. 1997- 483 reads as
rewritten: Notwithstanding G. S. 62- 302( d),
all expenses during the 1997- 98, 1998- 99,
and 1999- 2000 fiscal years of the Study
Commission on the Future of Electric
Service in North Carolina, established in
S. L. 1997- 40, shall be reimbursed from
funds in the Utilities Commission and Public
Staff Fund. There is allocated initially one
hundred thousand dollars ($ 100,000) from
the Utilities Commission and Public Staff
Fund to the General Assembly for the
purpose of enabling the Study Commission
on the Future of Electric Service in North
Carolina to organize and begin its work.
Under the certification of the need for
additional funds by the co- chairs of the
Study Commission on the Future of Electric
Service in North Carolina for the works of
the Commission, the Utilities Commission
shall transfer the additional funds from the
Utilities Commission and Public Staff Fund
to the General Assembly for that purpose.
Effective June 30, 1999. Ratified July 21,
1999.
( e) House Bill 162. ( Session Law 1999-
456) An Act to Make Technical Corrections
and Conforming Changes to the General
Statutes as Recommended by the General
Statutes Commission; and to Make Various
Other Changes to the General Statutes
and Session Laws. Section 17. G. S. 62-
159( a) reads as rewritten: (“ a)” In order to
facilitate the construction of facilities in and
the extension of natural gas service to
unserved areas, the Commission may
provide funding through appropriations from
the General Assembly or the proceeds of
general obligation bonds as provided in this
section to enter ( i) an existing natural gas
local distribution company; ( ii) a person
awarded a new franchise; or ( iii) a gas
district for the construction of natural gas
facilities that it otherwise would not be
economically feasible for the company,
person, or gas district to construct.”
( f) Section 18. G. S. 62A- 25( d) reads
as rewritten: “( d) In no event shall any
invoice for reimbursement be approved for
payment of costs of any CMRS provider
exceeding one hundred twenty- five percent
( 125%) of the service charges remitted by
such CMRS provider unless prior approval
of such expenditures is received from the
Board. If the total amount of invoices
submitted to the Board and approved for
payment exceeds the amount in the
Wireless Fund in any month, CMRS
providers that have invoices approved for
payment shall receive a pro rata share of
the Wireless Fund, based on the relative
amount of their approved invoices available
that month, and the balance of the
payments will be carried over to the
following month or months and shall include
interest at a rate equal to the rate earned by
the Wireless Fund until all of the approved
payments are made.” Ratified July 21,
1999. Approved August 13, 1999.
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.
14
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( b1) for the 2001- 2002 fiscal year is two
hundred thousand dollars ($ 200,000).
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.
( 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.
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.
( 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.
( 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 32.1( 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 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.
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.
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.
( b) Senate Joint Resolution 426. A
Joint Resolution Providing for the
Confirmation of the Appointment of Howard
N. Lee to the Utilities Commission. Ratified
March 24, 2005.
( c) House Bill 1163 An Act to Provide
That Provisions in Motor Carrier Freight
15
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.
Section 40.2.( b) The electric membership
corporation regulatory fee imposed under
G. S. 62- 302( b1) for the 2005- 2006 fiscal
year is two hundred thousand dollars
($ 200,000).
Section 40.2.( c) This section becomes
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( b1) for the 2006- 2007 fiscal
year is two hundred thousand dollars
($ 200,000). Effective July 1, 2006. Ratified
July 6, 2006. Approved July 10, 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( b1) for the 2007- 2008 fiscal
year is two hundred thousand dollars
($ 200,000). Ratified July 30, 2007.
Approved July 31, 2007.
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 Phaseout 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.
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
16
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( b1) 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. Effective October 1,
2009. Ratified July 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.
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
be permitted to make the election under this
section unless it commits to provide stand-alone
basic residential lines to rural
customers at rates comparable to those
rates charged to urban customers for the
same service. Ratified June 22, 2009.
House Bill 1330, Session Law 2009- 302 An
Act Prohibiting Public Utilities, Electric
Membership Corporations, Telephone
Membership Corporations, And Cities 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.
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 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 August 7, 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 7, 2009.
Section 14.26.( b) The electric membership
corporation regulatory fee imposed under
G. S. 62- 302( b1) for the 2009- 2010 fiscal
17
year is two hundred thousand dollars
($ 200,000). Ratified August 7, 2009.
Section 14.19. e1) 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 Utilities—
Commission Staff; ( 5) 54600- 5217
Utilities— Gas Pipeline Safety; ( 6) 54600-
5221 Utilities— Public Staff. Ratified
August 7, 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.
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
responsibilities. This report shall be
submitted to the Governor no later than
January 31, 2010. Ratified on July 28,
2009.
18
FIGURE NO. 1- 3
NORTH CAROLINA UTILITIES COMMISSION
RECEIPTS AND EXPENDITURES
Fiscal Year ending June 30, 2009
Source Commission Staff Public Staff Total
Fees Collected by the Commission:
Regulatory Fee 13,964,181
Interest 463,100
Fines and Penalties 716,039 0 716,039
Office of Chief Clerk:
Duplicating Services 16,424 108 16,532
Filing Fees 38,786 0 38,786
Publication Sales 495 0 495
Miscellaneous Revenues 728 0 728
Sell of Surplus Property 227 0 227
Reimbursement of Contractual Expenses 95,356 0 95,356
Federal Funds:
US Gas Safety Program 224,723 0 224,723
TOTAL RECEIPTS $ 1,092,778 $ 108 $ 15,520,167
Expenditures:
Salaries and Wages $ 4,310,809 $ 6,016,999 $ 10,327,808
Fringe Benefits 923,078 1,242,377 2,165,455
Legal & Consulting Fees 79,441 0 79,441
Contractual Services 14,589 102,584 117,173
Repairs of Building & Equipment 3,272 489 3,761
Service & Maintenance Contracts 53,526 575 54,101
Rent - Building, Offices & Equipment 310,479 259,260 569,739
Travel 130,710 36,532 167,242
Registration Fees 13,315 19,837 33,152
Telephone, Postage, Printing & Copying 79,482 59,027 138,509
Data Processing Service 4,954 3,358 8,312
Insurance 498 515 1,013
Employee Educational Expenses 4,400 2,484 6,884
Materials and Supplies 24,606 12,299 36,905
Office Furniture, Equipment 10,961 9,454 20,415
Data Processing Equipment & Software 32,726 44,439 77,165
Library Resources 31,250 17,613 48,863
Dues & Subscriptions 94,057 17,450 111,507
Other Services and Expenses 4,117 474 4,591
Indirect Cost/ Agency Administration Fees 126,176 141,485 267,661
Intragovernmental Transfer of Fines Collecte 703,319 0 703,319
TOTAL EXPENDITURES $ 6,955,765 $ 7,987,251 $ 14,943,016
FUNDED POSITIONS 64 89 153
19
􀁉 􀁉 􀀮 􀀠 􀀠 􀁓 􀁅 􀁌 􀁅 􀁃 􀁔 􀁅 􀁄 􀀠 􀁃 􀁏 􀁍 􀁍 􀁉 􀁓 􀁓 􀁉 􀁏 􀁎 􀀠 􀁁 􀁃 􀁔 􀁉 􀁖 􀁉 􀁔 􀁉 􀁅 􀁓
􀀠 􀀠 􀀠 􀀠 􀀠 􀀠 􀁔 􀁈 􀁒 􀁏 􀁕 􀁇 􀁈 􀀠 􀁄 􀁅 􀁃 􀁅 􀁍 􀁂 􀁅 􀁒 􀀠 􀀲 􀀰 􀀰 􀀹
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
2006 2007 2008 2009
Total Formal
Hearings Held 67 71 102 52
Number of
Hearings Held
Away From
Raleigh, in
Utility Service
Areas 15 27 40 18
Percent of Total
Hearings Held
Away From
Raleigh 22% 38% 40% 29%
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.
For a summary of Commission filings
and orders for 2009 see Figure No. 2- 3.
B. ELECTRIC
The History of Integrated Resource Planning
( IRP)
Integrated resource planning is an
overall planning strategy which examines
conservation, load management, and other
demand- side measures in addition to the use of
utility- owned generating plants, non- utility
generations, 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- wide 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 cost- effective for
the 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- 110.1( 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 on February 20, 1996. 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
21
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 ten 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- 110.1( c) and G. S. 62- 2( 3a).
These revised rules allowed the Public
Staff or 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 IOUs’ 1999 IRP filings that it
did not believe that it was appropriate to
mandate the 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.
The 2005 IRP proceeding saw a marked
increase in public interest regarding issues of
energy efficiency and conservation. The
Commission scheduled three public hearings in
different locations throughout the state, which
were well attended. Over 100 individuals
testified or submitted written statements for
inclusion in the record.
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 interest
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
22
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 additional
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.
Using the new format described above,
biennial reports on the 2008 IRPs ( 2008
biennial reports) were filed by Progress, Duke,
NC Power, NCEMC and the four independent
EMCs, i. e., Piedmont EMC ( Piedmont), Blue
Ridge EMC ( Blue Ridge), Rutherford EMC
( Rutherford), and Energy United EMC ( Energy
United). REPS compliance plans, which are
now required as part of the IRP process, were
filed by Progress, Duke, NC Power, GreenCo
Solutions, Inc. ( GreenCo), Halifax EMC
( Halifax), and Energy United.
Based on the fact that the 2009 update
reports had been filed, revising much of the
data contained in the 2008 biennial reports, the
Commission issued an Order on October 19,
2009, consolidating the 2008 and 2009 IRP
dockets for purposes of decision and
scheduling an evidentiary hearing for March 16,
2010 to consider the 2009 IRPs and REPS
compliance plans filed by Progress, Duke, and
NC Power. More detailed information on this
hearing can be found in the Annual Report of
the North Carolina Utilities Commission
Regarding Long Range Needs for Expansion of
Electric Generation Facilities for Service in
North Carolina dated December 15, 2009,
published on the Commission’s web page.
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 procedures.
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 the 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 end- use forecasts. While this
approach also relies on historical information, it
includes information relating to specific
electrical usage and consumption patterns in
addition to general economic relationships.
North Carolina utility forecasts of future
peak demand growth rates are about the same
as forecasts for the nation as a whole. The
2008- 2018 Reliability Assessment by the North
Carolina Electric Reliability Corporation ( NERC)
indicates that the national forecast of average
annual growth in summer peak demand for the
period is 1.7%. This number is higher than the
0.2% shown on NERC’s prior year report.
C. CONSUMER POCKETBOOK ISSUES
1. General Rate Case Decisions 2001 – 2009
A summary of the Commission
decisions in general rate cases for the years
2001 through December 31, 2009, for the
electric, gas, and telephone groups shows that
– 47.5% of the amount requested has been
granted. Broken down by industry, the amounts
granted were electric— decrease of
$ 233,000,000; gas— 38.3%; and telephone—
0.0%. See Figure No. 2- 2 for yearly totals and
the progression of amounts requested and
granted during this period.
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
23
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 even larger increases than the rate
cases themselves. Cost of gas to the gas
companies from the State’s only major supplier,
Trancontinental 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 ( CPI- 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 Deflator, and it is not revised after its
initial publication. The CPI- U increased 1.38%
from 621.1 in 2007 to 629.7 in 2008.
Figure No. 2- 1 shows the electric, gas,
and telephone utility costs compared to the
CPI- U for the years of 1987 through 1997 and
1998 to 2008.
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."
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. As of December 31,
2009, the total amount of regulatory fee
collected was $ 206,152,301.13. The fee rate
for the fiscal year 2008- 2009 was .0012% and
remained the same for the fiscal year 2009-
2010.
24
FIGURE NO. 2- 1
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
1987 7.31 $ 6.54 $ 21.94 340.4
1988 7.30 $ 6.14 $ 21.06 354.3
1989 7.41 $ 6.41 $ 21.61 371.3
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
1987- 1997
% Change 4.10% 33.18% 32.22% 41.27%
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
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
2007- 2008 0.80% 5.91% 11.43% 1.38%
% Change
25
FIGURE NO. 2- 2
ELECTRIC, GAS, AND TELEPHONE GENERAL RATE CASE DATA
AMOUNTS REQUESTED AND GRANTED ( 000' S) FOR THE CALENDAR YEARS 2001- 2009
$ Amount $ Amount $ Amount $ Amount
Electric Cases Requested Granted % Granted Gas Cases Requested Granted % Granted
2001 0 0 0.0 2001 0 0 0.0
2002 0 0 0.0 2002 28,182 13,889 49.3
2003 0 0 0.0 2003 46,899 21,008 44.8
2004 0 0 0.0 2004 0 0 0.0
2005 0 0 0.0 2005 36,900 8,522 23.1
2006 0 0 0.0 2006 20,902 5,968 28.6
2007 140,239 - 233,000 0.0 2007 0 0 0.0
2008 0 0 0.0 2008 60,958 24,805 40.7
2009 0 0 0.0 2009 0 0 0.0
Total 140,239 - 233,000 0.0 Total 193,841 74,192 38.3
$ Amount $ Amount $ Amount $ Amount
Telephone Cases Requested Granted % Granted Total Cases Requested Granted % Granted
2001 0 0 0.0 2001 0 0 0.0
2002 0 0 0.0 2002 28,182 13,889 49.3
2003 0 0 0.0 2003 46,899 21,008 44.8
2004 0 0 0.0 2004 0 0 0.0
2005 0 0 0.0 2005 36,900 8,522 23.1
2006 0 0 0.0 2006 20,902 5,968 28.6
2007 0 0 0.0 2007 140,239 - 233,000 0.0
2008 0 0 0.0 2008 60,958 24,805 40.7
2009 0 0 0.0 2009 0 0 0.0
Total 0 0 0.0 Total 334,080 - 158,808 - 47.5
($ 300)
($ 250)
($ 200)
($ 150)
($ 100)
($ 50)
$ 0
$ 50
$ 100
$ 150
$ 200
2001 2002 2003 2004 2005 2006 2007 2008 2009
Thousands
ELECTRIC
Requested Granted
$ 0
$ 5,000
$ 10,000
$ 15,000
$ 20,000
$ 25,000
$ 30,000
$ 35,000
$ 40,000
$ 45,000
$ 50,000
$ 55,000
$ 60,000
$ 65,000
2001 2002 2003 2004 2005 2006 2007 2008 2009
GAS
Requested Approved
0
2,000
4,000
2001 2002 2003 2004 2005 2006 2007 2008 2009
TELEPHONE
Requested Approved
26
FIGURE NO. 2- 3
FILINGS AND ORDERS BY INDUSTRY GROUP
Calendar Year 2009
Industry Filings Orders
Electric 1,695 430
Telephone 5,186 368
Natural Gas 486 96
Water/ Wastewater 880 243
Household Goods Movers 72 61
Payphone Service Providers 26 25
Other ( Bus/ Broker, Electric Merchant Plant,
EMC, Ferry, Small Power Producer, & Misc.) 1,691 943
Total 10,036 2,166
27
􀁉 􀁉 􀁉 􀀮 􀀠 􀁓 􀁕 􀁍 􀁍 􀁁 􀁒 􀁙 􀀠 􀁏 􀁆 􀀠 􀁔 􀁈 􀁅 􀀠 􀁃 􀁏 􀁍 􀁍 􀁉 􀁓 􀁓 􀁉 􀁏 􀁎
􀀠 􀀠 􀀠 􀀠 􀀠 􀁁 􀁃 􀁔 􀁉 􀁖 􀁉 􀁔 􀁉 􀁅 􀁓 􀀠 􀁁 􀁎 􀁄 􀀠 􀁏 􀁐 􀁅 􀁒 􀁁 􀁔 􀁉 􀁏 􀁎 􀁓 􀀠 􂀓
􀀠 􀀠 􀀠 􀀠 􀀠 􀀠 􀀠 􀀠 􀀠 􀀠 􀀠 􀀲 􀀰 􀀰 􀀹 􀀠 􀁁 􀁮 􀁤 􀀠 􀁐 􀁲 􀁩 􀁯 􀁲 􀀠 􀁙 􀁥 􀁡 􀁲 􀁳
A. OVERVIEW OF SIZE, OPERATING
RESULTS, AND NUMBER OF COMPANIES
REGULATED
At December 31, 2009, there were
2,065 companies regulated by the North
Carolina Utilities Commission. In addition, 79
municipal utility systems, while not regulated by
the Commission, were required to file annual
reports, making a grand total of 2,144 utilities
regulated or required to file annual reports as of
December 31, 2009. 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
2007 to 2008 in the major regulated electric,
gas, and telephone companies’ 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 2009 there were 52 formal
hearings. Of the 52 formal hearings, 18 were
held out of town and 27 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
10,036 filings and issued 2,166 orders in 2009.
The number of pages transcribed by the
court reporters for the years 1990 through 2009
are as follows:
No. of Pages
Transcribed By
Commission Outside
Year Reporters Reporters
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
The number of full- time court reporters
varies. The Commission currently has two
court reporters on its staff.
Commission hearings continued to
generate keen public interest in 2009. 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
29
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
15,654 complaints in 2009.
C. GENERAL IMPACT OF THE REGULATED
UTILITIES ON THE ECONOMY OF NORTH
CAROLINA IN 2008
In 2008, gross operating revenues
increased for gas utilities and decreased for the
electric and telephone utilities. Figure No. 3- 1
depicts this growth with the four Class A
electric companies showing an increase of
0.3% in 2008 compared to 2007. The gas
companies’ gross operating revenues increased
15.6%, and the telephone companies
decreased 3.4%.
Investment in gross plant allocated to
North Carolina by the electric, gas, and
telephone utility companies continued to
increase over the previous year. There was a
7.39% increase in the 2008 total gross plant
allocated to North Carolina compared to the
previous year, making a total of over $ 52 billion
as of December 31, 2008 ($ 52,454,471,000).
The increased plant investment will serve the
electric and gas customers which numbered
4,352,177 in 2008 compared to 4,284,906 in
2007. In 2007 there were 3,530,254 telephone
access lines reported compared to 3,216,625 in
2008 which will also be served by the increased
plant investment.
30
FIGURE NO. 3- 1
HIGHLIGHTS OF ACTIVITIES
ELECTRIC, GAS & TELEPHONE UTILITIES
2008 VS. 2007
( Dollars in Thousands)
ELECTRIC - MAJOR COMPANIES GAS - MAJOR COMPANIES TELEPHONE - ALL CLASSES
HIGHLIGHTS OF ACTIVITIES 2007 2008 % Change 2007 2008 % Change 2007 2008 % Change
Revenues and Expenses ( N. C. Only):
Operating Revenues $ 8,623,358 $ 8,595,750 ( 0.3) $ 1,550,562 $ 1,792,019 15.6 $ 3,107,088 $ 3,001,162 ( 3.4)
Operating Expenses 7,342,228 7,329,080 ( 0.2) 1,401,679 1,637,199 16.8 1,488,268 1,449,789 ( 2.6)
Net Operating Income Including Taxes $ 1,281,130 $ 1,266,670 ( 1.1) $ 148,883 $ 154,820 4.0 $ 1,618,820 $ 1,551,373 ( 4.2)
Other Income ( Deductions) Net ( A) 30,963 112,686 263.9 26,056 27,194 4.4 N/ A N/ A N/ COMP
Fixed Charges 380,350 444,304 16.8 69,720 68,450 ( 1.8) N/ A N/ A N/ COMP
Net Income $ 931,743 $ 935,052 0.4 $ 105,219 $ 113,564 7.9 $ 1,618,820 $ 1,551,373 ( 4.2)
Plant ( N. C. Only):
Gross Plant ( B) $ 32,070,130 $ 35,162,319 9.6 $ 3,463,151 $ 3,688,199 6.5 $ 13,379,231 $ 13,657,991 2.1
Accumulated Depreciation 14,616,408 15,858,949 8.5 1,052,813 1,142,917 8.6 9,535,017 10,041,617 5.3
Net Plant $ 17,453,722 $ 19,303,370 10.6 $ 2,410,338 $ 2,545,282 5.6 $ 3,844,214 $ 3,616,374 ( 5.9)
Capital Structure:
Stockholders' Equity $ 5,740,543 $ 18,233,554 217.6 $ 1,118,324 $ 1,161,853 3.9 N/ A N/ A N/ COMP
Long- Term Debt 14,454,239 16,888,299 16.8 846,277 1,240,415 46.6 N/ A N/ A N/ COMP
Total Capitalization $ 20,194,782 $ 35,121,853 73.9 $ 1,964,601 $ 2,402,268 22.3 N/ A N/ A N/ COMP
Long- Term Debt % of Total Capitalization 71.6 48.1 ( 32.8) 43.1 51.6 19.9 N/ A N/ A N/ COMP
Other Statistics ( N. C. Only):
Total Customers Yearly Average 3,171,093 3,220,391 1.6 1,113,813 1,131,786 1.6
Average Number of kWhs Per Residential Customer 13,996 13,584 ( 2.9)
Average Number of Dekatherms Per Residential Cust. 56 61 8.9
Average Revenue Per Residential Customer:
Electric Residential Customer ( Cents Per kWh) 8.13 8.79 8.1
Gas Residential Customer ($ Per Dekatherm) $ 15.07 $ 15.96 5.9
Total Access Lines in Service 3,530,254 3,216,625 ( 8.9)
( A) Includes all Allowance for Funds Used During Construction ( AFUDC) and all Extraordinary and Delayed Items.
( B) Includes Plant in Service, Under Construction, Held for Future Use, and Leased to Others.
N/ A - Not Available
31
FIGURE NO. 3- 2
MAJOR UTILITIES REGULATED AND REPORTING TO THE
NORTH CAROLINA UTILITIES COMMISSION
AS OF DECEMBER 31, 2009
UTILITY QTY
BUS / BROKER 21
ELECTRIC 5
ELECTRIC COOPERATIVES 32
FERRIES 15
NATURAL GAS:
LOCAL DISTRIBUTION COMPANIES 4
INTRASTATE PIPELINE 1
HOUSING AUTHORITIES 8
MOTOR CARRIERS OF HOUSEHOLD GOODS 265
SMALL POWER PRODUCERS 163
TELEPHONE:
COMPETING LOCAL PROVIDERS 191
INCUMBENT LOCAL PROVIDERS 16
LONG DISTANCE CARRIERS 374
PAYPHONE SERVICE PROVIDERS 129
SHARED TENANT SERVICES 20
WATER / WASTEWATER 815
MISCELLANEOUS 6
TOTAL 2,065
32
Figure No. 3- 3
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
9,000,000
10,000,000
11,000,000
12,000,000
13,000,000
14,000,000
15,000,000
16,000,000
17,000,000
18,000,000
19,000,000
20,000,000
21,000,000
22,000,000
23,000,000
24,000,000
25,000,000
26,000,000
27,000,000
28,000,000
29,000,000
30,000,000
31,000,000
32,000,000
33,000,000
34,000,000
35,000,000
36,000,000
37,000,000
Electric Gas Telephone
Gross Plant Allocated to Serve North Carolina Customers
Electric-- Gas-- Telephone ( 2003- 2008)
2003 2004 2005 2006 2007 2008
33
􀁉 􀁖 􀀮 􀀠 􀀠 􀁔 􀁈 􀁅 􀀠 􀁅 􀁌 􀁅 􀁃 􀁔 􀁒 􀁉 􀁃 􀀠 􀁐 􀁏 􀁗 􀁅 􀁒 􀀠 􀁉 􀁎 􀁄 􀁕 􀁓 􀁔 􀁒 􀁙
North Carolina Electric IOU Service Area Map
35
Alleghany
Ashe
Brunswick
Buncombe
Burke
Cherokee
Duplin
Durham
Franklin
Graham Henderson Harnett
Hoke
Iredell
Jackson
Johnston
Jones
Lee
Lenoir
Lincoln
Mcdowell
Macon
Madison
Montgomery
Moore
New
Hanover
Onslow
Orange
Pender
Person
Polk
Richmond
Robeson
Rutherford
Sampson
Vance
Warren
Wayne
Wilkes
Scotland
Swain
Haywood
Yancey
Avery
Caldwell
Watauga
Cleveland
Catawba
Alexander
Bladen
Cumberland
Chatham
Alamance
Caswell
Wake
Columbus
Clay
Mitchell
Transylvania
Granville
Bertie
Dare
Edgecombe
Greene
Hertford
Hyde
Martin
Nash
Northampton
Pamlico
Pitt
Washington Tyrrell
Wilson
Carteret
Craven
Beaufort
Halifax
Gates
Currituck
Camden
Pasquotank
Perquimans
Chowan
Anson
Cabarrus
Forsyth
Gaston
Guilford
Mecklenburg
Randolph
Surry Stokes Rockingham
Union
Yadkin
Rowan
Davie
Davidson
Stanly
25
22
20
10
8
2
6
15
21
18
16
14
26
23
19
17
13
11
7
5
4
1
24
9
3
12
TEMA Board District Map
District I
2 Blue Ridge EMC
8 EnergyUnited
10 French Broad EMC
12 Haywood EMC
20 Rutherford EMC
22 Surry- Yadkin EMC
25 Union Power
District II
6 Central EMC
11 Halifax EMC
14 Lumbee River EMC
15 Pee Dee EMC
16 Piedmont EMC
18 Randolph EMC
21 South River EMC
24 Tri- County EMC
26 Wake EMC
— Southside EC ( Crewe, Va.)
District III
1 Albemarle EMC
3 Brunswick EMC
4 Cape Hatteras EC
5 Carteret- Craven EC
7 Edgecombe- Martin County EMC
9 Four County EMC
13 Jones- Onslow EMC
17 Pitt & Greene EMC
19 Roanoke EC
23 Tideland EMC
36
Black
Creek
77
85
85
85 95
95
40
26
40
40
North Carolina Membership
LAST UPDATE 4/ 12/ 04 • LIH
Out- of- state Associate Members
VIRGINIA Bedford • Danville • Martinsville • Richlands
SOUTH CAROLINA Abbeville • Bamberg • Bennettsville
Camden • Clinton • Easley • Gaffney • Greer • Laurens
Newberry • Rock Hill • Union • Westminster
Huntersville
Cornelius Landis
Statesville
Cherryville
Lincolnton
Maiden
Newton
Granite Falls
Morganton
Drexel
Bostic Shelby
Gastonia
Pineville
Albemarle
Lexington
High Point
Monroe
NCMPA1 Participants
Fayetteville
Concord
Kings Mountain
Dallas
Boone- New River
Forest City
Waynesville
Cullowhee
Western Carolina
Murphy
UNC- CH
UNC- Greensboro
Enfield
Winterville
Fountain
Macclesfield
Sharpsburg Pinetops
Lucama
Stantonsburg
Walstonburg
ECU
Elizabeth City State Univ.
Non- Power Agency Members
Elizabeth City
Hertford
Edenton
Belhaven
Robersonville
Washington
Windsor
New Bern
Hamilton
Ayden
La Grange
Kinston
Hookerton
Fremont
Pikeville
Clayton
Louisburg
Wake Forest
Scotland Neck
Hobgood
Greenville
Tarboro
Rocky Mount
Benson
Smithfield
Selma
Apex Farmville
Wilson
Southport
Lumberton
Red Springs
Laurinburg
NCEMPA Participants
Wilmington
Raleigh
Charlotte
Asheville
Major North Carolina Cities
37
FIGURE NO. 4- 3
MAJOR ELECTRIC COMPANIES
At December 31, 2009
( Fully Regulated)
CAROLINA POWER & LIGHT COMPANY
DBA
PROGRESS ENERGY CAROLINAS
411 Fayetteville Street
RALEIGH, NORTH CAROLINA 27601- 1748
( 919) 546- 6111
Organized: April 6, 1926
States Served: North Carolina and
South Carolina
DUKE ENERGY CORPORATION DBA
DUKE ENERGY CAROLINAS, LLC
422 South Church Street
CHARLOTTE, NORTH CAROLINA 28201
( 704) 594- 0887
Organized: May 1917
States Served: North Carolina and
South Carolina
NANTAHALA POWER AND LIGHT
COMPANY
WHOLLY OWNED SUBSIDIARY OF
DUKE POWER COMPANY**
301 NP& L Loop
FRANKLIN, NORTH CAROLINA 28734
( 828) 369- 4544
Organized: July 23, 1929
Acquired by Duke Power Company:
November 17, 1988
State Served: North Carolina
** Merged into Duke Power August 3, 1998
VIRGINIA ELECTRIC AND POWER
COMPANY DBA
DOMINION NORTH CAROLINA POWER
One James River Plaza
RICHMOND, VIRGINIA 23219
( 804) 775- 5813
Organized: June 29, 1909
States Served: North Carolina and Virginia
SMALL ELECTRIC COMPANIES
At December 31, 2009
COMPANY COUNTY SERVED***
New River Power & Light Watauga County
Western Carolina University Jackson County
*** Entire County is not served by the
companies listed.
MUNICIPAL ELECTRIC SYSTEMS
AND SOURCE OF POWER*
( Not Regulated)
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 NC Power
Farmville NCEMPA
Fayetteville CP& L
Forest City Duke Energy
Fountain Town of Farmville
Fremont NCEMPA
Gastonia NCMPA No. 1
Granite Falls NCMPA No. 1
Greenville NCEMPA
Hamilton NCEMPA
Hertford NCEMPA
High Point NCMPA No. 1
Highlands Duke Energy
Hobgood NCEMPA
Hookerton NCEMPA
Huntersville NCMPA No. 1
Kings Mountain Duke Energy
Kinston NCEMPA
38
FIGURE NO. 4- 3 CONTINUED
MUNICIPALITY SOURCE OF POWER*
LaGrange NCEMPA
Landis NCMPA No. 1
Laurinburg NCEMPA
Lexington NCMPA No. 1
Lincolnton NCMPA No. 1
Louisburg NCEMPA
Lucama City of Wilson
Lumberton NCEMPA
MacClesfield City of Wilson
Maiden NCMPA No. 1
Monroe NCMPA No. 1
Morganton NCMPA No. 1
Murphy TVA
New Bern NCEMPA
Newton NCMPA No. 1
Oak City Edgecombe- Martin EMC
Pikeville NCEMPA
Pinetops City of Wilson
Pineville NCMPA No. 1
Red Springs NCEMPA
Robersonville NCEMPA
Rocky Mount NCEMPA
Scotland Neck NCEMPA
Selma NCEMPA
Sharpsburg City of Rocky Mount
Shelby NCMPA No. 1
Smithfield NCEMPA
Southport NCEMPA
Stantonsburg City of Wilson
Statesville NCMPA No. 1
Tarboro NCEMPA
Wake Forest NCEMPA
Walstonburg City of Wilson
Washington NCEMPA
Waynesville CP& L
Wilson NCEMPA
Windsor NC Power
Winterville Greenville Utilities
Total: 71
* NCMPA No. 1 = North Carolina Municipal
Power Agency Number 1
NCEMPA = North Carolina Eastern Municipal
Power Agency
39
FIGURE NO. 4- 4
N. C. ELECTRIC MEMBERSHIP CORPORATION
AND SOURCE OF POWER
December 31, 2009
( Regulated as to Quality of Service Only)
ELECTRIC MEMBERSHIP CORPORATION HEADQUARTERS SOURCE OF POWER*
Albemarle Hertford NCEMC, SEPA
Blue Ridge Lenoir NCEMC, SEPA, IM
Brunswick Shallotte NCEMC, SEPA
Cape Hatteras Buxton NCEMC
Carteret- Craven Morehead City NCEMC, SEPA
Central Sanford NCEMC, SEPA
Edgecombe- Martin County Tarboro NCEMC, SEPA
EnergyUnited Statesville NCEMC, SEPA, IM
Four County Burgaw NCEMC, SEPA
French Broad Marshall CP& L, SEPA
Halifax Enfield NCEMC, SEPA
Haywood Waynesville NCEMC, SEPA, IM
Jones- Onslow Jacksonville NCEMC, SEPA
Lumbee River Red Springs NCEMC, SEPA
Pee Dee Wadesboro NCEMC, SEPA
Piedmont Hillsborough NCEMC, SEPA, IM
Pitt & Greene Farmville NCEMC, SEPA
Randolph Asheboro NCEMC, SEPA
Roanoke Rich Square NCEMC, SEPA
Rutherford Forest City NCEMC, SEPA, IM
South River Dunn NCEMC, SEPA
Surry- Yadkin Dobson NCEMC
Tideland Pantego NCEMC, SEPA
Tri- County Dudley NCEMC, SEPA
Union Monroe NCEMC, SEPA
Wake Wake Forest NCEMC, SEPA
* NCEMC - North Carolina Electric Membership Corporation
SEPA - Southeastern Power Administration
IM – Independent Members of NCEMC**
** These EMCs independently purchase capacity and energy requirements, as needed, above
those provided by NCEMC and SEPA.
40
FIGURE NO. 4- 4 CONTINUED
FOREIGN ELECTRIC MEMBERSHIP CORPORATIONS OPERATING IN N. C.
December 31, 2009
ELECTRIC MEMBERSHIP CORPORATION HEADQUARTERS SOURCE OF POWER
Blue Ridge Mountain Young Harris, GA. TVA
Serves Cherokee and Clay Counties
Broad River Electric Cooperative, Inc. Gaffney, S. C. Saluda Electric
Serves Cleveland County Corporation
Mecklenburg Electric Cooperative, Inc. Chase City, VA. SEPA, Old
Serves Granville and Warren Counties Dominion
Tri- State McCaysville, GA TVA
Serves Cherokee County
Mountain Electric Cooperative, Inc. Mountain City, TN TVA
Serves Avery, Burke, and Watauga Counties
41
A. GENERAL COMMENTS
There are three regulated investor-owned
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 Carolina Power & Light Company,
doing business as Progress Energy Carolinas,
Inc. ( 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).
Carolina Power & Light Company dba
Progress Energy Carolinas ( Progress), an
investor- owned utility, operates nineteen coal-fired
units at eight plants, four nuclear units at
three plants, forty- one combustion turbine
generators at eleven plants, fifteen
hydroelectric units at four plants, and nine
combined cycle units at two locations. In 2008
Progress provided electricity to 1,274,612 North
Carolina customers. The service area of
Progress encompasses an area of 30,000
square miles with a population of more than
3.75 million including the Coastal Plains Section
of North Carolina, a section in western North
Carolina, and one- fourth of eastern South
Carolina. The North and South Carolina
Commissions govern retail electric rates and
the Federal Energy Regulatory Commission
governs wholesale electric rates. Progress
Energy Carolinas is headquartered in Raleigh,
North Carolina.
Duke and Progress, the two largest
electric IOUs in North Carolina, together supply
about 96% of the utility- generated electricity
consumed in the state. Approximately 17% of
the IOUs’ total electric sales in North Carolina
were to the wholesale market, consisting
primarily of electric membership corporations
and municipally- owned electric systems.
Duke Energy Carolinas, LLC ( Duke) is
one of the nation’s largest investor- owned
electric utilities in terms of kilowatt- hour sales.
Duke Power Company merged with PanEnergy
Corporation, headquartered in Houston, Texas,
effective April 22, 1997, to become Duke
Energy Corporation. In 2006, Duke merged
with Cinergy and the entity serving North and
South Carolina was renamed Duke Energy
Carolinas, LLC. In 2008 Duke’s service area
covered approximately 20,000 square miles
with an estimated population of about 4.8
million. Duke provided electricity to 1,827,491
North Carolina customers in 2008 and served
approximately two million customers
systemwide. Duke owns three nuclear
generating plants ( 7 units), eight coal- fired
plants ( 30 units), and two pumped storage
hydroelectric plants ( 8 units) and combustion
turbine generation at eight plants ( 51 units) and
multiple conventional hydro facilities. The
headquarters for Duke is in Charlotte, North
Carolina.
Virginia Electric and Power Company
( Vepco) is the principal subsidiary of Dominion
Resources, Inc., a publicly traded holding
company formed in 1983. Vepco provides
service to northeastern North Carolina, where it
serves 20 counties as Dominion North Carolina
Power. Vepco's service territory includes the
urban corridor stretching from the suburbs of
Washington, D. C., through Richmond to the
Hampton Roads and Norfolk area of Virginia to
North Carolina. NC Power provided electricity
to 118,288 North Carolina customers in 2008.
Vepco provides electricity to more than 2.3
million customers systemwide within a 30,000
square mile area. Vepco generates electricity
with two nuclear plants ( 4 units), eleven coal-fired
plants ( 23 units), two oil- fired plants ( 2
units), combustion turbines at ten plants ( 45
units); combustion turbines at eleven plants ( 50
units); combined cycle at five plants ( 7 units),
three conventional hydroelectric plants ( 13
units), one pumped storage hydroelectric plant
( 6 units), and one wood burning plant.
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. Commission
Rule R8- 60( b) specifies that the Integrated
Resource Planning ( IRP) process is applicable
42
to the North Carolina Electric Membership
Corporation ( NCEMC), and any individual
electric membership corporation ( EMC) to the
extent that it is responsible for procurement of
any or all of its individual power supply
resources.
EMCs are independent, non- profit
corporations. There are 31 EMCs serving
995,000 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 96 of the
state’s 100 counties. Twenty- five of the EMCs
are members of 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, which has agreed to provide appropriate
information to NCEMC for inclusion in
NCEMC’s IRP filings.
The two remaining 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 is an all-requirements
customer of Blue Ridge Electric
Membership Corporation, and Western Carolina
University is an all- requirements customer of
Duke.
B. RENEWAL 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 must assure
that 0.02% of their retail electric sales in North
Carolina come from solar energy resources.
Additional requirements are effective in 2012
and subsequent years.
Since October 1, 2008, the Commission
has received more than 140 certificate of public
convenience and necessity applications or
reports of proposed construction. As of
September 30, 2009, the Commission has
accepted registration statements filed by 72
facilities, totaling more than 220 MW of
renewable electric generating capacity in North
Carolina.
October 1, 2009, the Commission
submitted its second annual report to the
Governor, the Environmental Review
Commission, and the Joint Legislative Utility
Review Committee regarding Commission
implementation of, and electric power supplier
compliance with, the REPS. In addition, on
October 1, 2009, the Commission filed its first
report to the same entities regarding cost
allocations as required by Senate Bill 3. That
report discusses allocations of utility costs for
renewable energy, demand- side
management/ energy efficiency, and fuel and
fuel related charges. Both reports are available
on the Commission’s web site, www. ncuc. net.
Senate Bill 3 required 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 a request for proposals via
which it seeks a vendor that would design,
build, and operate the tracking system.
Proposals were due to the Commission on
December 15, 2009. The Commission’s project
schedule would have NC- RETS operational by
July 1, 2010, consistent with requirements of
Session Law 2009- 475.
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Energy Efficiency
Electric power suppliers in North
Carolina are required to implement DSM and
EE measures and use supply- side resources to
establish the least cost mix of demand
reduction 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.
Both Duke and Progress have filed for the
approval of a number of energy efficiency
measures and cost recovery. EnergyUnited in
2009 also filed for and received approval of two
energy efficiency programs.
On September 1, 2009, the Commission
filed its first biennial report to the Governor and
the Joint Legislative Utility Review Committee
regarding proceedings for electric utilities
involving EE and DSM cost recovery and
incentives. That report provides a
comprehensive review of the Commission’s
activities regarding EE and DSM and is
available on the Commission’s web site.
NC GreenPower
NC GreenPower is an independent,
nonprofit organization and the first, statewide
multi- utility renewable energy program in the
nation. Established in 2003, this landmark
program launched an opportunity for North
Carolinians to voluntarily support the growth of
green power in North Carolina. As of 2008, NC
GreenPower also offered Carbon Offsets to
address growing concerns about the impact of
greenhouse gases on the environment.
NC GreenPower is a statewide program
designed to improve the quality of the
environment by encouraging the development
of renewable energy resources through
consumers’ voluntary funding of green power
purchases by electric utilities in North Carolina
and the mitigation of greenhouse gas emissions
through consumers’ voluntary funding of
Carbon Offsets. The program revenues help
provide financial incentives for generators of
electricity from renewable sources and for
developers of projects mitigating greenhouse
gas emissions.
Renewable Energy product: A typical
contribution of just $ 4 per month adds one
block of 100 kilowatt- hours of green energy to
North Carolina’s power supply. NC
GreenPower pays a premium to a generator for
renewable power supplied to the electric grid in
North Carolina, rather than from traditional
sources. Large- volume users may contribute
towards 100 or more blocks per month at a rate
of $ 2.50 per block with a different energy mix.
Carbon Offset product: A $ 4 monthly
contribution will mitigate 500 pounds of carbon
dioxide or carbon dioxide equivalent
( greenhouse gas emissions). NC GreenPower
pays a premium to a project owner or the
market for the mitigation of 500 pounds of
carbon dioxide or carbon dioxide equivalent.
Brokered Bid product: The Brokered
Bids option provides customers interested in
annually spending $ 15,000 or more on
Renewable Energy Credits or Carbon Offsets
with a more competitive North Carolina option.
NC GreenPower accepts bids for Renewable
Energy Credits on a continual basis. When
available, NC GreenPower offers them to
customers meeting the minimum spending
requirement.
NC GreenPower accepts renewable
energy bids on a continual basis. Generators
complete an application with pertinent project
information, a bid amount, and a date through
which the bid is available. These bids create a
portfolio of available renewable energy projects.
NC GreenPower recently finished a Carbon
Offset bid process and is currently negotiating
with a project owner to fulfill the Carbon Offset
demand. There is also an open, rolling bid
process for Carbon Offset producers.
As of November 2009, NC GreenPower
has contracts with the following green power
generators: 230 solar photovoltaic ( PV), two
small hydroelectric, seven wind, two landfill
methane, and one wood waste. As of
September 30, 2009, 12,775 North Carolina
electric consumers were subscribed to 24,888
100- kWh blocks of power per month –
representing 29,865,432 kWh of renewable
energy to be delivered to the electric grid in
North Carolina this year, which is enough to
power about 2,500 homes.
More than 45 utilities across North
Carolina assist NC GreenPower by providing
billing and collection of donations through
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consumers’ utility bills. Duke, Progress, and
NC Power also facilitate carbon offset
donations via direct billing.
STATE TRANSMISSION AND
INTERCONNECTION ISSUES
On April 2, 2004, the Commission
hosted the first of several transmission
stakeholder meetings to facilitate a
collaborative effort to identify any problems that
North Carolina consumers of transmission
service face and to allow North Carolina
stakeholders to implement potential solutions to
those specific problems without the risk of
federal intervention. These meetings led to the
establishment of the North Carolina
Transmission Planning Collaborative ( NCTPC),
which issued its first report in January of 2007.
In that report, Participants ( transmission- owning
utilities, such as Duke and Progress, and
transmission- dependent utilities, such as
municipal electric systems and EMCs) identified
transmission projects necessary for reliability
and the estimated costs for the upgrades that
would be required to support various options for
economic transfers of power and to assure
reliable grid operations. The Participants
believe this collaborative effort has provided
valuable information about projected loads and
resources used in transmission planning. The
Participants further believe that the joint
planning effort has produced benefits that
would not otherwise have been realized,
including: ( 1) insight into the neighboring
system’s modeling approaches, including
resource assumptions, contingencies evaluated
and system dispatch assumptions; ( 2) higher
confidence in and understanding of data
provided by all participants, including more
detailed and timely sharing of information; ( 3)
improved understanding of the neighboring
transmission system, including its strengths and
weaknesses and the relationship between the
two transmission systems; ( 4) shared technical
and planning expertise that resulted in
improved modeling, more comprehensive
evaluation of the impact of generation and
transmission contingencies, and consideration
of more extensive sets of solutions; and ( 5) a
more comprehensive approach to developing
solutions to address not only reliability, but also
to increase access to alternative resource
supply options for load- serving entities, such as
municipal utilities.
The NCTPC’s most recent official report,
dated January 2009, states that 16 major
transmission projects are needed in North
Carolina by the end of 2018 at an estimated
cost of $ 520 million. However, in August 2009,
Duke and Progress submitted revised load
growth forecasts to the planning collaborative.
Due to the economic downturn, several of the
16 transmission projects are being pushed back
in time, but all will still be needed by June 2019.
Pursuant to G. S. 62- 101, a certificate of
environmental compatibility and public
convenience and necessity from the Utilities
Commission is needed before building a
transmission line of more than 161 kilovolts. No
such requests are currently pending before the
Commission.
In addition to their work within the
NCTPC, Duke and Progress are part of an
inter- regional transmission planning initiative
called the Southeast Interregional Participation
Process. This effort allows a transmission
customer, such as a municipal utility, to request
a study of the transmission that would be
required to be built to facilitate a hypothetical
request to transport electric power across
multiple regional planning areas. Other
participating utilities include Alabama Electric
Cooperative, Santee Cooper, Dalton Utilities,
SCE& G, South Mississippi Electric Power
Association, Entergy, Georgia Transmission
Corporation, the Southern Companies,
Municipal Electric Authority of Georgia, TVA,
and E. ON U. S.
Finally 2009 saw increased focus on
electric transmission planning on an even larger
scale, at the “ interconnection wide” level. The
United States has three electric
interconnections. North Carolina is part of the
eastern interconnection, which is the region
east of the Rocky Mountains, minus Texas.
Largely due to increased interest in renewable
energy development, the federal government
launched an effort to develop coordinated, long-term
transmission expansion plans on an
interconnection- wide basis. This effort received
funding in 2009 via the American Recovery and
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Reinvestment Act of 2009 ( ARRA 2009).
Pursuant to ARRA 2009, the U. S. Department
of Energy ( DOE) offered grants for transmission
planning, including funds for “ Cooperation
Among States on Electric Resource Planning
and Priorities.” DOE sought proposals from
organizations that would facilitate dialogue and
collaboration among the states to enable them
to develop consistent and coordinated input and
guidance for transmission planning. The
National Association of Regulatory Utility
Commissioners ( NARUC), of which the North
Carolina Utilities Commission is a member,
worked with all of the states in the eastern
interconnection to develop and submit a DOE
funding request. Under the NARUC proposal, a
new entity would be established, the Eastern
Interconnection States Planning Council. Each
of the 39 states in the eastern interconnection,
as well as Washington, D. C. and the City of
New Orleans, would be represented in this
“ unprecedented collaborative.” North Carolina
would be represented by the Chairman of the
Utilities Commission and the Deputy
Commissioner of Energy ( Department of
Commerce). NARUC’s grant request is
currently pending, but is expected to be
awarded by the end of 2009. Funds would be
used for a small staff and meetings and
research that would assist the states in
reaching consensus regarding future sources of
electric energy, and by extension, the new
electric transmission infrastructure needed to
move that energy to consumers.
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.”
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 10 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.
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. In its previous Orders, the
Commission has required utilities to offer net
metering to a customer that owns and operates
a solar photovoltaic ( PV), wind- powered, mirco-hydro,
or biomass- fueled electric generating
facility with a capacity of up to 20 kW for a
residential customer- generator and 100 kW for
a non- residential customer- generator. The
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Commission’s Orders specified that net
metering customers must be on a time- of- use
( TOU) demand rate schedule and that the
kilowatt- hour credit, if any, shall be reset to zero
at the beginning of each summer billing season.
Any RECs associated with this excess
generation shall also be granted to the utility
when the excess generation credit balance is
zeroed out.
On June 9, 2008, the Commission
issued an Order establishing a procedural
schedule to reconsider all aspects of its existing
net metering policy, including whether solar PV,
wind- powered, micro- hydro, or biomass- fueled
electric generating facilities up to one megawatt
or some smaller size should be allowed to net
meter; whether to allow additional types of
generating facilities to net meter; and whether
to otherwise change the terms and conditions
under which generating facilities currently are
allowed to net meter.
After receiving testimony from public
witnesses in Raleigh and Charlotte and from
expert witnesses for the parties, the
Commission issued an Order on March 31,
2009, amending its net metering policy. In its
Order, the Commission concluded that Duke,
NC Power, and Progress should file revised
riders or 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 non-residential
customer up to 100 kW. Credit for
excess electricity generated during a monthly
bill 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
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 off- peak consumption. If the
customer chooses to take retail electric service
pursuant to a TOU- demand 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.
FEDERAL ENERGY INITIATIVES
Vertically integrated electric utilities,
such as Duke and Progress produce their own
power at central generation facilities, transmit
that power over long distances at high voltage
from the generation facilities to load centers,
and finally distribute the power over lower
voltage lines for use by retail customers. Such
customers are referred to as “ bundled,” since all
aspects of their delivered electrical service are
provided by a single energy supplier. Over the
past two decades, however, the federal
government has pursued a policy of
introducing, and subsequently encouraging,
competition in wholesale power markets. This
has led to attempts at the federal level to
remove an perceived barriers to competition,
including measures affecting the operation of
the high- voltage transmission system by
vertically integrated utilities who allegedly have
an incentive to stifle competition by
discriminating in favor of their own generation
resources.
Open Access Transmission Tariff
In April 1996, the FERC issued Order
Nos. 888 and 889, which established rules
governing open access to electric transmission
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systems by wholesale customers and required
the construction and use of an Open Access
Same- time Information System ( OASIS). In
Order No. 888, the FERC 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
FERC 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. The FERC rule
also permitted recovery of legitimate, prudent,
and verifiable stranded costs associated with
certain existing wholesale service contracts. In
New York v. FERC, 535 U. S. 1 ( 2002), the
Supreme Court of the United States upheld the
FERC’s decisions in Order No. 888. In Order
No. 889, the FERC 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