Duke Energy's Position on Renewable Portfolio Standards

As America’s electricity appetite continues to grow, it is critical that both government and the market come together to support policies that encourage the development of clean energy alternatives. In the carbon-constrained world Duke Energy sees coming, these low- or zero-emission technologies will play an increasingly larger role in meeting the nation’s future energy demand. As carbon prices are embedded into the cost of fossil fuels and renewable technologies become more price competitive, we are optimistic that renewable sources of energy will assume an increasing percentage of the energy supply portfolio.

Renewable portfolio standards, now in place in close to half the states and the District of Columbia, have served to jump start deployment of these technologies ahead of greenhouse gas legislation. Renewable mandates, as long as they are practical, affordable and premised on the goal of adding emissions-free energy, can be effective in preparing the market for carbon caps.

Renewable portfolio standards are better set by state legislatures, which understand their jurisdiction’s unique characteristics and siting capabilities. We are concerned that a federal one-size-fits-all approach might well fail to recognize what works in California or Texas might not work at all in Ohio or North Carolina.

Duke Energy strongly recommends policymakers use the following principles when proposing mandates on renewable power.

  • Begin with sensible renewable requirement levels initially and ramp up over time
    • Moderate the amount of renewables over time to avoid price spikes
    • Require all electric providers to participate including municipals, REMCs and third party suppliers
  • Protect and inform customers
    • Cap costs of renewable programs to ensure any increases on customer bills are reasonable
    • Conduct periodic reviews of the renewable program to determine impact on the customer
  • Allow compliance flexibility
    • Allow electric providers to use a suite of technologies to meet the renewable requirement
    • Allow the purchase of national renewable energy certificates to meet the requirement
  • Promote the use of conservation and energy efficiency
    • Place energy efficiency on “equal footing” with new generation - megawatts saved are as effective as any zero-emissions technology
  • Ensure appropriate and timely recovery of compliance costs
    • Allow electric providers timely recovery of all costs plus a return on renewable supply acquisitions