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Question 1 of 30
1. Question
Consider a North Carolina electric utility seeking approval from the North Carolina Utilities Commission for a substantial investment in a new natural gas-fired power plant to meet projected increases in demand. During the Certificate of Public Convenience and Necessity (CPCN) application process, what is the primary legal and regulatory standard the NCUC will apply to evaluate the utility’s proposal, ensuring it aligns with the state’s energy policy and protects consumer interests?
Correct
The North Carolina Utilities Commission (NCUC) has a statutory mandate to ensure that public utilities provide safe, adequate, and reliable service at just and reasonable rates. This includes oversight of utility investments, operational efficiency, and environmental compliance. When a utility proposes a significant capital expenditure, such as the construction of a new power generation facility or major transmission upgrades, it must seek approval from the NCUC through a Certificate of Public Convenience and Necessity (CPCN). The CPCN process involves a thorough review of the proposed project’s necessity, its economic feasibility, its impact on the environment and public health, and its alignment with the state’s energy policies, including those related to renewable energy and energy efficiency. The Commission considers testimony from the utility, intervenors (such as consumer advocacy groups, environmental organizations, and other affected parties), and its own staff. Evidence presented can include engineering studies, financial analyses, environmental impact assessments, and load forecasts. The Commission’s decision is based on whether the project serves the public interest, considering all relevant factors and statutory requirements. The principle of “least cost, least risk” is often applied in evaluating such proposals, meaning the utility must demonstrate that the chosen project represents the most cost-effective and least risky option to meet future energy needs compared to available alternatives. This process ensures that ratepayers do not bear the burden of imprudent or unnecessary utility investments.
Incorrect
The North Carolina Utilities Commission (NCUC) has a statutory mandate to ensure that public utilities provide safe, adequate, and reliable service at just and reasonable rates. This includes oversight of utility investments, operational efficiency, and environmental compliance. When a utility proposes a significant capital expenditure, such as the construction of a new power generation facility or major transmission upgrades, it must seek approval from the NCUC through a Certificate of Public Convenience and Necessity (CPCN). The CPCN process involves a thorough review of the proposed project’s necessity, its economic feasibility, its impact on the environment and public health, and its alignment with the state’s energy policies, including those related to renewable energy and energy efficiency. The Commission considers testimony from the utility, intervenors (such as consumer advocacy groups, environmental organizations, and other affected parties), and its own staff. Evidence presented can include engineering studies, financial analyses, environmental impact assessments, and load forecasts. The Commission’s decision is based on whether the project serves the public interest, considering all relevant factors and statutory requirements. The principle of “least cost, least risk” is often applied in evaluating such proposals, meaning the utility must demonstrate that the chosen project represents the most cost-effective and least risky option to meet future energy needs compared to available alternatives. This process ensures that ratepayers do not bear the burden of imprudent or unnecessary utility investments.
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Question 2 of 30
2. Question
Consider a scenario where a major electric utility operating in North Carolina proposes to retire a significant portion of its coal-fired generation capacity, citing economic and environmental factors. Which state agency is primarily tasked with reviewing this proposal, ensuring it aligns with North Carolina’s energy policy, and protecting the interests of North Carolina consumers throughout this regulatory process?
Correct
The North Carolina Utilities Commission (NCUC) is responsible for regulating public utilities in North Carolina, including electric power generation and distribution. The Public Staff of the NCUC plays a crucial role in representing the interests of North Carolina consumers. When a utility proposes a significant change, such as the retirement of a large coal-fired power plant, the NCUC, guided by the Public Staff’s analysis, must evaluate the proposal’s impact on the state’s energy landscape, including reliability, affordability, and environmental considerations. The commission’s approval process often involves detailed dockets where various stakeholders, including the utility, the Public Staff, environmental groups, and consumer advocates, present evidence and arguments. The NCUC’s decisions are informed by North Carolina General Statutes, such as those pertaining to public utilities and rate-making, as well as federal regulations. The concept of “least cost integrated resource planning” is central to these decisions, requiring utilities to consider all available resources and strategies to meet future energy needs in the most economical and reliable manner. The Public Staff’s independent analysis provides a critical counterpoint to the utility’s proposals, ensuring that consumer interests are adequately considered throughout the regulatory process. The commission’s ultimate decision must balance the utility’s financial health, the need for reliable and affordable energy for North Carolina residents and businesses, and the state’s evolving environmental goals.
Incorrect
The North Carolina Utilities Commission (NCUC) is responsible for regulating public utilities in North Carolina, including electric power generation and distribution. The Public Staff of the NCUC plays a crucial role in representing the interests of North Carolina consumers. When a utility proposes a significant change, such as the retirement of a large coal-fired power plant, the NCUC, guided by the Public Staff’s analysis, must evaluate the proposal’s impact on the state’s energy landscape, including reliability, affordability, and environmental considerations. The commission’s approval process often involves detailed dockets where various stakeholders, including the utility, the Public Staff, environmental groups, and consumer advocates, present evidence and arguments. The NCUC’s decisions are informed by North Carolina General Statutes, such as those pertaining to public utilities and rate-making, as well as federal regulations. The concept of “least cost integrated resource planning” is central to these decisions, requiring utilities to consider all available resources and strategies to meet future energy needs in the most economical and reliable manner. The Public Staff’s independent analysis provides a critical counterpoint to the utility’s proposals, ensuring that consumer interests are adequately considered throughout the regulatory process. The commission’s ultimate decision must balance the utility’s financial health, the need for reliable and affordable energy for North Carolina residents and businesses, and the state’s evolving environmental goals.
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Question 3 of 30
3. Question
Consider a dispute arising in North Carolina between a small commercial solar developer and a regulated electric utility concerning the terms and conditions for interconnecting a 500 kW photovoltaic system to the utility’s distribution grid. The developer alleges that the utility’s proposed interconnection charges are excessively high and not in line with established industry practices or North Carolina’s regulatory objectives for renewable energy deployment. In the resolution process for such a dispute, what is the most accurate characterization of the role played by the Public Staff of the North Carolina Utilities Commission?
Correct
The question pertains to the regulatory framework governing the interconnection of distributed generation facilities with the electric grid in North Carolina, specifically addressing the role of the North Carolina Utilities Commission (NCUC) and the relevant statutory provisions. The Public Staff of the NCUC plays a crucial advisory and investigative role in matters brought before the Commission. In the context of interconnection disputes, the Public Staff’s recommendations are often considered by the Commission in its final decision. The NCUC, established under North Carolina General Statutes Chapter 62, is the primary regulatory body for public utilities in the state. While North Carolina has enacted legislation and adopted rules that facilitate the interconnection of renewable energy facilities, such as the Renewable Energy and Energy Efficiency Portfolio Standard (REPS) under G.S. 62-133.8, and specific interconnection rules that may be developed or refined through NCUC proceedings, the direct statutory mandate for the Public Staff to *approve* interconnection agreements unilaterally is not the primary mechanism. Instead, the Public Staff provides expert analysis and recommendations to the Commission, which then issues orders. Therefore, the most accurate description of the Public Staff’s role in resolving such disputes, as envisioned by the regulatory structure, is to provide recommendations to the Commission. This aligns with the Commission’s ultimate authority to adjudicate disputes and issue binding orders regarding utility operations and customer interconnections. The Public Staff’s involvement is integral to the Commission’s decision-making process, offering technical and economic expertise to ensure that interconnection rules are applied fairly and effectively, promoting the development of renewable energy while maintaining grid reliability and reasonable rates for all customers.
Incorrect
The question pertains to the regulatory framework governing the interconnection of distributed generation facilities with the electric grid in North Carolina, specifically addressing the role of the North Carolina Utilities Commission (NCUC) and the relevant statutory provisions. The Public Staff of the NCUC plays a crucial advisory and investigative role in matters brought before the Commission. In the context of interconnection disputes, the Public Staff’s recommendations are often considered by the Commission in its final decision. The NCUC, established under North Carolina General Statutes Chapter 62, is the primary regulatory body for public utilities in the state. While North Carolina has enacted legislation and adopted rules that facilitate the interconnection of renewable energy facilities, such as the Renewable Energy and Energy Efficiency Portfolio Standard (REPS) under G.S. 62-133.8, and specific interconnection rules that may be developed or refined through NCUC proceedings, the direct statutory mandate for the Public Staff to *approve* interconnection agreements unilaterally is not the primary mechanism. Instead, the Public Staff provides expert analysis and recommendations to the Commission, which then issues orders. Therefore, the most accurate description of the Public Staff’s role in resolving such disputes, as envisioned by the regulatory structure, is to provide recommendations to the Commission. This aligns with the Commission’s ultimate authority to adjudicate disputes and issue binding orders regarding utility operations and customer interconnections. The Public Staff’s involvement is integral to the Commission’s decision-making process, offering technical and economic expertise to ensure that interconnection rules are applied fairly and effectively, promoting the development of renewable energy while maintaining grid reliability and reasonable rates for all customers.
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Question 4 of 30
4. Question
In North Carolina, when a utility company seeks approval for a large-scale solar photovoltaic facility intended to serve its customer base, which entity is primarily responsible for conducting an independent analysis of the project’s public interest, environmental considerations, and economic feasibility to advise the North Carolina Utilities Commission (NCUC) in its Certificate of Public Convenience and Necessity (CPCN) decision-making process?
Correct
The question pertains to the regulatory framework governing renewable energy projects in North Carolina, specifically concerning the siting and permitting of solar farms. The Public Staff of the North Carolina Utilities Commission (NCUC) plays a crucial role in advising the Commission on matters of public utility regulation. When a utility proposes a major transmission line or a significant generation facility, such as a large solar farm, the NCUC must approve the project through a Certificate of Public Convenience and Necessity (CPCN). The Public Staff’s involvement is integral to this process, as they conduct investigations, prepare reports, and make recommendations to the Commission regarding the public interest, environmental impact, and economic feasibility of the proposed project. Their recommendations are based on analyses conducted in accordance with North Carolina General Statutes, including Chapter 132 (Public Records) and Chapter 62 (Public Utilities), as well as relevant NCUC rules and policies. The Public Staff acts as an independent party, advocating for the public interest throughout the CPCN proceeding. Therefore, their role is not to directly issue permits for individual components of a solar farm but rather to provide expert analysis and recommendations to the Commission, which ultimately grants or denies the CPCN. Environmental permits, such as those from the North Carolina Department of Environmental Quality (NCDEQ), are separate but often considered during the CPCN review. Utility companies themselves are responsible for the operational aspects and direct construction oversight, but the overarching approval for the project’s necessity and public impact rests with the NCUC, informed by the Public Staff’s work.
Incorrect
The question pertains to the regulatory framework governing renewable energy projects in North Carolina, specifically concerning the siting and permitting of solar farms. The Public Staff of the North Carolina Utilities Commission (NCUC) plays a crucial role in advising the Commission on matters of public utility regulation. When a utility proposes a major transmission line or a significant generation facility, such as a large solar farm, the NCUC must approve the project through a Certificate of Public Convenience and Necessity (CPCN). The Public Staff’s involvement is integral to this process, as they conduct investigations, prepare reports, and make recommendations to the Commission regarding the public interest, environmental impact, and economic feasibility of the proposed project. Their recommendations are based on analyses conducted in accordance with North Carolina General Statutes, including Chapter 132 (Public Records) and Chapter 62 (Public Utilities), as well as relevant NCUC rules and policies. The Public Staff acts as an independent party, advocating for the public interest throughout the CPCN proceeding. Therefore, their role is not to directly issue permits for individual components of a solar farm but rather to provide expert analysis and recommendations to the Commission, which ultimately grants or denies the CPCN. Environmental permits, such as those from the North Carolina Department of Environmental Quality (NCDEQ), are separate but often considered during the CPCN review. Utility companies themselves are responsible for the operational aspects and direct construction oversight, but the overarching approval for the project’s necessity and public impact rests with the NCUC, informed by the Public Staff’s work.
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Question 5 of 30
5. Question
A regulated electric cooperative in North Carolina proposes to implement a new monthly fixed charge for all customers with an interconnected solar photovoltaic system exceeding 10 kilowatts, in addition to their existing energy consumption charges. This proposal aims to recover grid infrastructure costs that the cooperative argues are not fully covered by current rate structures for customers with behind-the-meter generation. What is the primary regulatory body responsible for reviewing and approving or denying such a proposal from this electric cooperative, and what is the overarching principle guiding its decision-making process in North Carolina?
Correct
The North Carolina Utilities Commission (NCUC) has a statutory mandate to ensure that public utilities provide safe, reliable, and adequate service at reasonable rates. In the context of renewable energy development and interconnection, particularly for distributed generation like solar photovoltaic systems, the NCUC’s authority extends to setting rules and guidelines that govern how these systems connect to the grid and how their output is compensated. Specifically, the NCUC oversees rate structures, interconnection standards, and net metering policies, which are critical for the economic viability of such projects. When a utility proposes changes to its rate schedules or interconnection rules that could significantly impact renewable energy deployment, these proposals are subject to a formal review process by the NCUC. This process typically involves public notice, opportunities for stakeholder input (including from renewable energy developers, consumer advocates, and other interested parties), and evidentiary hearings. The Commission then issues a decision based on the evidence presented, weighing the interests of the utility, its customers, and the broader public policy goals, such as promoting clean energy. Therefore, a utility seeking to implement new charges or alter existing policies related to distributed solar interconnection must navigate this regulatory framework, submitting its proposed changes for approval. The NCUC’s decision is guided by principles of reasonableness, fairness, and the public interest, as defined by North Carolina General Statutes.
Incorrect
The North Carolina Utilities Commission (NCUC) has a statutory mandate to ensure that public utilities provide safe, reliable, and adequate service at reasonable rates. In the context of renewable energy development and interconnection, particularly for distributed generation like solar photovoltaic systems, the NCUC’s authority extends to setting rules and guidelines that govern how these systems connect to the grid and how their output is compensated. Specifically, the NCUC oversees rate structures, interconnection standards, and net metering policies, which are critical for the economic viability of such projects. When a utility proposes changes to its rate schedules or interconnection rules that could significantly impact renewable energy deployment, these proposals are subject to a formal review process by the NCUC. This process typically involves public notice, opportunities for stakeholder input (including from renewable energy developers, consumer advocates, and other interested parties), and evidentiary hearings. The Commission then issues a decision based on the evidence presented, weighing the interests of the utility, its customers, and the broader public policy goals, such as promoting clean energy. Therefore, a utility seeking to implement new charges or alter existing policies related to distributed solar interconnection must navigate this regulatory framework, submitting its proposed changes for approval. The NCUC’s decision is guided by principles of reasonableness, fairness, and the public interest, as defined by North Carolina General Statutes.
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Question 6 of 30
6. Question
A utility company in North Carolina proposes to construct a large-scale solar photovoltaic facility in a rural county. The facility is intended to serve the growing demand for renewable energy in the state. Before breaking ground, what is the most critical regulatory approval the company must obtain from the state government to legally proceed with construction and operation of this new generating asset?
Correct
The North Carolina Utilities Commission (NCUC) has broad authority over public utilities, including the regulation of rates, services, and facilities. When considering the siting of new energy generation facilities, particularly those that may impact the environment or public interest, the NCUC’s Certificate of Public Convenience and Necessity (CPCN) process is paramount. This process ensures that new utility infrastructure aligns with the public good and meets established regulatory standards. Specifically, North Carolina General Statute \(§ 62-110.1\) mandates that no public utility shall construct or acquire any new generating facility or transmission line exceeding a certain voltage without first obtaining a CPCN from the Commission. The statute requires the Commission to consider various factors, including the impact on the environment, the public interest, and the economic feasibility of the project. For a facility like the proposed solar farm in the scenario, which is a significant energy generation project, obtaining a CPCN is a mandatory prerequisite. This process involves detailed applications, public hearings, and thorough review by the Commission. Failure to secure a CPCN before construction can lead to penalties and injunctions, requiring the utility to cease operations or even dismantle the facility. Therefore, the primary regulatory hurdle for such a project is the NCUC’s approval through the CPCN process, as outlined in state law.
Incorrect
The North Carolina Utilities Commission (NCUC) has broad authority over public utilities, including the regulation of rates, services, and facilities. When considering the siting of new energy generation facilities, particularly those that may impact the environment or public interest, the NCUC’s Certificate of Public Convenience and Necessity (CPCN) process is paramount. This process ensures that new utility infrastructure aligns with the public good and meets established regulatory standards. Specifically, North Carolina General Statute \(§ 62-110.1\) mandates that no public utility shall construct or acquire any new generating facility or transmission line exceeding a certain voltage without first obtaining a CPCN from the Commission. The statute requires the Commission to consider various factors, including the impact on the environment, the public interest, and the economic feasibility of the project. For a facility like the proposed solar farm in the scenario, which is a significant energy generation project, obtaining a CPCN is a mandatory prerequisite. This process involves detailed applications, public hearings, and thorough review by the Commission. Failure to secure a CPCN before construction can lead to penalties and injunctions, requiring the utility to cease operations or even dismantle the facility. Therefore, the primary regulatory hurdle for such a project is the NCUC’s approval through the CPCN process, as outlined in state law.
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Question 7 of 30
7. Question
A regulated electric utility in North Carolina proposes to construct a large-scale solar photovoltaic facility to meet projected load growth and state renewable energy mandates. The utility seeks approval from the North Carolina Utilities Commission (NCUC) not only for the construction of the facility itself but also for the specific debt financing structure it intends to use to fund the project. What is the primary regulatory mechanism through which the NCUC exercises its authority to permit the construction and oversee the financial arrangements for such a utility-proposed infrastructure project in North Carolina?
Correct
The North Carolina Utilities Commission (NCUC) has a statutory mandate to ensure that public utilities provide safe, adequate, and reliable service at reasonable rates. This includes the oversight of utility infrastructure development and the approval of associated financing mechanisms. When a utility proposes to construct a new generation facility, such as a solar farm, it must seek a Certificate of Public Convenience and Necessity (CPCN) from the NCUC. The CPCN process involves a thorough review of the project’s need, cost-effectiveness, environmental impact, and the utility’s ability to finance and operate it. North Carolina General Statute §62-82 specifically addresses the requirements for obtaining a CPCN, emphasizing public interest considerations. The financing of such projects often involves the issuance of bonds or other debt instruments, which require NCUC approval to ensure that the debt burden on ratepayers is just and reasonable. The Commission’s approval of a utility’s financing plan is critical for the project’s viability and for protecting consumers from excessive costs. Therefore, the approval of the financing for a new solar farm project by the NCUC is a direct reflection of its regulatory authority over utility investments and ratepayer protection.
Incorrect
The North Carolina Utilities Commission (NCUC) has a statutory mandate to ensure that public utilities provide safe, adequate, and reliable service at reasonable rates. This includes the oversight of utility infrastructure development and the approval of associated financing mechanisms. When a utility proposes to construct a new generation facility, such as a solar farm, it must seek a Certificate of Public Convenience and Necessity (CPCN) from the NCUC. The CPCN process involves a thorough review of the project’s need, cost-effectiveness, environmental impact, and the utility’s ability to finance and operate it. North Carolina General Statute §62-82 specifically addresses the requirements for obtaining a CPCN, emphasizing public interest considerations. The financing of such projects often involves the issuance of bonds or other debt instruments, which require NCUC approval to ensure that the debt burden on ratepayers is just and reasonable. The Commission’s approval of a utility’s financing plan is critical for the project’s viability and for protecting consumers from excessive costs. Therefore, the approval of the financing for a new solar farm project by the NCUC is a direct reflection of its regulatory authority over utility investments and ratepayer protection.
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Question 8 of 30
8. Question
Consider a proposed offshore wind energy project with turbines located 15 nautical miles from the North Carolina coast and export cables that traverse the seabed from the turbines to a point approximately 5 nautical miles offshore before making landfall. Which federal agency possesses the primary leasing and permitting authority for the offshore components of this project situated beyond the three-nautical-mile limit of North Carolina’s territorial sea?
Correct
The question probes the regulatory framework governing the siting of offshore wind energy facilities in North Carolina, specifically concerning the interplay between federal and state authority. The Outer Continental Shelf Lands Act (OCSLA) generally vests primary authority for leasing and development of submerged lands within the Outer Continental Shelf (OCS) with the federal government, primarily through the Bureau of Ocean Energy Management (BOEM). BOEM is responsible for conducting lease sales, environmental reviews, and issuing leases for offshore energy development, including wind. North Carolina, while having an interest in the economic and environmental impacts of such development, exercises its regulatory authority primarily over state waters, which extend three nautical miles from the coast. Therefore, when a wind energy project’s infrastructure, such as turbines and export cables, extends beyond these state waters and into the OCS, federal jurisdiction under OCSLA becomes paramount for the leasing and permitting of the offshore components. State agencies, such as the North Carolina Department of Environmental Quality (NCDEQ), will still play a crucial role in reviewing and permitting onshore components, as well as coordinating with federal agencies on environmental and coastal zone management issues pursuant to federal laws like the Coastal Zone Management Act (CZMA). However, the fundamental authority to lease the seabed and authorize the offshore infrastructure on the OCS rests with BOEM.
Incorrect
The question probes the regulatory framework governing the siting of offshore wind energy facilities in North Carolina, specifically concerning the interplay between federal and state authority. The Outer Continental Shelf Lands Act (OCSLA) generally vests primary authority for leasing and development of submerged lands within the Outer Continental Shelf (OCS) with the federal government, primarily through the Bureau of Ocean Energy Management (BOEM). BOEM is responsible for conducting lease sales, environmental reviews, and issuing leases for offshore energy development, including wind. North Carolina, while having an interest in the economic and environmental impacts of such development, exercises its regulatory authority primarily over state waters, which extend three nautical miles from the coast. Therefore, when a wind energy project’s infrastructure, such as turbines and export cables, extends beyond these state waters and into the OCS, federal jurisdiction under OCSLA becomes paramount for the leasing and permitting of the offshore components. State agencies, such as the North Carolina Department of Environmental Quality (NCDEQ), will still play a crucial role in reviewing and permitting onshore components, as well as coordinating with federal agencies on environmental and coastal zone management issues pursuant to federal laws like the Coastal Zone Management Act (CZMA). However, the fundamental authority to lease the seabed and authorize the offshore infrastructure on the OCS rests with BOEM.
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Question 9 of 30
9. Question
A major electric cooperative in North Carolina proposes to include the capital costs and operational expenses of a newly constructed, advanced combined-cycle natural gas power plant in its rate base. The cooperative argues that this investment is essential for meeting the projected energy demand of its service territory and enhancing grid reliability. What is the primary regulatory mechanism and key consideration the North Carolina Utilities Commission will employ to evaluate the cooperative’s request for cost recovery of this new facility?
Correct
The North Carolina Utilities Commission (NCUC) has the authority to approve or deny rate adjustments for regulated utilities. When a utility proposes a change in its rates, it must demonstrate that the proposed rates are just and reasonable and will allow the utility to recover its prudently incurred costs while earning a fair rate of return on its invested capital. This process involves a detailed examination of the utility’s operating expenses, capital investments, and revenue requirements. The NCUC considers various factors, including the cost of service, the impact on consumers, and the utility’s financial health. For a utility to successfully recover costs associated with new generation facilities, it must show that these investments were prudent and necessary to meet the state’s energy needs and that the costs are reasonable. The commission’s decision-making process is guided by North Carolina General Statutes, particularly those related to public utilities and rate-making. The concept of “prudence” is central, meaning the utility acted reasonably and responsibly in making investment decisions and incurring costs. If a utility fails to demonstrate prudence, the NCUC may disallow the recovery of those costs from ratepayers. The question revolves around the regulatory framework governing cost recovery for new energy infrastructure in North Carolina, specifically focusing on the NCUC’s role and the criteria for approving such recovery. The correct answer reflects the NCUC’s statutory authority and the principle of prudency review for utility investments.
Incorrect
The North Carolina Utilities Commission (NCUC) has the authority to approve or deny rate adjustments for regulated utilities. When a utility proposes a change in its rates, it must demonstrate that the proposed rates are just and reasonable and will allow the utility to recover its prudently incurred costs while earning a fair rate of return on its invested capital. This process involves a detailed examination of the utility’s operating expenses, capital investments, and revenue requirements. The NCUC considers various factors, including the cost of service, the impact on consumers, and the utility’s financial health. For a utility to successfully recover costs associated with new generation facilities, it must show that these investments were prudent and necessary to meet the state’s energy needs and that the costs are reasonable. The commission’s decision-making process is guided by North Carolina General Statutes, particularly those related to public utilities and rate-making. The concept of “prudence” is central, meaning the utility acted reasonably and responsibly in making investment decisions and incurring costs. If a utility fails to demonstrate prudence, the NCUC may disallow the recovery of those costs from ratepayers. The question revolves around the regulatory framework governing cost recovery for new energy infrastructure in North Carolina, specifically focusing on the NCUC’s role and the criteria for approving such recovery. The correct answer reflects the NCUC’s statutory authority and the principle of prudency review for utility investments.
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Question 10 of 30
10. Question
When a developer proposes constructing a new 800-megawatt combined cycle natural gas power plant in rural North Carolina, seeking a certificate of public convenience and necessity from the North Carolina Utilities Commission, what is the primary legal and regulatory framework that governs the Commission’s review and approval process for such a facility?
Correct
The North Carolina Utilities Commission (NCUC) has the authority to grant certificates of public convenience and necessity (CPCNs) for major utility projects, including the construction of new power generation facilities. This process is governed by North Carolina General Statutes, particularly Chapter 62, and the NCUC’s Rules and Regulations. When evaluating a CPCN application for a new power plant, the NCUC considers a broad range of factors to ensure the project serves the public interest. These factors are designed to balance the need for reliable and affordable energy with environmental protection, economic development, and the impact on existing utility systems and customers. Key considerations include the projected demand for electricity, the availability and cost of fuel, the environmental impact of the facility (including air and water emissions, waste disposal, and land use), the economic benefits and costs to the state and its citizens, the reliability of the proposed power source, and the overall impact on the state’s energy infrastructure and grid stability. The NCUC’s decision-making process involves extensive public hearings, expert testimony, and detailed reviews of the applicant’s proposals and alternatives. The ultimate goal is to determine if the proposed facility is necessary, will be constructed and operated in a manner that is safe, efficient, and environmentally sound, and will provide a reasonable cost of service to the utility’s customers. The Public Staff of the NCUC plays a crucial role in representing the interests of the public throughout this process, conducting independent analysis and providing recommendations to the Commission.
Incorrect
The North Carolina Utilities Commission (NCUC) has the authority to grant certificates of public convenience and necessity (CPCNs) for major utility projects, including the construction of new power generation facilities. This process is governed by North Carolina General Statutes, particularly Chapter 62, and the NCUC’s Rules and Regulations. When evaluating a CPCN application for a new power plant, the NCUC considers a broad range of factors to ensure the project serves the public interest. These factors are designed to balance the need for reliable and affordable energy with environmental protection, economic development, and the impact on existing utility systems and customers. Key considerations include the projected demand for electricity, the availability and cost of fuel, the environmental impact of the facility (including air and water emissions, waste disposal, and land use), the economic benefits and costs to the state and its citizens, the reliability of the proposed power source, and the overall impact on the state’s energy infrastructure and grid stability. The NCUC’s decision-making process involves extensive public hearings, expert testimony, and detailed reviews of the applicant’s proposals and alternatives. The ultimate goal is to determine if the proposed facility is necessary, will be constructed and operated in a manner that is safe, efficient, and environmentally sound, and will provide a reasonable cost of service to the utility’s customers. The Public Staff of the NCUC plays a crucial role in representing the interests of the public throughout this process, conducting independent analysis and providing recommendations to the Commission.
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Question 11 of 30
11. Question
Consider a residential property owner in Asheville, North Carolina, who has installed a 7-kilowatt rooftop solar photovoltaic system. This system is intended to offset their electricity consumption. If the system generates more electricity than the property consumes during daylight hours, how is the excess energy typically managed and credited under North Carolina’s current energy laws and regulations for systems of this size?
Correct
The question probes the understanding of North Carolina’s regulatory framework for distributed generation, specifically focusing on net metering policies and their interaction with interconnection standards. North Carolina law, particularly through Session Law 2007-397, established guidelines for net metering for customer-owned renewable energy facilities. This law, codified in N.C. Gen. Stat. §62-133.8, mandates that electric public utilities offer net metering services. The statute defines eligible systems as those with a capacity of 1 megawatt or less, utilizing renewable energy sources. Crucially, it specifies that customers are credited for excess energy sent to the grid at their retail rate. The interconnection standards are governed by rules set by the North Carolina Utilities Commission (NCUC), often found in their rules and regulations, which ensure the safe and reliable integration of distributed generation into the grid. These standards address technical requirements for inverters, metering equipment, and safety disconnects. Therefore, the most accurate characterization of the legal framework for a small-scale solar installation in North Carolina would involve adherence to the net metering provisions as defined by state statute and the interconnection requirements established by the NCUC. The other options present scenarios that are either not directly mandated by North Carolina law for this specific capacity, misrepresent the crediting mechanism, or impose conditions not universally applied under the existing net metering statute for systems of this size. For instance, a system exceeding 1 megawatt typically falls under different regulatory treatment, and while interconnection agreements are standard, the specific terms for crediting excess generation are tied to the net metering statute. The concept of a “deemed purchase agreement” might apply in other jurisdictions or for larger systems, but North Carolina’s net metering law is specific in its retail rate crediting.
Incorrect
The question probes the understanding of North Carolina’s regulatory framework for distributed generation, specifically focusing on net metering policies and their interaction with interconnection standards. North Carolina law, particularly through Session Law 2007-397, established guidelines for net metering for customer-owned renewable energy facilities. This law, codified in N.C. Gen. Stat. §62-133.8, mandates that electric public utilities offer net metering services. The statute defines eligible systems as those with a capacity of 1 megawatt or less, utilizing renewable energy sources. Crucially, it specifies that customers are credited for excess energy sent to the grid at their retail rate. The interconnection standards are governed by rules set by the North Carolina Utilities Commission (NCUC), often found in their rules and regulations, which ensure the safe and reliable integration of distributed generation into the grid. These standards address technical requirements for inverters, metering equipment, and safety disconnects. Therefore, the most accurate characterization of the legal framework for a small-scale solar installation in North Carolina would involve adherence to the net metering provisions as defined by state statute and the interconnection requirements established by the NCUC. The other options present scenarios that are either not directly mandated by North Carolina law for this specific capacity, misrepresent the crediting mechanism, or impose conditions not universally applied under the existing net metering statute for systems of this size. For instance, a system exceeding 1 megawatt typically falls under different regulatory treatment, and while interconnection agreements are standard, the specific terms for crediting excess generation are tied to the net metering statute. The concept of a “deemed purchase agreement” might apply in other jurisdictions or for larger systems, but North Carolina’s net metering law is specific in its retail rate crediting.
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Question 12 of 30
12. Question
Following the operational lifespan of a proposed offshore wind energy project located within North Carolina’s territorial waters, a developer must submit a comprehensive plan for the complete removal of all associated infrastructure, including turbines, foundations, and subsea cables. Which state agency holds the primary regulatory authority for reviewing and approving such decommissioning plans to ensure compliance with North Carolina’s environmental protection and coastal management laws, thereby mandating the restoration of the seabed?
Correct
The question revolves around the legal framework governing the decommissioning of offshore wind energy facilities in North Carolina, specifically focusing on the roles and responsibilities of various entities under state law. North Carolina law, particularly the Coastal Area Management Act (CAMA) and related regulations, vests significant authority in the North Carolina Department of Environmental Quality (NCDEQ) for managing coastal development and environmental protection. When an offshore wind farm, such as the one proposed off the coast of Kitty Hawk, reaches the end of its operational life, the process of decommissioning must adhere to stringent environmental and safety standards. This involves the removal of all structures, including turbines, foundations, and subsea cables, to restore the seabed to its pre-construction condition as much as feasible. The NCDEQ, through its various divisions like the Division of Coastal Management and the Division of Energy, Mineral, and Land Resources, plays a crucial role in reviewing and approving decommissioning plans. Developers are typically required to submit comprehensive plans detailing the methods for removal, waste disposal, and site restoration, along with financial assurances to guarantee the completion of these activities. While the federal Bureau of Ocean Energy Management (BOEM) oversees the leasing and permitting of offshore energy projects on the Outer Continental Shelf, state agencies like NCDEQ are responsible for ensuring that decommissioning activities comply with state environmental laws and coastal zone management policies, particularly concerning impacts within state waters or on state-managed resources. Therefore, the primary state agency responsible for overseeing and approving the decommissioning plans for offshore wind energy facilities in North Carolina, ensuring compliance with state environmental regulations, is the North Carolina Department of Environmental Quality.
Incorrect
The question revolves around the legal framework governing the decommissioning of offshore wind energy facilities in North Carolina, specifically focusing on the roles and responsibilities of various entities under state law. North Carolina law, particularly the Coastal Area Management Act (CAMA) and related regulations, vests significant authority in the North Carolina Department of Environmental Quality (NCDEQ) for managing coastal development and environmental protection. When an offshore wind farm, such as the one proposed off the coast of Kitty Hawk, reaches the end of its operational life, the process of decommissioning must adhere to stringent environmental and safety standards. This involves the removal of all structures, including turbines, foundations, and subsea cables, to restore the seabed to its pre-construction condition as much as feasible. The NCDEQ, through its various divisions like the Division of Coastal Management and the Division of Energy, Mineral, and Land Resources, plays a crucial role in reviewing and approving decommissioning plans. Developers are typically required to submit comprehensive plans detailing the methods for removal, waste disposal, and site restoration, along with financial assurances to guarantee the completion of these activities. While the federal Bureau of Ocean Energy Management (BOEM) oversees the leasing and permitting of offshore energy projects on the Outer Continental Shelf, state agencies like NCDEQ are responsible for ensuring that decommissioning activities comply with state environmental laws and coastal zone management policies, particularly concerning impacts within state waters or on state-managed resources. Therefore, the primary state agency responsible for overseeing and approving the decommissioning plans for offshore wind energy facilities in North Carolina, ensuring compliance with state environmental regulations, is the North Carolina Department of Environmental Quality.
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Question 13 of 30
13. Question
A regional electric cooperative in North Carolina, serving a significant portion of the state’s rural western counties, proposes to construct and operate a 150-megawatt utility-scale solar photovoltaic generation facility. This facility is intended to supplement its existing power supply portfolio and meet projected demand growth. Prior to breaking ground, what is the primary regulatory hurdle the cooperative must clear with the North Carolina state government to legally operate this new facility within its franchised service territory?
Correct
The North Carolina Utilities Commission (NCUC) has broad authority over public utilities, including the regulation of rates, services, and facilities. The Electric Power Quality and Reliability Act, codified in North Carolina General Statutes Chapter 132, Article 21, specifically addresses the standards for reliability and service quality for electric public utilities operating within the state. This act empowers the NCUC to establish rules and regulations to ensure that utilities provide safe, adequate, and reliable service. When a utility proposes significant changes to its service territory, such as acquiring or constructing new generation facilities that could impact the existing service framework, it must seek approval from the NCUC. This approval process typically involves demonstrating that the proposed action is in the public interest, will not unduly burden existing customers, and meets established reliability standards. The NCUC’s role is to balance the utility’s operational needs with the public’s right to dependable and reasonably priced energy. Therefore, a utility seeking to operate a new, large-scale solar farm within its franchised area in North Carolina would need to undergo a regulatory review and obtain a Certificate of Public Convenience and Necessity (CPCN) from the NCUC, demonstrating compliance with relevant statutes and commission rules concerning service provision and reliability.
Incorrect
The North Carolina Utilities Commission (NCUC) has broad authority over public utilities, including the regulation of rates, services, and facilities. The Electric Power Quality and Reliability Act, codified in North Carolina General Statutes Chapter 132, Article 21, specifically addresses the standards for reliability and service quality for electric public utilities operating within the state. This act empowers the NCUC to establish rules and regulations to ensure that utilities provide safe, adequate, and reliable service. When a utility proposes significant changes to its service territory, such as acquiring or constructing new generation facilities that could impact the existing service framework, it must seek approval from the NCUC. This approval process typically involves demonstrating that the proposed action is in the public interest, will not unduly burden existing customers, and meets established reliability standards. The NCUC’s role is to balance the utility’s operational needs with the public’s right to dependable and reasonably priced energy. Therefore, a utility seeking to operate a new, large-scale solar farm within its franchised area in North Carolina would need to undergo a regulatory review and obtain a Certificate of Public Convenience and Necessity (CPCN) from the NCUC, demonstrating compliance with relevant statutes and commission rules concerning service provision and reliability.
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Question 14 of 30
14. Question
A regional electric cooperative in North Carolina, operating under the jurisdiction of the North Carolina Utilities Commission, has filed a petition to adjust its retail electricity rates. The cooperative seeks to include in its rate base certain investments made in new distributed generation facilities that are not yet interconnected and operational. These facilities are intended to serve specific customer classes and are in various stages of construction. The cooperative argues that these investments are prudent and necessary for future service reliability and meeting projected demand growth, and therefore should be allowed to earn a return during their construction phase. What is the primary regulatory consideration the NCUC will evaluate when determining whether to permit the inclusion of these un-operational, distributed generation assets in the cooperative’s rate base for current rate-making purposes?
Correct
The North Carolina Utilities Commission (NCUC) has a mandate to ensure that electric public utilities provide safe, reliable, and reasonably priced service. When considering a petition for a rate increase, the NCUC must evaluate various components of the utility’s proposed costs and revenue requirements. A key element in this process is the determination of a fair rate of return on the utility’s invested capital, often referred to as the “rate base.” This rate base represents the value of the utility’s property used and useful in providing service. The NCUC employs specific methodologies to establish this rate base, considering factors such as original cost less depreciation, and sometimes including allowances for construction work in progress (CWIP) or materials and supplies, depending on regulatory precedent and statutory allowances within North Carolina law. The commission’s decision on the rate base, along with the authorized rate of return, directly impacts the revenue the utility is allowed to collect from its customers. Therefore, a thorough and legally compliant assessment of the rate base is foundational to any rate-making proceeding before the NCUC, ensuring that customer charges are just and reasonable while allowing the utility to maintain its financial integrity and ability to serve the public.
Incorrect
The North Carolina Utilities Commission (NCUC) has a mandate to ensure that electric public utilities provide safe, reliable, and reasonably priced service. When considering a petition for a rate increase, the NCUC must evaluate various components of the utility’s proposed costs and revenue requirements. A key element in this process is the determination of a fair rate of return on the utility’s invested capital, often referred to as the “rate base.” This rate base represents the value of the utility’s property used and useful in providing service. The NCUC employs specific methodologies to establish this rate base, considering factors such as original cost less depreciation, and sometimes including allowances for construction work in progress (CWIP) or materials and supplies, depending on regulatory precedent and statutory allowances within North Carolina law. The commission’s decision on the rate base, along with the authorized rate of return, directly impacts the revenue the utility is allowed to collect from its customers. Therefore, a thorough and legally compliant assessment of the rate base is foundational to any rate-making proceeding before the NCUC, ensuring that customer charges are just and reasonable while allowing the utility to maintain its financial integrity and ability to serve the public.
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Question 15 of 30
15. Question
Consider an electric utility operating within North Carolina that proposes to acquire a substantial utility-scale solar photovoltaic facility from an independent power producer. The North Carolina Utilities Commission (NCUC) is tasked with reviewing this acquisition. Which of the following accurately describes the primary legal and regulatory framework governing the NCUC’s approval process for such an asset transfer, considering North Carolina’s energy policy objectives?
Correct
The North Carolina Utilities Commission (NCUC) has broad authority to regulate public utilities, including electric power generation and distribution. When a utility proposes to acquire a significant asset, such as a large solar farm, the NCUC must review the proposal to ensure it is in the public interest. This review typically involves an assessment of the project’s economic feasibility, reliability, environmental impact, and compliance with state energy policies, such as those promoting renewable energy development. The Public Staff of the NCUC plays a crucial role in this process by conducting independent analyses and providing recommendations to the Commission. The Electric Power Purchasing and Production Act (EPPPA) of 2007, as amended, provides a framework for competitive energy procurement in North Carolina, including provisions for independent power producers (IPPs) and utility-owned generation. Section 115A-20 of the North Carolina General Statutes outlines the NCUC’s authority to approve or disapprove utility mergers, acquisitions, or dispositions of assets that would affect the provision of utility services. In this scenario, the acquisition of the solar farm by the electric utility would be subject to NCUC approval under these general regulatory powers and potentially specific provisions within EPPPA if it involves a change in generation resource planning or procurement. The NCUC’s decision-making process is quasi-judicial, meaning it follows established procedures for hearings, evidence presentation, and deliberation, aiming to balance the interests of the utility, its customers, and the broader public good.
Incorrect
The North Carolina Utilities Commission (NCUC) has broad authority to regulate public utilities, including electric power generation and distribution. When a utility proposes to acquire a significant asset, such as a large solar farm, the NCUC must review the proposal to ensure it is in the public interest. This review typically involves an assessment of the project’s economic feasibility, reliability, environmental impact, and compliance with state energy policies, such as those promoting renewable energy development. The Public Staff of the NCUC plays a crucial role in this process by conducting independent analyses and providing recommendations to the Commission. The Electric Power Purchasing and Production Act (EPPPA) of 2007, as amended, provides a framework for competitive energy procurement in North Carolina, including provisions for independent power producers (IPPs) and utility-owned generation. Section 115A-20 of the North Carolina General Statutes outlines the NCUC’s authority to approve or disapprove utility mergers, acquisitions, or dispositions of assets that would affect the provision of utility services. In this scenario, the acquisition of the solar farm by the electric utility would be subject to NCUC approval under these general regulatory powers and potentially specific provisions within EPPPA if it involves a change in generation resource planning or procurement. The NCUC’s decision-making process is quasi-judicial, meaning it follows established procedures for hearings, evidence presentation, and deliberation, aiming to balance the interests of the utility, its customers, and the broader public good.
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Question 16 of 30
16. Question
Consider a North Carolina-based electric utility that has recently completed the construction of a new solar farm intended to meet a portion of the state’s growing renewable energy demand. The utility files a request with the North Carolina Utilities Commission (NCUC) to recover the capital costs and operational expenses associated with this new facility through an adjustment to its existing rate structure. Which state entity is statutorily mandated to conduct an independent review of the utility’s filing and present its findings and recommendations to the NCUC to advocate for the interests of North Carolina’s utility consumers?
Correct
In North Carolina, the Public Staff, within the Department of Justice, plays a crucial role in representing the interests of the public in utility rate cases and other regulatory proceedings before the North Carolina Utilities Commission (NCUC). When a regulated utility, such as an electric power company seeking to recover costs associated with a new generating facility, files a rate increase request, the Public Staff conducts an independent analysis of the utility’s proposed rates and financial data. This analysis involves scrutinizing the prudence and reasonableness of the utility’s expenditures, including capital investments in new energy infrastructure. The Public Staff’s findings and recommendations are then presented to the NCUC, which ultimately makes the final decision on whether to approve, modify, or deny the proposed rate increase. This process ensures that ratepayer interests are advocated for, and that utilities are held accountable for their operational and investment decisions, aligning with the commission’s mandate to ensure just and reasonable rates for consumers in North Carolina. The Public Staff’s involvement is a cornerstone of the regulatory framework designed to balance the needs of utility providers with the protection of the public interest.
Incorrect
In North Carolina, the Public Staff, within the Department of Justice, plays a crucial role in representing the interests of the public in utility rate cases and other regulatory proceedings before the North Carolina Utilities Commission (NCUC). When a regulated utility, such as an electric power company seeking to recover costs associated with a new generating facility, files a rate increase request, the Public Staff conducts an independent analysis of the utility’s proposed rates and financial data. This analysis involves scrutinizing the prudence and reasonableness of the utility’s expenditures, including capital investments in new energy infrastructure. The Public Staff’s findings and recommendations are then presented to the NCUC, which ultimately makes the final decision on whether to approve, modify, or deny the proposed rate increase. This process ensures that ratepayer interests are advocated for, and that utilities are held accountable for their operational and investment decisions, aligning with the commission’s mandate to ensure just and reasonable rates for consumers in North Carolina. The Public Staff’s involvement is a cornerstone of the regulatory framework designed to balance the needs of utility providers with the protection of the public interest.
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Question 17 of 30
17. Question
Which governmental entity in North Carolina is primarily responsible for establishing and enforcing the technical interconnection standards for customer-owned renewable energy facilities seeking to connect to the state’s electric grid, ensuring compliance with federal guidelines like IEEE 1547?
Correct
The question pertains to the regulatory framework governing distributed generation in North Carolina, specifically focusing on the interconnection standards for customer-owned renewable energy facilities. In North Carolina, the Public Staff of the North Carolina Utilities Commission (NCUC) plays a crucial role in developing and overseeing these interconnection rules. The current interconnection standards are largely based on the IEEE 1547 standard, which provides a technical foundation for connecting distributed energy resources to the electric grid. The NCUC, through its rulemaking and docket proceedings, has adopted and refined these standards to address state-specific concerns, including grid reliability, safety, and fair cost allocation. Specifically, the NCUC’s rules, often found within its administrative code and through specific dockets addressing distributed generation, mandate adherence to these technical requirements for interconnection. The development of these rules involves stakeholder input, including utilities, developers, and consumer advocates, to ensure a balanced approach. Therefore, the primary regulatory body responsible for establishing and enforcing these interconnection standards in North Carolina is the North Carolina Utilities Commission.
Incorrect
The question pertains to the regulatory framework governing distributed generation in North Carolina, specifically focusing on the interconnection standards for customer-owned renewable energy facilities. In North Carolina, the Public Staff of the North Carolina Utilities Commission (NCUC) plays a crucial role in developing and overseeing these interconnection rules. The current interconnection standards are largely based on the IEEE 1547 standard, which provides a technical foundation for connecting distributed energy resources to the electric grid. The NCUC, through its rulemaking and docket proceedings, has adopted and refined these standards to address state-specific concerns, including grid reliability, safety, and fair cost allocation. Specifically, the NCUC’s rules, often found within its administrative code and through specific dockets addressing distributed generation, mandate adherence to these technical requirements for interconnection. The development of these rules involves stakeholder input, including utilities, developers, and consumer advocates, to ensure a balanced approach. Therefore, the primary regulatory body responsible for establishing and enforcing these interconnection standards in North Carolina is the North Carolina Utilities Commission.
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Question 18 of 30
18. Question
A small business in Asheville, North Carolina, installs a rooftop solar photovoltaic system to offset its electricity consumption. After accounting for its on-site usage, the system exports a significant amount of surplus electricity to the grid during peak daylight hours. According to North Carolina energy law, what is the primary basis for the compensation the business will receive for this exported energy?
Correct
In North Carolina, the regulation of distributed generation, particularly solar energy, is governed by the North Carolina Utilities Commission (NCUC). The Net Metering and An-cillary Services (NMAS) program, established under Session Law 2007-397, as amended by Session Law 2017-192, provides the framework for compensating customers who generate their own electricity, primarily through solar photovoltaic systems, and export excess power to the grid. The law mandates that utilities offer net metering to eligible customers. Under the current statutes and NCUC rules, specifically 23 NCAC 16.1300 series, customers are credited for exported energy at a rate that reflects the utility’s avoided cost of wholesale power, which is determined through a specific methodology. This methodology aims to compensate customers for the energy and capacity they provide to the grid, thereby reducing the utility’s need to generate or purchase power from other sources. The rate is not a simple retail rate credit, nor is it a fixed price for all customers regardless of their system size or export volume. It is a dynamic rate that is updated periodically by the NCUC based on utility filings and analyses of wholesale market conditions and the utility’s generation mix. Therefore, the compensation for exported energy is directly tied to the utility’s avoided cost of wholesale power, as approved by the Commission.
Incorrect
In North Carolina, the regulation of distributed generation, particularly solar energy, is governed by the North Carolina Utilities Commission (NCUC). The Net Metering and An-cillary Services (NMAS) program, established under Session Law 2007-397, as amended by Session Law 2017-192, provides the framework for compensating customers who generate their own electricity, primarily through solar photovoltaic systems, and export excess power to the grid. The law mandates that utilities offer net metering to eligible customers. Under the current statutes and NCUC rules, specifically 23 NCAC 16.1300 series, customers are credited for exported energy at a rate that reflects the utility’s avoided cost of wholesale power, which is determined through a specific methodology. This methodology aims to compensate customers for the energy and capacity they provide to the grid, thereby reducing the utility’s need to generate or purchase power from other sources. The rate is not a simple retail rate credit, nor is it a fixed price for all customers regardless of their system size or export volume. It is a dynamic rate that is updated periodically by the NCUC based on utility filings and analyses of wholesale market conditions and the utility’s generation mix. Therefore, the compensation for exported energy is directly tied to the utility’s avoided cost of wholesale power, as approved by the Commission.
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Question 19 of 30
19. Question
Consider an independent power producer in North Carolina aiming to interconnect a 150-kilowatt solar photovoltaic facility to the distribution grid of a major investor-owned utility. What is the primary regulatory body responsible for establishing and enforcing the technical interconnection standards and ensuring compliance with North Carolina’s net metering statutes for such a facility?
Correct
The question probes the regulatory framework governing distributed generation interconnection in North Carolina, specifically focusing on the process and criteria for qualifying projects under the state’s net metering provisions. In North Carolina, the Public Staff of the North Carolina Utilities Commission (NCUC) plays a crucial role in overseeing utility rate cases and interconnection standards. The relevant legislation, primarily the Renewable Energy and Energy Efficiency Portfolio Standard (REPS) Act of 2007, as amended, and subsequent NCUC rules, establishes the parameters for distributed generation. Projects must meet specific technical and operational requirements to be eligible for net metering. These typically include limits on generating capacity, adherence to interconnection standards set by the utilities and approved by the NCUC, and the use of renewable or efficient energy sources. The process involves an application to the relevant electric utility, which then reviews the project for compliance with established technical interconnection guidelines, ensuring it can be safely and reliably connected to the grid without adversely impacting system stability or other customers. The NCUC, through its rulemaking and adjudication, ensures these standards are applied consistently across investor-owned utilities in the state. The Public Staff’s involvement is often in reviewing these interconnection requests and ensuring compliance with state law and NCUC orders.
Incorrect
The question probes the regulatory framework governing distributed generation interconnection in North Carolina, specifically focusing on the process and criteria for qualifying projects under the state’s net metering provisions. In North Carolina, the Public Staff of the North Carolina Utilities Commission (NCUC) plays a crucial role in overseeing utility rate cases and interconnection standards. The relevant legislation, primarily the Renewable Energy and Energy Efficiency Portfolio Standard (REPS) Act of 2007, as amended, and subsequent NCUC rules, establishes the parameters for distributed generation. Projects must meet specific technical and operational requirements to be eligible for net metering. These typically include limits on generating capacity, adherence to interconnection standards set by the utilities and approved by the NCUC, and the use of renewable or efficient energy sources. The process involves an application to the relevant electric utility, which then reviews the project for compliance with established technical interconnection guidelines, ensuring it can be safely and reliably connected to the grid without adversely impacting system stability or other customers. The NCUC, through its rulemaking and adjudication, ensures these standards are applied consistently across investor-owned utilities in the state. The Public Staff’s involvement is often in reviewing these interconnection requests and ensuring compliance with state law and NCUC orders.
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Question 20 of 30
20. Question
Consider a scenario where a major electric utility in North Carolina proposes the construction of a new 230-kilovolt transmission line spanning several counties to enhance grid reliability and integrate new renewable energy sources. According to North Carolina General Statutes, what is the primary regulatory hurdle the utility must overcome to legally commence construction of this transmission line, and which state agency holds the ultimate authority for granting this approval?
Correct
The North Carolina Utilities Commission (NCUC) has broad authority over public utilities, including the regulation of electric power generation and transmission within the state. When a utility proposes a significant infrastructure project, such as a new transmission line, it must undergo a rigorous Certificate of Public Convenience and Necessity (CPCN) process. This process is designed to ensure that the proposed project is in the public interest, considering factors like economic feasibility, environmental impact, and reliability of service. The NCUC’s authority is primarily derived from North Carolina General Statutes, particularly Chapter 132 (Public Records), Chapter 62 (Public Utilities), and Chapter 113A (Environmental Policy). Specifically, G.S. 62-110.1 mandates that electric public utilities obtain a CPCN for the construction of electric power generating facilities and transmission lines of 69 kilovolts or more. The application for a CPCN requires detailed information about the project, including its purpose, location, cost, environmental assessment, and alternatives considered. The NCUC then reviews this application, often involving public hearings and input from various stakeholders, including environmental groups and affected landowners. The Commission’s decision must be based on findings that the proposed facility is necessary for the provision of reasonably efficient and adequate service, and that it is in the public interest. This involves balancing the utility’s need for infrastructure with the potential impacts on the environment and communities. The authority to approve or deny such projects, and to impose conditions on their construction and operation, is a core function of the NCUC in ensuring the public interest is served by the energy sector.
Incorrect
The North Carolina Utilities Commission (NCUC) has broad authority over public utilities, including the regulation of electric power generation and transmission within the state. When a utility proposes a significant infrastructure project, such as a new transmission line, it must undergo a rigorous Certificate of Public Convenience and Necessity (CPCN) process. This process is designed to ensure that the proposed project is in the public interest, considering factors like economic feasibility, environmental impact, and reliability of service. The NCUC’s authority is primarily derived from North Carolina General Statutes, particularly Chapter 132 (Public Records), Chapter 62 (Public Utilities), and Chapter 113A (Environmental Policy). Specifically, G.S. 62-110.1 mandates that electric public utilities obtain a CPCN for the construction of electric power generating facilities and transmission lines of 69 kilovolts or more. The application for a CPCN requires detailed information about the project, including its purpose, location, cost, environmental assessment, and alternatives considered. The NCUC then reviews this application, often involving public hearings and input from various stakeholders, including environmental groups and affected landowners. The Commission’s decision must be based on findings that the proposed facility is necessary for the provision of reasonably efficient and adequate service, and that it is in the public interest. This involves balancing the utility’s need for infrastructure with the potential impacts on the environment and communities. The authority to approve or deny such projects, and to impose conditions on their construction and operation, is a core function of the NCUC in ensuring the public interest is served by the energy sector.
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Question 21 of 30
21. Question
Consider a regulated electric utility in North Carolina proposing to construct a utility-scale solar photovoltaic facility exceeding 100 megawatts in capacity. Which state regulatory body possesses the primary authority to grant the necessary approval for the project’s siting and construction, ensuring it aligns with the public’s need for reliable and cost-effective energy, while also considering broader environmental and land-use implications within the state’s regulatory framework?
Correct
In North Carolina, the siting of major energy infrastructure, such as large-scale solar farms and wind energy facilities, is primarily governed by the Public Staff of the North Carolina Utilities Commission (NCUC) through its Certificate of Public Convenience and Necessity (CPCN) process, as outlined in North Carolina General Statutes Chapter 62, Article 3. This process requires utilities to demonstrate that a proposed project is necessary and in the public interest, considering factors like reliability, cost, environmental impact, and land use. While local governments have zoning and land use authority, the NCUC’s CPCN process often preempts or significantly influences local decisions for projects under the NCUC’s jurisdiction, particularly those undertaken by regulated utilities. The Coastal Area Management Act (CAMA) also plays a role in siting projects in designated Areas of Environmental Concern (AECs) along the coast, requiring permits from the Division of Coastal Management. However, the question focuses on the overarching regulatory framework for utility-scale energy projects generally, where the NCUC’s authority is paramount for ensuring public convenience and necessity, including the review of economic feasibility and environmental considerations before construction can commence. The North Carolina Department of Environmental Quality (NCDEQ) also issues environmental permits for air and water quality, but these are typically secondary to the primary siting approval.
Incorrect
In North Carolina, the siting of major energy infrastructure, such as large-scale solar farms and wind energy facilities, is primarily governed by the Public Staff of the North Carolina Utilities Commission (NCUC) through its Certificate of Public Convenience and Necessity (CPCN) process, as outlined in North Carolina General Statutes Chapter 62, Article 3. This process requires utilities to demonstrate that a proposed project is necessary and in the public interest, considering factors like reliability, cost, environmental impact, and land use. While local governments have zoning and land use authority, the NCUC’s CPCN process often preempts or significantly influences local decisions for projects under the NCUC’s jurisdiction, particularly those undertaken by regulated utilities. The Coastal Area Management Act (CAMA) also plays a role in siting projects in designated Areas of Environmental Concern (AECs) along the coast, requiring permits from the Division of Coastal Management. However, the question focuses on the overarching regulatory framework for utility-scale energy projects generally, where the NCUC’s authority is paramount for ensuring public convenience and necessity, including the review of economic feasibility and environmental considerations before construction can commence. The North Carolina Department of Environmental Quality (NCDEQ) also issues environmental permits for air and water quality, but these are typically secondary to the primary siting approval.
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Question 22 of 30
22. Question
Consider a scenario where a major electric utility operating in North Carolina is developing its compliance strategy for the Renewable Energy and Energy Efficiency Portfolio Standard (REPS) for the upcoming compliance year. The utility has a portfolio of existing generation assets and is evaluating new investments and procurement options. Based on the historical progression and intent of North Carolina’s REPS, what is the most likely primary regulatory mechanism the utility will focus on to meet its mandated percentage of retail electricity sales from qualifying renewable energy sources and energy efficiency programs?
Correct
North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS), established by Session Law 2007-397 (House Bill 1077) and later amended, mandates that utilities procure a certain percentage of their electricity from renewable energy sources and energy efficiency measures. The law sets specific targets for compliance years, increasing over time. For instance, by 2018, utilities were required to source 10% of their retail sales from qualifying sources. The REPS is a crucial mechanism for driving renewable energy development and energy efficiency improvements within the state. Utilities can meet these requirements through various means, including direct investment in renewable energy projects, purchasing renewable energy certificates (RECs), or entering into power purchase agreements (PPAs) with renewable energy generators. The North Carolina Utilities Commission (NCUC) oversees the implementation and enforcement of the REPS, including approving compliance plans and monitoring utility performance. Understanding the specific percentage requirements for different compliance periods and the eligible technologies is fundamental to grasping the practical application of this law. The law also includes provisions for exemptions and alternative compliance mechanisms, which add layers of complexity for advanced study.
Incorrect
North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS), established by Session Law 2007-397 (House Bill 1077) and later amended, mandates that utilities procure a certain percentage of their electricity from renewable energy sources and energy efficiency measures. The law sets specific targets for compliance years, increasing over time. For instance, by 2018, utilities were required to source 10% of their retail sales from qualifying sources. The REPS is a crucial mechanism for driving renewable energy development and energy efficiency improvements within the state. Utilities can meet these requirements through various means, including direct investment in renewable energy projects, purchasing renewable energy certificates (RECs), or entering into power purchase agreements (PPAs) with renewable energy generators. The North Carolina Utilities Commission (NCUC) oversees the implementation and enforcement of the REPS, including approving compliance plans and monitoring utility performance. Understanding the specific percentage requirements for different compliance periods and the eligible technologies is fundamental to grasping the practical application of this law. The law also includes provisions for exemptions and alternative compliance mechanisms, which add layers of complexity for advanced study.
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Question 23 of 30
23. Question
A major electric cooperative in North Carolina proposes to build a new combined-cycle natural gas power plant to replace aging coal-fired generation. The cooperative files an application with the North Carolina Utilities Commission (NCUC) seeking a Certificate of Public Convenience and Necessity (CPCN). During the NCUC proceedings, the Public Staff presents an analysis suggesting that a distributed solar and battery storage portfolio, procured through competitive bidding, could meet the projected energy needs at a lower long-term cost and with greater environmental benefits. Which of the following principles most accurately reflects the NCUC’s primary consideration when evaluating the cooperative’s CPCN application in light of the Public Staff’s alternative proposal?
Correct
The North Carolina Utilities Commission (NCUC) has the authority to regulate public utilities, including those involved in energy generation and distribution. When a utility proposes to construct new generation facilities, it must demonstrate that the proposed facility is in the public interest and meets specific statutory and regulatory requirements. This often involves a Certificate of Public Convenience and Necessity (CPCN). The Public Staff of the NCUC plays a crucial role in representing the interests of the public in these proceedings, conducting independent analysis, and making recommendations to the Commission. Key considerations for the NCUC in approving such a project include the reliability of the energy supply, the cost-effectiveness of the facility, its environmental impact, and the overall impact on North Carolina ratepayers. The Commission’s decision-making process is guided by statutes like Chapter 62 of the North Carolina General Statutes, which outlines the powers and duties of the NCUC. The process requires extensive evidentiary hearings, expert testimony, and detailed analysis of the utility’s proposal and any alternatives.
Incorrect
The North Carolina Utilities Commission (NCUC) has the authority to regulate public utilities, including those involved in energy generation and distribution. When a utility proposes to construct new generation facilities, it must demonstrate that the proposed facility is in the public interest and meets specific statutory and regulatory requirements. This often involves a Certificate of Public Convenience and Necessity (CPCN). The Public Staff of the NCUC plays a crucial role in representing the interests of the public in these proceedings, conducting independent analysis, and making recommendations to the Commission. Key considerations for the NCUC in approving such a project include the reliability of the energy supply, the cost-effectiveness of the facility, its environmental impact, and the overall impact on North Carolina ratepayers. The Commission’s decision-making process is guided by statutes like Chapter 62 of the North Carolina General Statutes, which outlines the powers and duties of the NCUC. The process requires extensive evidentiary hearings, expert testimony, and detailed analysis of the utility’s proposal and any alternatives.
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Question 24 of 30
24. Question
Consider a proposed offshore wind energy project intended to supply electricity to North Carolina consumers. Following federal authorization for seabed leasing and initial environmental impact assessments by the Bureau of Ocean Energy Management (BOEM), the project developer, a North Carolina-regulated electric utility, seeks to connect the generated power to the state’s transmission grid. Which state regulatory body in North Carolina holds the primary authority to approve the necessary transmission infrastructure upgrades and the siting of the onshore interconnection facilities, thereby allowing the utility to integrate this renewable energy source into its service territory?
Correct
The question concerns the regulatory framework for offshore wind energy development in North Carolina, specifically focusing on the role of the North Carolina Utilities Commission (NCUC) in permitting and siting. The Energy Policy Act of 2005, as amended, and subsequent federal actions have established a process for leasing and permitting offshore energy projects. In North Carolina, the NCUC has a crucial role in reviewing and approving projects that impact the state’s energy infrastructure and consumer interests. This includes evaluating the economic feasibility, environmental impact, and public interest aspects of such projects. Specifically, the NCUC’s authority is exercised through its oversight of utilities operating within the state and its mandate to ensure reliable and affordable energy. When a utility proposes to connect an offshore wind farm to the state’s grid, or when the project’s siting has significant implications for the state’s energy supply and demand, the NCUC’s approval is typically required under North Carolina General Statutes, such as Chapter 62. This involves a comprehensive review process that considers factors like transmission infrastructure needs, grid reliability, rate impacts on consumers, and the state’s renewable energy portfolio standards. The NCUC’s jurisdiction is primarily concerned with the in-state aspects of the project, including the interconnection and the provision of electricity to North Carolina consumers. Federal agencies, such as the Bureau of Ocean Energy Management (BOEM), handle the leasing of submerged lands and the initial environmental review of the offshore site itself. However, once the project is ready for construction and operation, and particularly concerning its integration into the state’s energy system, the NCUC’s regulatory authority becomes paramount. Therefore, the NCUC’s approval is a necessary step for a utility to proceed with the development and operation of an offshore wind farm that will serve North Carolina customers.
Incorrect
The question concerns the regulatory framework for offshore wind energy development in North Carolina, specifically focusing on the role of the North Carolina Utilities Commission (NCUC) in permitting and siting. The Energy Policy Act of 2005, as amended, and subsequent federal actions have established a process for leasing and permitting offshore energy projects. In North Carolina, the NCUC has a crucial role in reviewing and approving projects that impact the state’s energy infrastructure and consumer interests. This includes evaluating the economic feasibility, environmental impact, and public interest aspects of such projects. Specifically, the NCUC’s authority is exercised through its oversight of utilities operating within the state and its mandate to ensure reliable and affordable energy. When a utility proposes to connect an offshore wind farm to the state’s grid, or when the project’s siting has significant implications for the state’s energy supply and demand, the NCUC’s approval is typically required under North Carolina General Statutes, such as Chapter 62. This involves a comprehensive review process that considers factors like transmission infrastructure needs, grid reliability, rate impacts on consumers, and the state’s renewable energy portfolio standards. The NCUC’s jurisdiction is primarily concerned with the in-state aspects of the project, including the interconnection and the provision of electricity to North Carolina consumers. Federal agencies, such as the Bureau of Ocean Energy Management (BOEM), handle the leasing of submerged lands and the initial environmental review of the offshore site itself. However, once the project is ready for construction and operation, and particularly concerning its integration into the state’s energy system, the NCUC’s regulatory authority becomes paramount. Therefore, the NCUC’s approval is a necessary step for a utility to proceed with the development and operation of an offshore wind farm that will serve North Carolina customers.
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Question 25 of 30
25. Question
Consider a scenario where a major electric utility operating within North Carolina proposes a substantial investment in a new natural gas-fired power generation facility as part of its updated integrated resource plan (IRP). The Public Staff of the North Carolina Utilities Commission, tasked with providing expert analysis, has raised concerns that alternative renewable energy portfolios, coupled with enhanced energy efficiency programs, could meet projected demand at a comparable or lower long-term cost, while also yielding greater environmental benefits. Under North Carolina energy law, what is the primary legal and regulatory standard the North Carolina Utilities Commission will apply when evaluating the utility’s proposed investment against the Public Staff’s alternative recommendations?
Correct
The North Carolina Utilities Commission (NCUC) has a significant role in regulating public utilities, including those involved in energy generation and distribution. The Public Staff of the NCUC provides expert advice and analysis to the Commission. When a utility proposes a significant change in its rates or services, such as the construction of a new power plant or a major transmission line upgrade, the NCUC must approve it. This approval process often involves a formal hearing where the utility presents its case, and the Public Staff, along with other intervenors, can present evidence and arguments. The Commission’s decision is based on whether the proposed action is in the public interest, considering factors like reliability, affordability, and environmental impact, as guided by North Carolina General Statutes, particularly Chapter 62. The concept of “least-cost planning” is a crucial element in these deliberations, requiring utilities to demonstrate that their proposed investments represent the most cost-effective way to meet future energy demands while considering all relevant costs and benefits, including environmental externalities and long-term operational efficiencies. A utility’s integrated resource plan (IRP) is a key document submitted to the NCUC that outlines its strategy for meeting future energy needs and serves as the basis for many of these regulatory decisions. The NCUC’s authority extends to approving or denying these plans and the specific projects within them.
Incorrect
The North Carolina Utilities Commission (NCUC) has a significant role in regulating public utilities, including those involved in energy generation and distribution. The Public Staff of the NCUC provides expert advice and analysis to the Commission. When a utility proposes a significant change in its rates or services, such as the construction of a new power plant or a major transmission line upgrade, the NCUC must approve it. This approval process often involves a formal hearing where the utility presents its case, and the Public Staff, along with other intervenors, can present evidence and arguments. The Commission’s decision is based on whether the proposed action is in the public interest, considering factors like reliability, affordability, and environmental impact, as guided by North Carolina General Statutes, particularly Chapter 62. The concept of “least-cost planning” is a crucial element in these deliberations, requiring utilities to demonstrate that their proposed investments represent the most cost-effective way to meet future energy demands while considering all relevant costs and benefits, including environmental externalities and long-term operational efficiencies. A utility’s integrated resource plan (IRP) is a key document submitted to the NCUC that outlines its strategy for meeting future energy needs and serves as the basis for many of these regulatory decisions. The NCUC’s authority extends to approving or denying these plans and the specific projects within them.
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Question 26 of 30
26. Question
Consider a North Carolina electric cooperative seeking approval from the North Carolina Utilities Commission to construct a new 300-megawatt solar photovoltaic facility. The cooperative has presented a plan that they assert represents the least cost alternative for meeting projected load growth over the next decade, citing the declining costs of solar technology and available federal tax credits. What critical regulatory hurdle must the cooperative successfully navigate with the NCUC to legally proceed with the construction and operation of this facility, as stipulated by North Carolina energy law?
Correct
The North Carolina Utilities Commission (NCUC) plays a pivotal role in regulating public utilities within the state, including electric power generation and distribution. When a utility proposes a significant change in its rate structure or service territory, it must file an application with the NCUC. This application is subject to a formal hearing process, often involving extensive discovery, expert testimony, and public comment. The NCUC’s decision-making authority is derived from North Carolina General Statutes, particularly Chapter 62, which governs public utilities. The Commission’s mandate is to ensure that rates are just and reasonable and that service is adequate and reliable, balancing the interests of consumers and utility providers. The process for approving new power generation facilities, such as solar farms or wind turbines, also falls under the NCUC’s purview, requiring a Certificate of Public Convenience and Necessity (CPCN) in many instances, as outlined in NCGS § 62-110.1. This certificate ensures that the proposed facility is needed and will be constructed and operated in a manner that serves the public interest. The concept of “least cost planning” is also a significant consideration, requiring utilities to demonstrate that their proposed investments represent the most economical means of meeting future energy demand, often involving the consideration of various energy sources and technologies.
Incorrect
The North Carolina Utilities Commission (NCUC) plays a pivotal role in regulating public utilities within the state, including electric power generation and distribution. When a utility proposes a significant change in its rate structure or service territory, it must file an application with the NCUC. This application is subject to a formal hearing process, often involving extensive discovery, expert testimony, and public comment. The NCUC’s decision-making authority is derived from North Carolina General Statutes, particularly Chapter 62, which governs public utilities. The Commission’s mandate is to ensure that rates are just and reasonable and that service is adequate and reliable, balancing the interests of consumers and utility providers. The process for approving new power generation facilities, such as solar farms or wind turbines, also falls under the NCUC’s purview, requiring a Certificate of Public Convenience and Necessity (CPCN) in many instances, as outlined in NCGS § 62-110.1. This certificate ensures that the proposed facility is needed and will be constructed and operated in a manner that serves the public interest. The concept of “least cost planning” is also a significant consideration, requiring utilities to demonstrate that their proposed investments represent the most economical means of meeting future energy demand, often involving the consideration of various energy sources and technologies.
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Question 27 of 30
27. Question
Coastal Power Solutions, a regulated electric public utility operating within North Carolina, proposes to construct a novel offshore wind energy generation facility. This project represents a substantial capital investment and a significant shift in the state’s energy portfolio. To legally commence the construction and subsequent operation of this new facility, which primary regulatory authorization must Coastal Power Solutions obtain from the North Carolina state government?
Correct
The North Carolina Utilities Commission (NCUC) has broad authority over public utilities, including those involved in electricity generation and transmission. When a utility proposes a significant capital expenditure, such as the construction of a new power generation facility, it typically requires a Certificate of Public Convenience and Necessity (CPCN) under North Carolina General Statute §62-81. This statute mandates that no public utility shall begin the construction or operation of any public utility plant or any extension thereof without first obtaining a CPCN from the Commission. The purpose of the CPCN process is to ensure that proposed projects are in the public interest, considering factors such as reliability, cost-effectiveness, environmental impact, and the overall needs of the state’s energy consumers. The NCUC conducts a thorough review, which often involves public hearings, expert testimony, and consideration of alternative proposals. Failure to obtain a CPCN can result in penalties and the inability to recover the costs of the unauthorized project. Therefore, for a utility like “Coastal Power Solutions” to proceed with building a new offshore wind farm, securing a CPCN from the NCUC is a mandatory and foundational legal step. Other regulatory approvals may be necessary, but the CPCN addresses the fundamental authorization for the project’s existence and operation as a public utility undertaking within North Carolina.
Incorrect
The North Carolina Utilities Commission (NCUC) has broad authority over public utilities, including those involved in electricity generation and transmission. When a utility proposes a significant capital expenditure, such as the construction of a new power generation facility, it typically requires a Certificate of Public Convenience and Necessity (CPCN) under North Carolina General Statute §62-81. This statute mandates that no public utility shall begin the construction or operation of any public utility plant or any extension thereof without first obtaining a CPCN from the Commission. The purpose of the CPCN process is to ensure that proposed projects are in the public interest, considering factors such as reliability, cost-effectiveness, environmental impact, and the overall needs of the state’s energy consumers. The NCUC conducts a thorough review, which often involves public hearings, expert testimony, and consideration of alternative proposals. Failure to obtain a CPCN can result in penalties and the inability to recover the costs of the unauthorized project. Therefore, for a utility like “Coastal Power Solutions” to proceed with building a new offshore wind farm, securing a CPCN from the NCUC is a mandatory and foundational legal step. Other regulatory approvals may be necessary, but the CPCN addresses the fundamental authorization for the project’s existence and operation as a public utility undertaking within North Carolina.
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Question 28 of 30
28. Question
Consider a scenario where a major electric utility operating within North Carolina proposes a significant upward adjustment to its base rates, citing the need to recover costs associated with a newly constructed utility-scale solar farm and associated transmission upgrades. The utility’s filing includes detailed financial projections and an analysis of its capital expenditures. During the North Carolina Utilities Commission’s review process, what is the primary legal and regulatory basis for the commission’s decision to approve, deny, or modify the proposed rate adjustment?
Correct
The North Carolina Utilities Commission (NCUC) has a statutory mandate to ensure that public utilities provide safe, reliable, and adequate service at just and reasonable rates. This includes the authority to approve or deny rate increases and to set standards for service quality. When a utility proposes a change in its rate structure or seeks to recover costs associated with new infrastructure, such as renewable energy projects or grid modernization, the NCUC conducts a formal rate case proceeding. This process typically involves extensive discovery, expert testimony, public hearings, and detailed financial analysis. The commission’s decision must be supported by evidence presented during the proceeding and must align with the public interest and the statutory objectives of utility regulation in North Carolina. Specifically, the commission considers factors such as the utility’s cost of service, the reasonableness of its operating expenses, the capital investment required, and the impact on consumers. The commission also has the authority to implement performance-based ratemaking mechanisms or to require specific investments if they are deemed in the public interest, even if not explicitly proposed by the utility. The ultimate goal is to balance the financial health of the utility with the affordability and quality of service for North Carolina’s ratepayers.
Incorrect
The North Carolina Utilities Commission (NCUC) has a statutory mandate to ensure that public utilities provide safe, reliable, and adequate service at just and reasonable rates. This includes the authority to approve or deny rate increases and to set standards for service quality. When a utility proposes a change in its rate structure or seeks to recover costs associated with new infrastructure, such as renewable energy projects or grid modernization, the NCUC conducts a formal rate case proceeding. This process typically involves extensive discovery, expert testimony, public hearings, and detailed financial analysis. The commission’s decision must be supported by evidence presented during the proceeding and must align with the public interest and the statutory objectives of utility regulation in North Carolina. Specifically, the commission considers factors such as the utility’s cost of service, the reasonableness of its operating expenses, the capital investment required, and the impact on consumers. The commission also has the authority to implement performance-based ratemaking mechanisms or to require specific investments if they are deemed in the public interest, even if not explicitly proposed by the utility. The ultimate goal is to balance the financial health of the utility with the affordability and quality of service for North Carolina’s ratepayers.
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Question 29 of 30
29. Question
Consider a North Carolina electric cooperative, Piedmont Power, which proposes to implement a new demand-response program designed to incentivize large industrial customers to reduce their electricity consumption during peak hours. To recover the program’s administrative and incentive costs, Piedmont Power files a petition with the North Carolina Utilities Commission. Which of the following best describes the regulatory mechanism Piedmont Power must navigate to gain approval for these cost recovery measures?
Correct
The North Carolina Utilities Commission (NCUC) oversees the regulation of public utilities in the state. When a utility proposes a significant change in its rate structure or seeks to recover costs associated with a new energy project, it must file a petition with the NCUC. This petition triggers a formal rate case proceeding. The NCUC then conducts a thorough review, which includes analyzing the utility’s proposed rates, operating costs, and capital investments. Public hearings are often held to allow consumer groups, intervenors, and the general public to voice their concerns and present evidence. The Commission’s decision is based on ensuring that rates are just and reasonable, allowing the utility to earn a fair rate of return while protecting consumers from excessive charges. This process is governed by statutes such as the North Carolina Public Utilities Act. The Commission’s authority to approve or deny such proposals is a core aspect of its regulatory mandate.
Incorrect
The North Carolina Utilities Commission (NCUC) oversees the regulation of public utilities in the state. When a utility proposes a significant change in its rate structure or seeks to recover costs associated with a new energy project, it must file a petition with the NCUC. This petition triggers a formal rate case proceeding. The NCUC then conducts a thorough review, which includes analyzing the utility’s proposed rates, operating costs, and capital investments. Public hearings are often held to allow consumer groups, intervenors, and the general public to voice their concerns and present evidence. The Commission’s decision is based on ensuring that rates are just and reasonable, allowing the utility to earn a fair rate of return while protecting consumers from excessive charges. This process is governed by statutes such as the North Carolina Public Utilities Act. The Commission’s authority to approve or deny such proposals is a core aspect of its regulatory mandate.
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Question 30 of 30
30. Question
Consider a scenario where a new cooperative of solar energy producers in rural North Carolina seeks to interconnect multiple distributed generation facilities to the state’s electricity grid. They are concerned about the procedural fairness and technical adequacy of the interconnection standards proposed by the state’s investor-owned utility. Which governmental body within North Carolina’s energy regulatory structure is primarily tasked with the detailed development and recommendation of these technical interconnection standards, subject to final approval by the state’s chief energy regulatory authority, to ensure compliance with state statutes like those governing small power production and cogeneration?
Correct
The question pertains to the regulatory framework governing distributed generation in North Carolina, specifically concerning interconnection standards and potential impact on the grid. North Carolina General Statute §62-164 outlines provisions for small power production and cogeneration facilities. The Public Staff of the North Carolina Utilities Commission plays a crucial role in developing and recommending rules and standards for interconnection. Rulemaking proceedings, such as those addressing interconnection standards for customer-owned generation, are conducted under the authority of the Utilities Commission. These proceedings involve public notice, comment periods, and potential hearings to ensure all stakeholders, including utilities, generators, and consumer advocates, have an opportunity to participate. The Commission ultimately approves or modifies proposed standards. The interaction between the General Assembly, the Utilities Commission, and the Public Staff is central to establishing and enforcing these energy regulations. The concept of “net metering” is often a component of these regulations, allowing customers to receive credit for excess electricity sent back to the grid, though the specifics of its implementation and any associated caps or limitations are subject to Commission rulemaking. The question probes the understanding of which entity is primarily responsible for the detailed procedural development and recommendation of such technical standards, which is the Public Staff, subject to Commission approval.
Incorrect
The question pertains to the regulatory framework governing distributed generation in North Carolina, specifically concerning interconnection standards and potential impact on the grid. North Carolina General Statute §62-164 outlines provisions for small power production and cogeneration facilities. The Public Staff of the North Carolina Utilities Commission plays a crucial role in developing and recommending rules and standards for interconnection. Rulemaking proceedings, such as those addressing interconnection standards for customer-owned generation, are conducted under the authority of the Utilities Commission. These proceedings involve public notice, comment periods, and potential hearings to ensure all stakeholders, including utilities, generators, and consumer advocates, have an opportunity to participate. The Commission ultimately approves or modifies proposed standards. The interaction between the General Assembly, the Utilities Commission, and the Public Staff is central to establishing and enforcing these energy regulations. The concept of “net metering” is often a component of these regulations, allowing customers to receive credit for excess electricity sent back to the grid, though the specifics of its implementation and any associated caps or limitations are subject to Commission rulemaking. The question probes the understanding of which entity is primarily responsible for the detailed procedural development and recommendation of such technical standards, which is the Public Staff, subject to Commission approval.