Avoided Costs Rates

Under Section 210 of the Public Utility Regulatory Policies Act of 1978 (PURPA), electric utilities are required to offer to purchase available electric energy from cogeneration and small power production facilities that obtain “qualifying facility” (QF) status. The Federal Energy Regulatory Commission regulations require that the rates electric utilities pay to purchase electric energy and capacity from QFs reflect the cost that the purchasing utility can avoid as a result of obtaining energy and capacity from these sources.

G.S. § 62-156 requires the North Carolina Utilities Commission to biennially determine the rates to be paid by electric utilities for power purchases from small power producers according to certain standards prescribed therein. The approved avoided cost rates are also applied in fuel adjustment riders, Renewable Energy and Energy Efficiency Portfolio Standard riders, demand-side management and energy efficiency riders, Competitive Procurement of Renewable Energy riders, and the approved cost structure underlying the negotiated rates paid to larger QF generators who are not eligible for the standard tariff.

Avoided Cost Proceedings

Note: Table includes all Avoided Cost proceedings and is updated biannually.

Note: Avoided cost rates include both avoided energy and capacity costs.