The North Carolina Court of Appeals has upheld state regulators’ decision against a solar power plant project for North Carolina. Appeals judges accepted regulators’ argument that the plant forced overly expensive upgrades to the state’s power grid.
“North Carolina has made significant progress in generation and employment
alternatives to carbon-emitting fuels,” Judge Lucy Inman wrote for the majority of the three-judge panel. Inman is a Democratic candidate for an open seat on the North Carolina Supreme Court this year.
“We rank fourth in the nation for solar installations, with solar power accounting for nearly eight percent of our state’s electricity,” Inman added. “Our legislature has passed clean energy goals, including a 70% reduction in carbon emissions by 2030 and carbon neutrality by 2050. The southeast region of the state, in particular, has attracted several solar energy installations. But the growing output has strained the region’s existing power grid. A dispute over the cost and timing of the network upgrade gives rise to this appeal. »
New solar power plants require government permission, Inman noted. “Energy powerhouses cannot spring up like many restaurants, fitness centers or dry cleaners, even if consumer demand would support increased supply,” she wrote. “In this way, government regulation influences the energy market.”
An independent energy company called Friesian Holdings applied for a permit from the NC Utilities Commission to build a solar plant and use the existing power grid. “Citing to the cost of upgrading the region’s power grid to accommodate additional transmission, the Commission denied Friesian’s request,” Inman wrote. The Public Utilities Commission made this decision in June 2020.
Friesian’s appeal argued that the ruling “unfairly favors large energy utilities and stifles competition, to the detriment of consumers.”
The Court of Appeals rejected Friesian’s three arguments: that the federal law preempted the action of the Public Utilities Commission, that the commission used an “arbitrary and capricious” cost analysis, and that the commission committed a mistake in deciding that there was no demonstrated need for the new solar plant. .
The power grid upgrade associated with the project would have cost nearly $250 million, according to the court’s opinion. Federal policy would have prompted Duke Energy to pass on those costs in “higher rates charged to its North Carolina wholesale and retail customers.”
“Witnesses of the [Utilities Commission] Public staff testified, and one of Friesian’s witnesses conceded, that the facility would do little to supplement Duke’s solar energy supply during the peak winter season, and that Duke had no previously identified the transmission lines in question as requiring upgrades due to reliability issues. Inman’s opinion continued.
The commission eventually determined that the costs were “unreasonably high”. “[T]he Commission compared the unprecedented scale of modernization costs to
be supported by ratepayers to accommodate Friesian’s proposed facility with the expected output of the facility, and concluded that they were too heavy to be in public convenience,” Inman wrote.
Judge Toby Hampson agreed with Inman’s opinion. Judge Hunter Murphy agreed with the result but wrote separately.
“Although I assumed potential winning arguments for [Friesian] Appellants, such arguments were not made by them and were not incorporated into this adversarial proceeding,” Murphy wrote. “I would not view our opinion today as precluding future litigants from making additional or refined arguments on the issues raised by this case.”
Without a dissent in the case, the North Carolina Supreme Court would have no obligation to appeal.