Duke Energy Gets Green Light on $50 Million Solar Project

Duke Energy said it won a concession from the North CarolinaUtilities Commission Wednesday and would now go forward with the $50million project to install 10 megawatts worth of solar energy systemson the rooftops and grounds homes, malls, warehouse, schools, etc.

"We finally have a solar program!" said Duke spokesman Dave Scanzoni.

The Charlotte, N.C.-based utility has good reason to be pleased. Theproject caused Duke a serious headache when the utilities commissionapproved the project last December but added conditions that wouldlimit the utility’s ability to recover the project’s costs. Thecommission said it imposed the conditions because the proposed cost bythe utility was higher than what could be achieved by an independentpower project developer.

Duke said the decision would force it to violate federal accountingrules governing how it could take advantage of a federal solarinvestment tax credit.

That wasn’t the only setback. The project actually began as a $100million, 20-megawatt proposal announced in June last year. Duke had to cut it in halfafter some of its commercial customers and consumer advocatescriticized the project for being too expensive and unnecessary to meetthe state’s renewable energy mandate

The project is unusual because up until now, utilities havetypically signed power purchase agreements with companies who then bearthe responsibility of constructing, owning and operating the systems.Duke plans to own and operate the systems. Southern California Edisonalso has started a similar project.

On Wednesday, the commission agreed to eliminate a language in itsDecember decision that questioned whether Duke was prudent in decidingto build the project itself when the project could be done at a lessercost, the commission said. That language could’ve penalized Duke later when it seeks to recover costs by raising rates.

Duke will spend the next several months scouting out locations forinstalling the solar energy systems, Scanzoni said. The utility hasn’tdecided whether to hire one or multiple companies to carry out theproject, but it’s more likely to get more than one vendor in order toexperiment with different types of solar technologies, Scanzoni said.  

Installation would start before the end of the year and be completed by the end of 2010, Scanzoni said.

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