The North Carolina Utilities Commission on July 16 issued an order giving parties to a power purchase agreement (PPA) dispute over a potentially chicken-waste-fired power plant until Aug. 6 to try and resolve their issues, or an arbitrator will likely be appointed.
On July 8, Coastal Carolina Clean Power LLC (CCCP), filed a complaint, request for interim relief and request for arbitration against Duke Energy Progress, Duke Energy Carolinas LLC, Virginia Electric and Power d/b/a Dominion North Carolina Power, Public Works Commission of the City of Fayetteville, GreenCo Solutions Inc., Energy United Electric Membership Corp. d/b/a Energy United, and Halifax Electric Membership Corp. (they are collectively called the “RFP Group”).
CCCP stated that it owns and operates a 32-MW, woody-biomass-fueled facility located in Kenansville, N.C. CCCP said that it presently provides energy, capacity and biomass renewable energy certificates (RECs) to Duke Energy Progress under a renewable PPA that expires on Dec. 31, 2014.
CCCP in 2013 tested its facility and determined that it can be fueled with a significant amount of poultry waste mixed in with the woody biomass, and, as a result, the facility has the potential to generate in excess of 50,000 poultry RECs per year. However, this change in fuel mix will require CCCP to make significant capital improvements to the facility.
CCCP further states that during the last year it has submitted proposals to furnish energy, capacity and biomass RECs and poultry RECs to Duke Energy Progress. In addition, CCCP submitted proposals in response to the RFP Group’s Joint Poultry RFP to provide energy, capacity and biomass and poultry RECs to Duke Energy Progress, and biomass and poultry RECs to members of the RFP Group.
North Carolina is a major producer of chickens and hogs at large farming operations, giving rise to a desire to get rid of the massive amount of fecal waste from those operations in a useful way.
CCCP stated that although there have been some discussions with the members of the RFP Group, no member has offered CCCP a PPA that includes terms that CCCP considers reasonable and supportive of the continued operation of CCCP’s facility.
Coastal Carolina Power alleges that the members of the RFP Group have failed to offer it a PPA with reasonable rates and prices as required by the Public Utility Regulatory Policies Act (PURPA) and the commission’s directive that “Electric power suppliers should continue to make efforts to purchase any reasonably-priced poultry and swine waste RECs available in order to support the construction and operation of poultry and swine waste generation facilities and to fulfill requirements pursuant to this Order.”
CCCP also maintained that the near-term expiration of its existing PPA with Duke Energy Progress and the failure of Duke Energy Progress and the RFP Group to offer reasonable rates and prices for a new PPA create an imminent threat to the continued operation of CCCP’s facility.
The commission on July 16 directed that the members of the RFP Group need to either satisfy the demands of CCCP and so advise the commission, or file a response to CCCP’s complaint on or before Aug. 6. The commission will proceed as appropriate after the members of the RFP Group make their filings. Appointment of an arbitrator would be the likely path if this issue can’t be resolved in the near term.
The complaint noted that this plant was originally built by Cogentrix as a coal-fired facility, with a later fuel switch to biomass.