Duke exec: renewable energy regulations needed

GSA Business
October 18, 2013

By Scott Miller

Regulators and utilities should move cautiously toward a plan that incorporates renewable energies, particularly solar power, into the mix of electricity delivered to consumers without raising costs, an executive with Duke Energy said Thursday.

“Getting the rules right, now, allows the economic impacts of solar to spread throughout the Carolinas. No final set of rules is going to make everyone happy, including the utilities, but doing something sooner rather than later is better,” said Lee Mazzocchi, Duke’s senior vice president and chief integration and innovation officer.

Of the utility’s 7 million customers in the Southeast and Midwest, only about 3,000 use solar power, he said.

“Yet in my typical day, solar creeps into every conversation,” he said. “The big reason: solar’s got a ton of momentum behind it.”

Well-known companies are pushing for solar power, Mazzocchi said, naming Walmart, Ikea, BMW Manufacturing and others, including Mandalay Bay Resort and Casino in Las Vegas.

“When the casinos are betting on solar, you better pay attention,” said Mazzocchi, who served as the keynote speaker at Thursday’s Energy Summit in Greenville, dedicating his 20-minute presentation to the push for solar energy.

Growth in the use of solar energy is expected to reach 50% this year nationally, he said.

“A solar panel gets installed every four minutes in this country,” Mazzocchi said.

Increasing the use of solar power will present opportunities for entrepreneurs to innovate new technologies for its generation, delivery and use, he said.

Duke is embracing renewables, Mazzocchi said, investing around $3 billion since 2007 in renewable energy projects, including wind and solar. The push to add solar, however, must be done without affecting electricity costs, Mazzocchi said.

Utilities need to advance the renewable energy conversation with regulators, he said, and adopt new ways to charge for electricity beyond just the kilowatt-hour, ways to price energy products differently.

“The current regulations, mindset and business model were designed for a different era,” Mazzocchi said.

In states with a higher use of renewable energies, customers that do not use solar power subsidize the higher costs for those that do, he said.

He pointed to service disruptions in California, Arizona and Germany related to renewable energy. In Germany, where the use of renewable energy is high, electricity cost is triple what Duke’s South Carolina customers pay, Mazzocchi said.

South Carolina regulators have long resisted the adoption of a renewable energy portfolio standard that other states have used as a way to jump-start the use of renewable energies and the development of related technologies.

North Carolina regulators, for example, adopted a portfolio standard in 2007, calling for investor-owned utilities to meet up to 12.5% of their energy needs through renewable energy resources or energy efficiency measures. Rural electric cooperatives and municipal electric suppliers are subject to a 10% renewable energy requirement in North Carolina.

South Carolina is one of only 13 states without some form of voluntary or mandatory portfolio standard, according to the U.S. Energy Information Administration. The U.S. does not have a federal standard, though efforts have been introduced in Congress.

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