State and Local Policy Database

North Carolina

State Scorecard Rank

31

North Carolina

14.5Scored out of 50Updated 9/2016
State Government
Score: 4 out of 6
State Government Summary List All

North Carolina offers financial incentives for energy efficiency, although several were discontinued recently. The state government leads by example by requiring efficient buildings and fleets, benchmarking energy use in public buildings, and encouraging the use of energy savings performance contracts. Researched focused on energy efficiency takes place at several institutions in the state.

Financial Incentives List All

Financial incentive information for North Carolina is provided by the Database of State Incentives for Renewables and Efficiency (DSIRE North Carolina). The state does enable Property Assessed Clean Energy Financing (PACE), but it does not have any active PACE programs.

Last Updated: July 2017

Building Energy Disclosure List All

There is no disclosure policy in place.

Last Updated: July 2017

Public Building Requirements List All

Senate Bill 668 and Senate Bill 1946 require state-owned buildings to be designed, constructed and certified to exceed the energy efficiency requirements of ASHRAE 90.1-2004 by 30% for new buildings, and 20% for major renovations. The energy consumption per gross square foot for all state buildings in total must also be reduced by 20% by 2010, and 30% by 2015 based on consumption during the 2003-2004 fiscal year.  The North Carolina State Energy Office collects annual consumption and cost data per statute below for state agencies, UNC and community colleges. 

The Utility Savings Initiative (USI) is the state’s overarching program for public building energy efficiency. § 143 64.12 requires the State agencies and State institutions of higher learning to develop a management plan that is consistent with the State’s comprehensive program to manage energy, water, and other utility use. Each state agency and state institution of higher learning shall update its management plan annually and include strategies for supporting the energy consumption reduction requirements under this subsection. Each community college shall submit to the State Energy Office an annual written report of utility consumption and costs. In 2017 the North Carolina General Assembly scaled back funding for the USI as well as other Department of Environmental Quality programs.

North Carolina participates in the US Department of Energy’s Better Buildings Challenge. The entire existing building stock, which included all agency and UNC buildings, was committed to the challenge which sets a goal of reducing energy consumption by 20% by 2020 from a 2008-09 baseline.

Last Updated: August 2017

Fleets List All

The North Carolina Department of Administration must give purchase preference to new state vehicles with fuel economy ratings that rank among the top 15% of comparable vehicles in their class. 

A Fiscal Year 04-05 “special budget provision” required a 20% reduction (adjusted to 17.5 based on provision criteria) in petroleum use by the state vehicle fleet. The 2011 NC General Assembly extended this Petroleum Displacement Plan (PDP) requirement through FY 2016, allowing for a more robust comparison and foundation for petroleum reduction planning.

The State and Alternative Fuel Provider Fleet Program requires covered fleets to either acquire alternative fuel vehicles (AFV) as a percentage of their annual light-duty vehicle acquisitions or to employ other petroleum-reduction methods in lieu of acquiring AFVs. DOE established these requirements through 10 CFR Part 490.

Last Updated: July 2017

Energy Savings Performance Contracting List All

North Carolina’s utilities have an energy savings strategic plan that relies significantly on ESPCs. Their annual report(s) demonstrate the recent use of such contracting. State Statutes recommend that state entities use guaranteed energy savings contracts when feasible and practical. Additionally, the North Carolina Department of Commerce helps to administer ESPCs to schools, universities, and state & municipal government buildings.  The State Energy Office provides a guide to ESPCs, maintains a list of prequalified ESCOs, lays out the process, and provides some model documents. In addition, the engineers and architects assigned to the program are available for onsite technical assistance in the preparation of RFP and contract documents as well as review of RFP responses and final documents.

In 2015 the state invested just under $274 million in performance contracts with state agencies and universities.

Last Updated: July 2017

Research & Development List All

The North Carolina Solar Center focuses on energy efficiency to assist commercial and industrial clients in saving energy. This team operates multiple programs focusing on combined heat and power (CHP) technology in the Southeast. The Center also operates the Database of State Incentives for Renewables & Efficiency (DSIRE).

The Center for Energy Research and Technology (CERT) at North Carolina A&T State University conducts research on reducing energy and water consumption and promoting sustainable energy design practices. The Center is currently focused on creating an energy efficient, environmentally responsible society by promoting and developing carbon dioxide emissions reduction, energy independence, and net-zero energy and sustainable design practices. The center was founded in 1984, and receives funding from the city of Greensboro and the North Carolina Department of Commerce.

Appalachian State University’s Energy Center, housed within the College of Graduate Studies and Research, is an applied research and public service program through which the university makes its resources, faculty and professional staff available to address economic, business, government and social issues and problems related to renewable energy policy, technology and development.

Last Updated: July 2017

Buildings
Score: 4 out of 8
Buildings Summary List All

Residential and commercial buildings must comply with the 2009 IECC with strengthening amendments. The state offers code training and outreach.

Residential Codes List All

The 2012 North Carolina Energy Conservation Code (NCECC) is mandatory statewide for residential buildings. The residential code is based on the 2009 IECC with substantial strengthening amendments.

Last Updated: August 2017

Commercial Code List All

The 2012 North Carolina Energy Conservation Code (NCECC) is mandatory statewide for commercial buildings. The commercial code is based on the 2009 IECC, with substantial strengthening amendments and also references ASHRAE 90.1-2010.

Last Updated: August 2017

Compliance List All
  • Gap Analysis/Strategic Compliance Plan: NA
  • Baseline & Updated Compliance Studies: North Carolina is one of eight states partnering with DOE to participate in a three year residential energy code field study.
  • Utility Involvement: NA
  • Stakeholder Advisory Group: NA
  • Training/Outreach: The Engineering Division of the NC Department of Insurance regularly conducts code trainings and they have energy conservation code training modules available on their website.

Last Updated: July 2017

CHP
Score: 1 out of 4
CHP Summary List All

The state offers incentives for CHP projects, has an interconnection standard that applies to CHP, and includes CHP as an eligible resource within its renewable portfolio standard. One new CHP installation was completed in 2016.

Interconnection StandardsList All

Policy: North Carolina Utilities Commission Docket No. E-100, Sub 101

Description: Applicable only to investor-owned utilities, the interconnection standards adopted by the North Carolina Utilities Commission as a result of this docket lays out three separate tiers of interconnection, in much the same manner as the FERC standards. Systems over 2MW in size must go through a more extensive study than smaller systems, and application fees scale up in line with system size.

Last Updated: August 2017

Encouraging CHP as a ResourceList All

There are currently no state policies designed to acquire energy savings from CHP (like other efficiency resources) or energy generation from CHP (in terms of kWh production) that apply to all forms of CHP. On August 1, 2017, the North Carolina Court of Appeals issued Decision No. COA16-1067, which found that all CHP, including topping cycle CHP, should be classified as an energy efficiency measure. This was a reversal of an order issued by the NC Utilities Commission in 2016. The new decision in 2017 now unambiguously finds that an entire topping cycle CHP system is an energy efficiency measure. 

Last Updated: August 2017

Deployment IncentivesList All

Incentives, grants, or financing:  In previous years, a Renewable Energy Tax Credit program offered a credit equal to 35% of the cost of eligible CHP systems and other renewable energy property constructed, purchased or leased by a taxpayer and placed into service in North Carolina during the taxable year. This tax credit expired at the end of 2015.

Last Updated: August 2017

Additional Supportive PoliciesList All

Some additional supportive policies exist to encourage CHP in North Carolina. The state’s RPS, which is a part of the Energy Portfolio Standard (EPS) encourages the use of opportunity fuels that may be used to power CHP, which can meet up to 25% of the RPS requirements through 2018.

Last Updated: August 2017

Utilities
Score: 2.5 out of 20
Utilities Summary List All

North Carolina utilities have expanded energy efficiency programs in recent years. However, their levels of investment and performance still remain below the national average. Utility efficiency programs are likely to continue expanding given the recent efforts by utilities and stakeholders.  In 2011, the newly-merged Duke Energy Progress (formed by two operating companies, Duke Energy Carolinas and Progress Energy Carolinas) reached a South Carolina PSC-approved settlement agreement with clean energy groups that, among other things, sets an annual energy efficiency savings target of 1% of retail sales starting in 2015, and a 7% cumulative target from 2014 to 2018.  Achievement of the target will require successful development, regulatory approval and implementation of energy efficiency programs. North Carolina also allows energy efficiency to count toward its statewide renewable and efficiency standard. On February 29, 2008, the North Carolina Utilities Commission (NCUC) issued final rules implementing legislation passed in August 2007 that created North Carolina’s renewable energy and energy efficiency portfolio standard (REPS). The energy efficiency portion of the REPS energy savings targets increased to 0.75% of prior-year sales in 2012, rising to 5% of prior-year sales in 2021.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

For further reading, in March 2010, as part of the State Clean Energy Resource Project, ACEEE completed the report North Carolina's Energy Future: Electricity, Water, and Transportation Efficiency.

Last Updated: July 2017

Customer Energy Efficiency Programs List All

Individual utilities now administer energy efficiency and renewable energy programs in North Carolina with oversight and approval from the North Carolina Utilities Commission (NCUC).  In a 2011 South Carolina PSC-approved settlement agreement brokered between energy efficiency advocates and two merging utilities, Progress Energy Carolinas and Duke Energy Carolinas, the merging utilities agreed to new energy efficiency programs and targets between 2014 and 2018. The Settlement Agreement, signed in December 2011, sets an annual energy efficiency savings target of 1% of retail sales starting in 2015 and a 7% cumulative target from 2014 to 2018 for each utility.  PEC and DEC have operated their respective energy efficiency programs separately, but have started to replicate some programs system-wide. Current cost recovery mechanisms outlined in Docket No. E-7, Sub 1032), Docket No. E-2, Sub 931, and Docket No. E-22, Sub 464 include continuation of these goals. Duke Carolinas and Duke Progress may also earn a $400,000 incentive if they meet a goal of 1% incremental savings target.

Several municipal and cooperative utilities in North Carolina also administer customer energy efficiency programs.

In 2009, the NCUC approved Duke Energy Corp.’s Save-A-Watt program, which established energy efficiency goals and rate recovery for the utility over the past few years.  In August 2007, Session Law 2007-397 (Senate Bill 3) established the state’s first Renewable Energy and Energy Efficiency Portfolio Standard. This sets renewable energy and energy efficiency objectives for utilities. Each utility will submit a REEPS compliance plan to the NCUC, detailing its plans to achieve the required savings. The law applies to investor-owned, municipal and cooperative utilities.

Natural gas efficiency programs in the residential, residential low-income, and commercial sectors are delivered by the utilities, North Carolina State Energy Office, and the Department of Health and Human Services.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

Last Updated: July 2017

Energy Efficiency as a Resource List All

Each electric power supplier must file a REEPS compliance plan as part of its Integrated Resource Planning (IRP) filing on or before September 1 of each year.  The commission reviews the utilities' REEPS compliance reports.

A utility’s IRP filing must include a comprehensive analysis of all resource options considered by the utility.  The plan must also include an assessment of demand-side management and energy efficiency. IRPs must be approved by the commission.

Each electric power supplier must file a REEPS compliance plan as part of its Integrated Resource Planning (IRP) filing on or before September 1 of each year.  The commission reviews the utilities' REEPS compliance reports.

A utility’s IRP filing must include a comprehensive analysis of all resource options considered by the utility.  The plan must also include an assessment of demand-side management and energy efficiency. IRPs must be approved by the commission.

Last Updated: July 2017

Energy Efficiency Resource Standards List All

Summary: Renewable Energy and Energy Efficiency Portfolio Standard (REPS): 12.5% by 2021 and thereafter. Energy efficiency is capped at 25% of the 2012-2018 targets and at 40% of the 2021 target.

North Carolina Senate Bill 3 was finalized in 2008, introducing the state’s combined Renewable Energy and Energy Efficiency Portfolio Standard (REPS).  Under the REPS, public electric utilities in the state must obtain renewable energy power and energy efficiency savings of 3% of prior-year electricity sales in 2012, 6% in 2015, 10% in 2018, and 12.5% in 2021 and thereafter. For IOUs, energy efficiency is capped at 25% of the 2012-2018 targets and at 40% of the 2021 target. Co-operative and municipal utilities may satisfy their all of their REPS requirement of 10% savings by 2018 with energy efficiency, excluding small set-asides for solar and other resources. Utilities demonstrate compliance by procuring renewable energy credits (RECs) earned after January 1, 2008. Under North Carolina Utility Commission rules, an REC is equivalent to 1 MWh of electricity generated by a renewable energy facility or avoided through an efficiency measure.

Since the REPS goals are cumulative, the 12.5% target in 2021 will require 5% of its sales in 2021 to be met with energy efficiency over the entire 13-year period in which energy efficiency savings may be counted. Averaged over three years, each target period until 2018 requires yearly incremental savings of 0.25%. The final period from 2018 to 2020 will allow yearly incremental energy savings of 0.83%. Utilities plan to employ more than the full quarter allowable over the next ten years. Industrial customers may opt-out of utility energy efficiency programs and not bear the costs of new programs if they implement their own programs. 

Each electric power supplier must file a REPS compliance plan for Commission review as part of its Integrated Resource Planning (IRP) filing on or before September 1 of each year.  A utility’s IRP filing must include a comprehensive analysis of all resource options considered by the utility, including demand-side management and energy efficiency, which must result in “the least cost mix of generation and demand reduction measures achievable….”(N.C. Gen. Stat. §62-2(3a)). According to Commission Rule R8-60, IRP filings must include a 15-year forecast of demand-side resources, among other requirements for the assessment and characterization of the demand-side resource.

North Carolina has no natural gas EERS.

Last Updated: July 2017

Utility Business Model List All

Rate-regulated utilities may seek to recover the costs for energy efficiency programs through a Demand Side Management/Energy Efficiency rate rider. Statute also allows the Commission to approve incentives for public utilities adopting and implementing new programs. 

Duke Energy Carolinas received approval of a new cost recovery mechanism (Docket No. E-7, Sub 1032) in October 2013.  The new mechanism is a shared savings model providing recovery of program costs, lost revenues (up to 36 months), and a 11.5% portfolio performance incentive.  Duke Energy Progress was granted a new recovery mechanism in January 2015 (Docket No. E-2, Sub 931 - Order dated January 20, 2015), also with a shared savings model for recovery of program costs, up to 36 months of net lost revenues, and a bonus incentive of 11.75% on a shared savings model.  Dominion recieved approval of a revised cost recovery mechanism ( May 7, 2015 in Docket No. E-22, Sub 464) that provides for program cost recovery, up to 36 months of net lost revenues, and a program performance incentive (8% for DSM programs and 13% for EE programs).

In the natural gas sector, Piedmont Natural Gas and Public Service Company of North Carolina both have revenue-per-customer decoupling with semi-annual adjustments. Public Service Company received approval for its program in October 2008. (See Piedmont Natural Gas: Docket Nos. G-9, Sub 499 (November 2005) and G-9, Sub 550 (November 2008); Public Service Company of North Carolina Docket No. G-5, Sub 495 (October 2008); Report of the North Carolina Utilities Commission to the Governor of North Carolina, Environmental Review Commission, and the Joint Legislative Utility Review Committee: Docket E-100, Sub 116 (September 2008).Duke Energy Progress has an incentive mechanism in place. The Duke mechanism permits the utility to earn a percentage of avoided costs which are capped as a percentage of actual program costs. The cap ranges from 5-15%. The Progress mechanism allows the utility to earn 8-13% of the net present value of the net savings from DSM programs.

Last Updated: July 2017

Evaluation, Measurement, & Verification List All
  • Cost-effectiveness test(s) used: TRC, UCT, PCT, RIM
  • Uses a deemed savings database: no

The evaluation of ratepayer-funded energy efficiency programs in North Carolina relies on regulatory orders (Rule 8-68 and Rule 8-69). Evaluations are mainly administered by the utilities. There are no specific legal requirements for these evaluations in North Carolina. Evaluations for each of the utilities are conducted. North Carolina uses four of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/Program Administrator (UCT), Participant (PCT), and Ratepayer Impact Measure (RIM). North Carolina specifies the TRC to be its primary test for decision making. The benefit-cost tests are required for portfolio and total program level programs screening. The rules for benefit-cost tests are stated in SB 3—NC GA session law (SL 2007-397)Rule 8-68 and Rule 8-69.

Last Updated: July 2017

Guidelines for Low-Income Energy Efficiency Programs List All

Requirements for State and Utility Support of Low-Income Energy Efficiency Programs

North Carolina Senate Bill 3 was finalized in 2008, introducing the state’s combined Renewable Energy and Energy Efficiency Portfolio Standard (REPS); however the legislation does not address requirements for low-income programs.

Cost-Effectiveness Rules for Low-Income Energy Efficiency Programs

No specific adjustments or exceptions to general cost-effectiveness rules are in place for low-income programs. The rules for benefit-cost tests are stated in SB 3—NC GA session law (SL 2007-397)Rule 8-68, and Rule 8-69. None mention specific cost-effectiveness rules pursuant to low-income programs, however, low-income programs are generally not required to meet cost-effectiveness thresholds.

Coordination of Ratepayer-Funded Low-Income Programs with WAP Services

There is limited coordination between utilities and local community service organizations and state agencies administering weatherization programs.

Last Updated: July 2017

Self Direct and Opt-Out Programs List All

In North Carolina, all industrial class electric customers are eligible for opt-out. By Commission Rule R8-69 (d), large commercial class with 1,000,000 kWhs of annual energy consumption are eligible to opt out. About 40% of eligible load has opted out.

Last Updated: May 2017

Data AccessList All

Guidelines for Third Party Access

There are no provisions in North Carolina that require utilities to release data to third parties. Transfer of data to third parties is prohibited unless the customer provides consent. 

The Commission has requested the utilities to provide more information on the dissemination of customer usage data to third parties in its Order Accepting Smart Grid Technology Plans issued March 29, 2017 in Docket No. E-100 Sub 147.  This information is to be included in their 2017 smart grid technology plans to be filed in the fall of 2017.

Requirements for Provision of Energy Data

The state does not have a policy that requires the provision of energy data. Commission Rule R8-51 requires investor-owned utilities (excludes municipal and cooperative utilities) to provide billing information upon request.  Utilities may charge customers for this information if the request is made more frequently than every 12 months for the same customer and location.  Utilities do have internal policies regarding the customer consent process and distribution of customer meter data.  Those policies may vary.

Energy Use Data Availability 

The state does not have an online standardized system through which access to individual or aggregated energy use data may be requested. 

Last Updated: July 2017

 

 

Transportation
Score: 3 out of 10
Transportation Summary List All

The state has complete streets legislation, a dedicated revenue stream for transit investments,a nd integrates transportation and land-use planning.

Tailpipe Emission Standards List All

No policy in place or proposed.

Last Updated: July 2017

Transportation System Efficiency List All

Transportation and Land use Integration: Senate Bill 897 established the Sustainable Communities Taskforce to encourage the creation of sustainable communities with access to transportation alternatives

VMT Targets: No policy in place or proposed.

Complete Streets: In 2009, the state DOT adopted a complete streets policy. 

FAST Freight Plans and Goals: No freight plan or goals in place. 

Last Updated: July 2017

Transit Funding List All

In 2009 North Carolina passed House Bill 148, which calls for the establishment of a congestion relief and intermodal transportation fund. Criteria for the allocation of funds can be found in the legislation.

Last Updated: July 2017

Incentives for High-Efficiency Vehicles List All

No policy in place or proposed.

Last Updated: July 2017

Equitable Access to TransportationList All
North Carolina does not have any state programs in place to incentivize the creation of low-income housing near transit facilities, nor does it consider the proximity of transit facilities when distributing federal Low-Income Housing Tax Credits to qualifying property owners. Last Updated: July 2017
Appliance Standards
Score: 0 out of 2
Appliance Standards Summary List All

North Carolina has not set appliance standards beyond those required by the federal government.

Last Updated: June 2017