On October 10, 2023, the North Carolina General Assembly enacted the Clean Energy and Energy Efficiency Portfolio Standard (CEPS) requiring rural electric cooperatives and municipal electric suppliers in North Carolina to meet 10 percent of their energy needs through clean energy resources or energy efficiency measures. Additionally, North Carolina CEPS requires a percentage of retail sales be attributed to solar, poultry, and swine resources. The Tennessee Valley Authority’s (TVA) renewable energy certificates (REC) portfolio management process includes obtaining and retiring RECs to meet the requirements set forth in CEPS on behalf of its four local power companies (LPC) in the state. By September 1 of each year, TVA is required to file an annual compliance report for the prior year. Also, at that time, TVA files its compliance plans for the calendar year in which the plan is filed and the following 2 years. Due to increased power demand from data centers in North Carolina, we performed an evaluation to determine if TVA has adequate RECs to meet regulatory requirements in North Carolina for LPCs.
We found that TVA appropriately retired enough RECs to achieve compliance with North Carolina CEPS in 2024 and has enough RECs to meet the general, solar, and swine requirements for compliance year 2025. However, there is a risk that TVA will not be able to meet the poultry requirement for 2025. TVA has taken action to reduce this risk by submitting a request for offers in 2025 to purchase poultry RECs. Additionally, our review of the 2024 CEPS Compliance Report identified an understatement of RECs to be carried forward for use in future years.
