## Facts

- North Carolina’s Renewable Energy and Energy Efficiency Portfolio Standard (REPS), N.C. Gen. Stat. § 62-133.8, requires utilities to meet renewable energy and efficiency targets and permits compliance through Renewable Energy Certificates (RECs).
- RECs may be generated only by registered “renewable energy facilities” using “renewable energy resources,” which include “a biomass resource.”
- The statute defines “biomass resource” by listing items such as agricultural waste, animal waste, wood waste, energy crops, and landfill methane.
- Duke Energy Carolinas, LLC applied to register two generating units (Buck and Lee plants) as renewable energy facilities to earn RECs by co-firing wood chips derived from whole trees harvested in a primary harvest along with coal.
- The North Carolina Utilities Commission approved Duke’s application, determining that wood derived from whole trees in a primary harvest qualifies as a “biomass resource” under § 62-133.8.
- Environmental Defense Fund and North Carolina Sustainable Energy Association sought judicial review, arguing the statute limits biomass to wastes/residues and excludes whole trees harvested for fuel.
- The Commission and intervening utilities/public power entities defended the order, and the dispute proceeded to the North Carolina Court of Appeals.

## Issues

1. Whether the Utilities Commission erred in interpreting “biomass resource” in N.C. Gen. Stat. § 62-133.8 to include wood derived from whole trees harvested in a primary harvest, thereby allowing Duke’s facilities to generate RECs.
2. Whether the statutory list of biomass resources is exhaustive or illustrative.
3. Whether ejusdem generis limits “biomass resource” to waste-type materials and by-products.
4. Whether the Commission permissibly relied on technical materials outside the statute when construing the term.

## Decision

- The Court of Appeals affirmed the Utilities Commission’s order.
- The court upheld the Commission’s determination that primary-harvest whole-tree wood qualifies as a “biomass resource” and therefore a “renewable energy resource” under § 62-133.8.
- The court rejected the argument that the statute’s list of biomass resources is a closed list and declined to narrow the term using ejusdem generis.
- The court treated the Commission’s use of technical materials as consistent with the agency’s role in administering a specialized regulatory program and within the bounds of reasonable interpretation.
- Duke’s two facilities remained eligible to be registered as renewable energy facilities generating RECs using whole-tree wood fuel.

## Legal Principles

- When a statute uses “include/including” in defining a category and then provides examples, the enumerated items are generally read as illustrative rather than exhaustive absent clear limiting language.
- Ejusdem generis does not apply to restrict a broad statutory term where the text and structure indicate an expansive scope and the examples include items not sharing the proposed limiting feature (e.g., “energy crops” are not waste).
- In judicial review of a utilities regulator’s order, an agency’s reasonable construction of an administered statute—particularly in a technical field—will be upheld if not inconsistent with statutory text or beyond the agency’s authority.
- Policy objections to the consequences of a statutory interpretation do not justify narrowing statutory language where the legislature did not impose the proposed limitation.

## Conclusion

The court affirmed the Utilities Commission’s approval of Duke’s REPS registration, holding that the Commission reasonably interpreted “biomass resource” to include wood chips derived from whole trees harvested in a primary harvest, making the facilities eligible to generate RECs under North Carolina’s REPS statute.


State ex rel. Utils. Comm’n v. Env’t Def. Fund, 214 N.C. App. 364 (2011)