North CarolinaSB 2662025-2026 SessionSenateWALLET

The Power Bill Reduction Act.

Sponsored By: Danny Earl Britt, Jr. (Republican), Warren Daniel (Republican), Timothy D. Moffitt (Republican)

Became Law

AGRICULTUREAGRICULTURE DEPT

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Bill Overview

Analyzed Economic Effects

10 provisions identified: 2 benefits, 1 costs, 7 mixed.

Investor protections for securitization bonds

The State pledges not to impair securitization charges or contracts, and bonds are not State debt. Many public and private institutions may invest. Transfers and liens on securitization property are perfected by filing with the Secretary of State, and priority follows filing time. Transfers are treated as true sales; securitization property exists and can be assigned until bonds are paid, and assignees are not regulated as utilities. Courts can sequester revenues on default; North Carolina law governs; prior authorized actions stay valid; documents must reference the financing order and common deal features do not impair purchaser rights.

New securitization charges on power bills

The law adds nonbypassable charges on all retail electric bills to repay securitization bonds. These charges cover coal plant retirement costs (including 100% of the remaining net book value, carrying costs to bond issuance, and decommissioning) and Commission‑approved storm recovery costs, plus financing and reserve fees. A financing order sets how much is collected, for how long, how it is split among customer classes, and a true‑up formula. Charges stay until all bonds and financing costs are fully repaid. The law defines which coal plants qualify (pressure under 3,200 psi, temperature under 1,025°F, efficiency 37% or less) and the baseline “traditional recovery” method (at least five years at the utility’s approved WACC) used for comparisons.

Fuel-cost rider changes to your bill

Utilities must file fuel‑cost updates within 45 days after each quarter. If the projected over‑ or under‑recovery is over 10% of the last approved fuel revenue, the rider must be adjusted about 45 days later for roughly 12 months. The rider can include more costs, including some renewable purchases, but those increases are capped at 2.5% of prior‑year North Carolina retail revenues. For smaller utilities (under 150,000 customers in 2006), listed core items are capped at 1%. Over‑ and under‑recoveries earn interest at the A2/P2 commercial paper rate, the Commission sets prudence standards within one year, and utilities must prevent double recovery.

Limits on multi-year electric rate hikes

In a multi‑year rate plan, base rates cannot rise more than 4% in each of years two and three, measured against year‑one revenue. Very large new plants (over $500 million) are excluded from MYRPs; utilities may defer related costs as a regulatory asset for later review. Utilities must report MYRP projects each quarter and explain cancellations, with follow‑up review in the next rate case. The Commission can pause proposed base rates up to 330 days. PBR technical conferences must occur within 90 days of filing and at least 30 days before the intervention deadline.

Stronger oversight of plant construction costs

The Commission runs an ongoing review of certified plant construction. Utilities must prove costs are reasonable, file quarterly reports, and face hearings within 120 days, with a decision within 60 days after the hearing ends. If a baseload plant’s prudent costs save customers over its life, the Commission allows a base‑rate increase to recover only financing costs on those amounts, up to the approved estimate and net of customer contributions and program revenues. Recovery stops if construction is canceled. For natural‑gas baseload plants, recovery does not apply to costs incurred after December 31, 2033.

Carbon plan, offset cap, big utilities

The Utilities Commission creates a Carbon Plan by December 31, 2026, with input from utilities and stakeholders. It reviews and may adjust the plan every two years. Covered utilities must reach carbon neutrality by 2050. Any offsets must be verifiable and can cover at most 5% of the required cuts. These rules apply only to utilities with at least 150,000 North Carolina retail customers on January 1, 2021.

Carbon-neutral power and plant approvals

Covered electric utilities must reach carbon neutrality by 2050. New power plants must be part of the least‑cost path to meet that goal and keep or improve reliability. The Commission must check if other options would be cheaper and more reliable before granting a certificate.

Clear bill line for securitization charges

If a utility issues securitization bonds, your bill shows those charges as a separate line. It also shows any coal plant retirement charges. If an assignee owns the right to collect, the bill states that. Details can appear on the bill, in an attachment, or by a tariff reference.

Faster approval and court review of securitization

A utility can petition the Commission for a financing order and must file detailed cost estimates, an NPV comparison, and sworn testimony. The Commission sets a schedule within 14 days and must approve or reject the petition within 135 days. An adversely affected party can seek review by the North Carolina Supreme Court within tight deadlines, based only on the record and written briefs.

Securitization rules: charges locked, utility choice

Once securitization property is transferred or bonds are issued, the financing order is final. The Commission cannot change approved securitization charges, except for formula true-ups allowed by law. The Commission cannot force a utility to use securitization or treat the bonds as the utility’s state debt. Starting July 29, 2025, related financing filings follow Article 9 rules and do not need continuation statements.

Sponsors & Cosponsors

Cosponsors

Bob Brinson
Republican • Senate
Jim Burgin
Republican • Senate
Bobby Hanig
Republican • Senate
Ralph Hise
Republican • Senate
Steve Jarvis
Republican • Senate
Norman W. Sanderson
Republican • Senate
Eddie D. Settle
Republican • Senate