NORTH CAROLINA — A renewable energy advocacy group is urging Gov. Josh Stein to oppose legislation that would allow Duke Energy to charge customers upfront costs for new power plants. The nonprofit argued ratepayers should not bear additional risks since Duke has a history of expensive canceled nuclear projects.
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Durham-based NC Warn sent a letter to Gov. Josh Stein Tuesday in opposition to S.B. 261, a bill that would eliminate Duke’s 2030 interim carbon reduction goal and allow the company to charge ratepayers for power plants still under construction. The legislation passed the Senate and its language is included in the Senate budget proposal.
“Do not allow Duke Energy to foist the financial risk for high-stakes nuclear speculation onto the backs of electric ratepayers,” NC Warn wrote in the letter. “Investors — not captive customers — should bear the risks for gambling by corporate executives and boards of directors.”
North Carolina allows utilities to recover power plant construction costs every three years in rate cases overseen by the Utilities Commission. S.B. 261 would amend the rate-making process by letting utilities request more frequent rate increases to finance the design, development, and construction of new technologies, including advanced nuclear reactors.
A broad range of advocacy groups across the political spectrum have criticized S.B. 261 for making customers bear risks for projects that may not be completed. NC Warn’s new analysis found Duke has canceled or closed early 19 nuclear reactor projects since the 1970s; the nonprofit estimates they cost at least $8.9 billion.
“After 19 gigantic corporate screwups, will our state leaders sell the public out to benefit Duke Energy yet again?” NC Warn executive director Jim Warren asked.
The Utilities Commission approved $440 million in early development costs for Duke’s two proposed small modular reactor nuclear facilities in its approval of Duke’s carbon plan last fall. The Utilities Commission has conceded SMRs are not a mature technology as there are no operational SMRs in the United States; energy firm NuScale canceled its SMR project in Utah last year due to repeated cost increases after spending $600 million in federal funds.
Conservatives for a Clean Energy Future carried out a poll last month and found more than three-fourths of North Carolina voters oppose allowing utility companies to charge ratepayers upfront costs for expensive power plants even if projects are not completed.
The nonprofit commissioned Raleigh-based political consulting firm Strategic Partners Solutions to ask 650 voters of various political affiliations if they supported the S.B. 261 proposal. Out of 219 polled Republicans, only 14.2% expressed support versus 75.3% opposed; the margins were similar for 218 Democrats included in the poll.
“North Carolina voters of every kind oppose putting consumers on the hook for risky spending on power plants that might never produce a single watt of energy,” Strategic Partners Solutions partner Dee Stewart said in a release. “You don’t buy a house until it’s built, and you don’t pay for a car before it’s available. Big, profitable power companies shouldn’t squeeze North Carolina families and small businesses for a service they haven’t yet delivered.”
Alternatively, some industry trade groups argue SB 261 would make it easier for utilities to provide a broader range of affordable energy sources. The NC Chamber supports SB 261 as a key vote for the 2025 legislative session; Duke is in the lobby group’s highest donor category.
“This marks an important advancement of policy for North Carolina to continue to provide nation-leading reliable, affordable energy for our manufacturers and residents so we can lead in future nuclear generation,” the NC Chamber wrote in a March blog post.
Last spring, energy consultant Edward Burgess submitted a brief to the Utilities Commission on behalf of Stein, raising concerns about Duke’s proposed buildout of small modular nuclear reactors.
Duke earns around 10% in guaranteed profit for capital invested in its projects. Burgess contended the incentive influenced the utility to delay its carbon reduction goal by prioritizing expensive new gas and nuclear infrastructure above cost-effective alternatives.
“All else being equal, the more capital intensive a capacity resource is, the more attractive it should be to shareholders,” Burgess wrote. “In recent years, nuclear resources have tended to become one of the most capital-intensive resources available.. Following the basic economic principles of profit maximization, it should come as no surprise if an investor-owned utility like Duke were biased towards the inclusion of a nuclear resource.”
