NORTH CAROLINA — A bill that would have impacted utility costs and the state’s climate goals has been vetoed by Governor Josh Stein.
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Senate Bill 266, “The Power Bill Reduction Act,” did not receive Stein’s Hancock on July 2. If passed, it would eliminate the 2030 carbon emissions reduction target, reallocate power costs to residents, and adjust utility cost recovery rules.
Proponents, including Senate President Pro Tempore Phil Berger and Duke Energy, claimed the bill would save ratepayers billions and ensure reliability. Opponents, including Stein, countered it will raise residential bills, increase reliance on natural gas, and hinder clean energy goals.
S.B. 266 began as a bill concerning floodplain home rebuilding, but its focus shifted in early June. Union County Rep. Dean Arp (R) championed amending it into its current form, which passed in Republican favor in both the House, 75-36, and Senate, 29-11, in June. It was sponsored by Senator Warren Daniel (R-Buncombe), who was reelected in the 2024 cycle and received a $7,000 contribution from the Duke Energy Corporate PAC; Arp also received $12,800 from the PAC.
Stein wrote in his veto statement that the summer heat and rising utility bills should be refocused to “lowering electricity costs for working families — not raising them.”
North Carolina Justice Center’s senior policy advocate Claire Williamson “applauded” the veto. The center’s nonprofit is dedicated to eliminating poverty and advancing economic justice for North Carolinians. Williamson said the bill would benefit Duke, while affecting low-income households already struggling to afford the “basic necessity of heating and cooling their homes.”
New Hanover Rep. Deb Butler (D), who previously voted against the bill’s passage in the House, told Port City Daily she is “grateful” for the governor’s veto.
“Senate Bill 266 in my estimation is very bad for many reasons, not the least of which would be a likely increase for anyone who pays a Duke power electric bill,” Butler said. “In short, it’s bad for Duke customers and bad for the environment so I am grateful that our governor vetoed it and I will certainly support his veto.”
In defense of the veto, Stein referred to an analysis by EQ Research for the Environmental Defense Fund, which found the Senate bill would shift about $87 million each year in purchased power costs from businesses to homes. This could lead to a 19% jump in that specific charge for households.
Separately, public staff of the North Carolina Utilities Commission projected a more conservative shift of approximately $24.8 million annually to Duke’s residential customers, translating to roughly $6.71 to $7.89 more per year.
NCUC projected the bill’s passing could bring in a total of $13 billion in savings, though legislative leaders, such as Senate President Pro Tempore Phil Berger, have publicly “estimated $15 billion.”
Proponents also assert that removing the 2030 carbon reduction deadline allows energy companies like Duke to pursue a more diversified energy mix, including sustained reliance on natural gas and investments in major nuclear power plants. They argue natural gas and nuclear energy are more cost-effective and reliable in the long run than rapidly scaling up renewables.
The reduction goals for carbon dioxide emissions from North Carolina power plants — a 70% decrease from 2005 levels by 2030, and carbon neutrality by 2050 — were established by House Bill 951, “Energy Solutions for North Carolina.” It was signed into law by former Gov. Roy Cooper in October 2021. This “net-zero” goal mostly focuses on the electricity sector, aiming to transition away from fossil fuels, such as coal and natural gas, and toward cleaner energy sources like solar and wind.
“As our state continues to grow, we need to diversify our energy portfolio so that we are not overly reliant on natural gas and its volatile fuel markets,” Stein wrote in his veto statement.
Duke Energy argues delaying the 2030 emissions target allows for a more cost-effective transition, saving billions by avoiding rapid, expensive investments in new clean energy infrastructure. This means utilizing existing natural gas plants longer and awaiting cheaper future technologies, spreading costs over more years for ratepayers.
A Duke spokesperson asserted in a statement: “Policies enabling more timely recovery of investments in modern infrastructure, like always-on nuclear power plants, help keep overall costs down for customers and result in more predictable energy prices by avoiding sudden spikes.”
On November 1, 2024, North Carolina Utilities Commission granted Duke an extension on the 2030 emissions target, agreeing achieving the 70% reduction by 2030 was not feasible while ensuring a consistent and uninterrupted power supply for customers. Duke’s own projections show compliance with the emissions target by 2035.
An independent analysis of S.B. 266 from researchers at N.C. State University revealed removing the 2030 carbon emissions reduction target could lead to a $23 billion increase in fuel costs through 2050, primarily due to a heavier reliance on natural gas with volatile market prices. The researchers claimed while delaying immediate infrastructure costs might be beneficial in the short-term, the long-term risk of fluctuating and potentially higher fossil fuel prices could negate any claimed savings and raise prices for North Carolinians.
Williamson told Port City Daily she has gotten more calls this year from ratepayers who are concerned about increases in their energy bills, who often attribute it to renewable energy.
“There is a misconception that renewables are what is driving rate increases, when in fact, the majority of the rate increases that have happened recently are because of natural gas spikes,” Williamson said.
The Environmental Defense Fund research found natural gas fuel costs accounted for between 46% and 67% of Duke Energy’s residential retail rate increases since 2017 in its North Carolina territories. Unlike fossil fuels, the costs of renewable energy sources, such as solar and wind, are not subject to the same market volatility, as their “fuel” (sunlight and wind) is free.
Williamson pointed out the bill also would have allowed Duke to charge ratepayers for costs associated with construction works-in-progress. Essentially, customers would pay for the financing of large-scale projects, such as natural gas or nuclear facilities, while they are still being built and before they are operational.
“What the proponents of this miss is they’re exposing ratepayers to much greater risk, should something not go right,” Williamson said.
With ratepayers forking out money for power plant projects before and during construction, they’re also on the hook for variables. Williamson said this could include changes in construction costs, natural gas prices or pollution controls impacting whether energy infrastructure projects are completed on time or to the level they should be.
“We’re talking about 10 to 15 years of projects here that could change once it’s been put in motion,” Williamson said. “There’s no chance for ratepayers to get that money back, versus the previous model, which is saying ratepayers are going to only pay for something once it’s useful. This is a chunk of change that ratepayers could pay for and get nothing in return.”
To override Stein’s veto of S.B. 266, a three-fifths majority of the members present and voting in each chamber is required. The General Assembly’s capacity to override Stein’s veto of SB 266 is split: Republicans command a supermajority in the Senate (30-20), but lack one vote in the House (71-49), meaning they will need at least one Democratic vote in the House to succeed.
Speaker of the House, Republican Destin Hall wrote on social media after the veto he was “disappointed” in Stein’s decision and anticipates both chambers overriding the veto.
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