North Carolina legislators take controversial multiyear rate increases off the table, green-light storm cost-recovery mechanism

(RALEIGH, NC) North Carolina legislators today took a controversial rate reform proposal off the table that, if approved, would have paved the way for multiyear rate increases, allowed utilities to over-earn on profits, and curtailed public input on electricity ratemaking. The proposal was part of Senate Bill 559, which also included some positive elements, like securitization of storm recovery costs – a mechanism by which utility expenses related to storm damage can be financed through bonds at favorable interest rates to help reduce the burden of those costs for customers. A revised version of the legislation, including only the storm securitization provisions, was approved by the North Carolina House on a unanimous vote (112-0). Final vote in the state Senate is expected sometime this week.

“Taking the current multi-year rate design off the table while allowing customers to benefit from storm securitization are welcome developments for Senate Bill 559. Looking ahead, we hope a stakeholder process will emerge that can help launch an inclusive conversation about what types of utility rate reforms will best meet the changing needs of both utilities and customers, while helping accelerate an economically rational transition to a cleaner, more affordable, more responsive energy system.”

• David Kelly, Senior Manager, North Carolina Political Affairs