A controversial bill on North Carolina electricity rates sputters

A controversial proposal that could change the way North Carolina electricity users rates are set hit a snag Tuesday.

The state House voted to study changing the way the state Utilities Commission sets rates, rather than authorize outright what could be a major overhaul.

Duke Energy wants the state Utilities Commission to be allowed to set utility rates for up to three years at a time, rather than conduct more frequent reviews, usually annually, when utilities seek rate hikes.

Senate bill 559 was moving quickly until it came up for a vote in the state House. It was stalled for about a month before coming to a vote on Tuesday.

The House changed the bill to authorize a study of rate-making with a 63-51 vote, and after arguments that such a major change earned more discussion and consideration.

“This is a game-changing situation with electric rates in North Carolina,” said Rep. Larry Strickland, the Johnston County Republican who proposed the study. Under his amendment, the Utilities Commission would consult with the power companies, industrial customers, representatives from the renewable energy industry, state officials and others, and report on its findings in two months.

The call for a study passed with a majority of House Democrats in support and with most House Republicans, including House Speaker Tim Moore, opposed. The bill now goes back to the Senate, which will decide whether or not to agree to the study. The Senate passed a previous version of the bill in May with a 27-21 vote.

The bill faced vigorous opposition from electricity customers and environmental groups who claim the changes will result in a windfall for Duke Energy and drastic increases in electricity bills. Opponents visited legislators’ offices, ran newspaper ads, and bombarded lawmakers with email and petitions, The News & Observer has reported.

Legislators tried to appease critics with a change requiring Duke Energy to invest returns up to 1.25% of those authorized by the Utilities Commission in projects the bill’s supporters said would help low income communities. The bill’s opponents said the changes were just another way for Duke Energy to increase its profits.

Rep. David Lewis, a Harnett County Republican, said the bill’s opponents “perpetuated the myth” that the bill “raises rates or harms consumers” to get concessions out of Duke Energy.

“They resorted to fear-mongering and mischaracterized the bill,” Lewis said.

Environmental groups released statements supporting the study. Josh McClenney, North Carolina field coordinator for Appalachian Voices, called the study “an absolutely critical step.”

“This is how public policy should be made, with a thorough and open vetting by the public and by experts to understand the full impact on North Carolina families and businesses, not through Duke Energy writing its own bills and making deals with legislators behind closed doors,” he said in an emailed statement. “Regardless of what happens when the bill gets to the Senate, multi-year rate hikes should not be passed outside of broader utility regulatory reform.”