North Carolina legislature drops the controversial proposal for Duke Energy rates

The legislature this week dropped a controversial proposal on Duke Energy rates, handing a victory to consumer and advocacy groups that fought for months to keep it from passing.

What’s left is a bill that will allow Duke Energy and other utilities to issue bonds to pay for storm recovery, The News & Observer has reported. This provision has bipartisan support and is supposed to save electricity customers money.

Initially, Senate Bill 559 included provisions that would allow the state Utilities Commission to set electricity rates for up to three years rather than have Duke Energy justify increases every year. The power company said the change would allow for better planning. The bill also would have allowed for “return on equity banding” where the utility would be able to earn a certain percentage above or below a target amount set by the Utilities Commission without being penalized.

An array of consumer and environmental groups said the changes were a way for Duke Energy to soak its customers.

The bill was one of the most lobbied about this session, producing newspaper and digital ads, petitions, and email campaigns.

Michael Regan, the Department of Environmental Quality secretary, told Ben Stockdale of the NC Sustainable Energy Association earlier this month that Gov. Roy Cooper was likely to veto the bill because of the rate proposals. In an interview on the association’s podcast, Regan said such complex issues should not be negotiated behind closed doors or be focused on only one company.

The controversial elements on rate setting passed the Senate, but could not pass the House, where it had bipartisan opposition.

This week, legislators stripped out the potential rate-setting changes and left the part everyone supported.

The House passed the bill on Tuesday with a unanimous vote. The Senate passed the bill unanimously on Wednesday. It now goes to Cooper for his signature.

Both supporters and opponents said the state needs to re-evaluate how electricity rates are set. Opponents didn’t want Duke Energy to be able to determine how that should change without negotiating with other groups.

Sen. Bill Rabon, a Southport Republican and one of the bill’s sponsors, said the proposal for changing how rates can be set will come back to the legislature in future months.

Sen. Mike Woodard, a Durham Democrat, said he hoped the time is used for “a serious and robust stakeholder process on how we make rates in the future.”

Environmental groups cheered the outcome.

In an email Wednesday, the North Carolina League of Conservation Voters said it sent legislators 4,396 emails opposing the original bill.

The Environmental Defense Fund said it’s time to invite more people into discussions.

“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,” David Kelly, senior manager of North Carolina public affairs for the Environmental Defense Fund, said in an emailed statement Tuesday.

“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.”

This story was originally published October 30, 2019 at 6:06 PM.