In 2021, the General Assembly passed HB 951, a bipartisan energy bill prioritizing regulatory guardrails to protect grid reliability and least-cost generation planning while pursuing Gov. Roy Cooper’s politically favored carbon reduction goals. The bill was, at the time, a reasonable and, dare I say, conservative response to costly Green New Deal-style policies typically favored by Democrats.
The law’s success was always going to be in its implementation by the North Carolina Utilities Commission (NCUC): They failed.
A little over three years later, North Carolinians face rising electricity bills amidst the NCUC’s pursuit of unreliable sources like solar that raise costs and jeopardize reliability — the antithesis of the law’s intent — rather than reliable sources that reduce emissions. The Senate is giving the NCUC the course corrections it needs.
SB 261, filed this week in the Senate, is critical to realigning North Carolina’s energy policy with the true intention of HB 951 — securing a reliable and affordable energy future for the state. By removing the arbitrary 2030 carbon-reduction deadline and allowing an alternative cost-recovery mechanism for baseload power generation, the bill ensures energy policy is driven by prudence, not political posturing or eco-fundamentalism.
One of the bill’s most significant provisions is removing the 2030 interim deadline for carbon reductions, focusing instead on a more realistic goal of carbon neutrality — not net-zero — by 2050. The previous mandate for a 70% reduction in CO2 emissions by 2030 was aggressive and expensive, forcing utilities to retire existing generation assets prematurely. It also fueled the NCUC’s false belief that it needed to increase the number of renewable resources on the grid. Both are significant factors for rising energy costs and increasing the risk of grid instability, leading to rolling blackouts.
By shifting the focus to 2050, the bill gives Duke Energy the flexibility to transition in a way that prioritizes affordability and reliability. It still allows for technological advancements — such as small modular nuclear, carbon capture, and next-generation natural gas — rather than mandating an immediate, costly overhaul of the energy mix.
During yesterday’s committee meeting, bill sponsors also revealed that the Public Staff — the statutory agency that provides recommendations to the NCUC on public utility policy — incorporated a carbon fee into their modeling for the decarbonization goals. What effectively amounts to a carbon tax was never the intention of the General Assembly in HB 951. This artificially constrained the model, preventing the buildout of reliable sources like natural gas and nuclear, even when they were the most cost-effective and reliable options.
It is important to note that natural gas is the nation’s No. 1 driver of emissions reduction, not renewables. Between 2005 and 2019, the US removed around 819 million metric tons of CO2. Of that total, the US Energy Information Administration attributes nearly two-thirds of the reduction to natural gas.
States like Pennsylvania are a model to follow. By deploying more natural gas into its energy mix (60%), displacing coal, and having a sizeable nuclear profile, the Keystone State has seen some of the most significant reductions in its emissions in decades while increasing its reliable energy supply. And doing so all without carbon taxes or carbon reduction mandates — at a faster rate than other states in the region that have both. To reasonably achieve the 2050 carbon goals while keeping the lights on, the Old North State will need more natural gas and nuclear power.
SB 261 also modifies a Construction Work in Progress (CWIP) mechanism for baseload power. This allows Duke to recover financing costs for new nuclear and natural gas plants during construction, reducing financial risk and encouraging long-term investment in reliable energy infrastructure.
Importantly, this does not mean utilities can recover total construction costs upfront. Instead, it allows for recovering financing costs before a facility is completed. The facilities must be pre-approved by the NCUC as part of the least-cost path for compliance, and any incurred costs must be deemed reasonable and prudent. If they are later found excessive or unnecessary, they can be disallowed from rate recovery, protecting ratepayers from undue risk.
Critics argue this could shift financial burdens onto ratepayers, but history and practice show that reliable baseload power reduces long-term energy costs. Sources like nuclear and natural gas provide reliable power regardless of weather conditions, unlike wind and solar, which require costly additional infrastructure or overbuilding. A reliable grid is an affordable grid.
Unlike heavy-handed mandates in other states, the old HB 951 and the new SB 261 embrace market principles. They allow for competition in energy sources within a responsible regulatory framework of reliability and least cost. Still, the General Assembly should consider exploring options for defining “least-cost” and “reliability” in statute, especially if the NCUC remains unwieldy.
The new law is necessary because the discretion given to the NCUC by the General Assembly in 2021 was abused. Now, legislators are responsible for protecting North Carolinians from arbitrary ideological decisions leading to even higher energy costs. Removing the 2030 deadline and promoting baseload generation ensures North Carolina’s energy future is driven by innovation and common sense.
Lawmakers must protect North Carolinians from high energy costs.
