In October 2021, the North Carolina legislature passed H.951, which set the state’s first targets for cutting electricity-sector carbon emissions, with a goal to bring emissions down 70 percent below 2005 levels by 2030. The legislation will require the North Carolina Utilities Commission to develop a plan by the end of 2022 to meet the emissions-reduction standard and prioritize the lowest-cost options when determining what mix of resources Duke Energy, the state’s single large utility, might be allowed to build to meet those goals. This puts the North Carolina Utilities Commission in charge of assessing the relative cost and reliability of the mix of resources Duke may propose to replace the roughly 6.7 gigawatts of coal-fired power plants it operates in North Carolina.
The legislation will promote securitizing coal plants slated for closure. Securitization allows utilities to issue bonds to reduce the financial burden on customers who would otherwise be forced to continue paying the costs of building those power plants after they’re closed down. The legislation allows securitization to cover up to half of coal plants’ remaining costs.
Not all aspects of the bill have been praised by environmentalists, however. Per Canary Media, the Southern Alliance for Clean Energy notes that the performance-based ratemaking language in the legislation includes environmental performance incentives that could “lead to utility profit windfalls for doing the bare minimum,” as well as a customer cost-sharing method that “shifts costs from large customers to residential customers.”