North Carolina HB 1168: Limit Electric Utilities Historic Fuel Cost Recovery.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA 
SESSION 2025 
H 1 
HOUSE BILL 1168 
 
 
Short Title: Limit Electric Util. Hist. Fuel Cost Recovery. (Public) 
Sponsors: Representatives T. Brown, Reives, Prather, and Pittman (Primary Sponsors). 
For a complete list of sponsors, refer to the North Carolina General Assembly web site. 
Referred to: Rules, Calendar, and Operations of the House 
May 4, 2026 
*H1168-v-1* 
A BILL TO BE ENTITLED 1 
AN  ACT  TO  RESTORE  CERTAIN  LIMITATIONS  PREVENTING  ELECTRIC  PUBLIC 2 
UTILITIES FROM RECOVERING HISTORIC FUEL COSTS FROM CUSTOMERS. 3 
The General Assembly of North Carolina enacts: 4 
SECTION 1.  G.S. 62-133.2(d) reads as rewritten: 5 
"(d) The Commission  shall  provide  for  notice  of  a  public  hearing  with  reasonable  and 6 
adequate time for investigation and for all intervenors to prepare for hearing. At the hearing the 7 
Commission shall receive evidence from the utility, the Public Staff, and any intervenor desiring 8 
to submit evidence, and from the public generally. In reaching its decision, the Commission shall 9 
consider all evidence required under subsection (c) of this section as well as any and all other 10 
competent evidence that may assist the Commission in reaching its decision including changes 11 
in  the  cost  of  fuel  consumed  and  fuel-related  costs  that  occur  within  a  reasonable  time,  as 12 
determined by the Commission, after the test period is closed. The Commission shall incorporate 13 
in  its  cost  of  fuel and  fuel-related  costs  determination  under  this  subsection  the  experienced 14 
over-recovery  or  under-recovery  of  reasonable  costs  of  fuel  and  fuel-related  costs  prudently 15 
incurred by the electric public utility, during the test period, based upon the prudent standards set 16 
pursuant  to  subsection  (d1)  of  this  section,  in  fixing  an  increment  or  decrement  rider. The 17 
Commission  shall not  incorporate  in  this  determination  any  fuel  or  fuel-related  costs  incurred 18 
prior  to  the  test  period. Upon  request  of  the  electric public  utility,  the  Commission  shall  also 19 
incorporate  in  this  determination  the  experienced  over-recovery  or  under-recovery  of  costs  of 20 
fuel and fuel-related costs through the date that is 30 calendar days prior to the date of the hearing, 21 
provided  that  the  reasonableness  and  prudence  of  these  costs  shall  be  subject  to  review  in  the 22 
utility's  next  annual  hearing  pursuant  to  this  section.  The  Commission  shall  use  deferral 23 
accounting,   and   consecutive   test   periods,   in   complying   with   this   subsection,   and   the 24 
over-recovery or under-recovery portion of the increment or decrement shall be reflected in rates 25 
for  12  months,  notwithstanding  any  changes  in  the  base  fuel  cost  in  a  general  rate  case.  Any 26 
experienced over-recovery or under-recovery of reasonable fuel and fuel-related costs prudently 27 
incurred during the test period shall accrue interest at the commercial paper rate as identified by 28 
the  Federal  Reserve  for  A2/P2  nonfinancial  issuers,  or  reasonable  successor  thereto,  on  a 29 
weighted average basis over the applicable time period. The burden of proof as to the correctness 30 
and reasonableness of the charge and as to whether the cost of fuel and fuel-related costs were 31 
reasonably and prudently incurred shall be on the utility. The Commission shall allow only that 32 
portion,  if  any,  of  a  requested  cost  of  fuel  and  fuel-related  costs  adjustment  that  is  based  on 33 
adjusted  and  reasonable  cost  of  fuel  and  fuel-related  costs  prudently  incurred  under  efficient 34 
management and economic operations. In evaluating whether cost of fuel and fuel-related costs 35 

General Assembly Of North Carolina Session 2025 
Page 2  House Bill 1168-First Edition 
were reasonable and prudently incurred, the Commission shall apply the rule adopted pursuant 1 
to subsection (d1) of this section. To the extent that the Commission determines that an increment 2 
or decrement to the rates of the utility due to changes in the cost of fuel and fuel-related costs 3 
over or under base fuel costs established in the preceding general rate case is just and reasonable, 4 
the  Commission  shall  order  that  the  increment  or  decrement  become  effective  for  all  sales  of 5 
electricity  and  remain  in  effect  until  changed  in  a  subsequent  general  rate  case  or  annual 6 
proceeding under this section." 7 
SECTION  2.  There  is  appropriated  from  the  General  Fund  to  the  Utilities 8 
Commission the sum of ten thousand dollars ($10,000) in nonrecurring funds for the 2026-2027 9 
fiscal year to be used for purposes consistent with this act. 10 
SECTION 3.  This act becomes effective July 1, 2026, and applies to any rate-making 11 
mechanisms filed by an electric public utility on or after that date. 12