North Carolina SB 1024: JEWISH STUDIES CENTER

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 1024

Short Title: My Power Bill Is Too High. (Public)
Sponsors: Senators Murdock and Salvador (Primary Sponsors).
Referred to: Rules and Operations of the Senate
May 4, 2026
*S1024-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO REPEAL MULTIYEAR RATE-MAKING AUTHORITY AUTHORIZED BY 2
S.L. 2021-165 AND TO DIRECT A REEXAMINATION OF PERFORMANCE-BASED 3
RATE MAKING TO BETTER PROTECT NORTH CAROLINA CUSTOMERS. 4
Whereas, S.L. 2021-165 (House Bill 951) authorized performance-based rate making 5
and multiyear rate plans for electric public utilities; and 6
Whereas, under current law, electric public utilities are permitted to propose multiyear 7
rate plans (MYRPs) that allow rates to increase automatically over several years without the same 8
levels of annual regulatory scrutiny; and 9
Whereas, performance-based rate making was intended to align utility financial 10
incentives with outcomes that matter to consumers, including lower costs, reliability, and 11
efficiency; and 12
Whereas, under House Bill 951, performance incentive mechanisms (PIMs) are tied 13
to utility earnings but remain limited in financial impact relative to overall utility revenues and 14
capital investment decisions; and 15
Whereas, utilities operating under traditional regulatory structures continue to earn 16
results based primarily on capital investment, meaning they are financially incentivized to build 17
more generation, transmission, and infrastructure, regardless of whether lower-cost alternatives 18
such as energy efficiency or demand-side management would better serve customers; and 19
Whereas, performance incentive mechanisms in North Carolina have been discussed 20
and implemented at levels that are effectively capped at approximately one percent (1%) of utility 21
earnings, which is insufficient to outweigh the financial incentives associated with large-scale 22
capital investments; and 23
Whereas, a performance incentive capped at or near one percent (1%) cannot 24
reasonably be expected to drive changes in utility decision making when utilities may earn 25
significantly higher returns through capital expenditures; and 26
Whereas, as a result, current performance-based rate-making structures do not 27
meaningfully change utility behavior or adequately protect consumers from rising electricity 28
costs; and 29
Whereas, consumers reasonably expect that energy policy will prioritize lower bills, 30
fewer unnecessary infrastructure costs, and real accountability for utility performance; and 31
Whereas, without stronger incentives or penalties tied directly to outcomes that matter 32
to customers—such as bill affordability, peak demand reduction, and avoided infrastructure 33
costs—performance-based rate making risks becoming a nominal reform rather than a 34
meaningful consumer protection tool; and 35

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 1024-First Edition
Whereas, the General Assembly finds that stronger performance incentives and 1
greater regulatory accountability are necessary to ensure that utility actions align with consumer 2
interests; Now, therefore, 3
The General Assembly of North Carolina enacts: 4
5
REPEAL OF MULTIYEAR RATE PLANS 6
SECTION 1. General Rate Case. – G.S. 62-133 is amended by adding a new 7
subsection to read: 8
"(g) Notwithstanding any other provision of law, rates for electric public utilities shall be 9
established only through a general rate case conducted pursuant to this section. The Commission 10
shall not approve or implement any form of automatic or preauthorized multiyear rate adjustment 11
mechanism." 12
SECTION 2.(a) Repeal MYRP. – G.S. 62-133.16 reads as rewritten: 13
"§ 62-133.16. Performance-based regulation authorized. 14
(a) Definitions. – For purposes of this section, the following definitions apply: 15
... 16
(4) "Earnings sharing mechanism" means an annual rate-making mechanism that 17
shares surplus earnings between the electric public utility and customers over 18
the a period of time covered by a MYRP.PBR plan. 19
(5) "Multiyear rate plan" or "MYRP" means a rate-making mechanism under 20
which the Commission sets base rates for a multiyear period that includes 21
authorized periodic changes in base rates without the need for the electric 22
public utility to file a subsequent general rate application pursuant to 23
G.S. 62-133, along with an earnings sharing mechanism. 24
... 25
(7) "Performance-based regulation" or "PBR" means an alternative rate-making 26
approach that includes decoupling, an earnings sharing mechanism, and one 27
or more performance incentive mechanisms, and a multiyear rate plan, 28
including an earnings sharing mechanism, or such other alternative regulatory 29
mechanisms as may be proposed by an electric public utility.mechanisms. 30
... 31
(9) "Rate year" means the year of the MYRP for which base rates are effective. 32
... 33
(c) Application. – An electric public utility shall