SB 261 — Energy Security and Affordability Act.

FILED SENATE GENERAL ASSEMBLY OF NORTH CAROLINA MarSESSION 10, 2025 S.B.S 1 SENATE BILL 261 Short Title:

261 SESSION 2025 PRINCIPAL CLERK S D SENATE BILL DRS35119-RI-13 Short Title:

Agriculture, Energy, and Environment March 11, 2025 A BILL TO BE ENTITLED AN ACT TO ELIMINATE THE INTERIM DATE FOR CARBON REDUCTION BY CERTAIN ELECTRIC PUBLIC UTILITIES AND TO ALLOW AN ALTERNATIVE COST RECOVERY MECHANISM FOR CONSTRUCTION WORK IN PROGRESS FOR BASELOAD ELECTRIC GENERATING FACILITIES.

The Utilities Commission shall take all reasonable steps to achieve a seventy percent (70%) reduction in emissions of carbon dioxide (CO2) emitted in the State from electric generating facilities owned or operated bybyelectric electric public utilities from 2005 levels bybythe the year 2030 and that result in carbon neutrality by the year 2050.

Any new generation facilities or other resources selected by the Commission in order to achieve the authorized reduction goals goal for *DRS35119-RI-13**S261-v-1* General Assembly Of North Carolina Session 2025 electric public utilities shall be owned and recovered on a cost of service basis by the applicable electric public utility except that:

To the extent that new solar generation is selected bybythe the Commission, in adherencewith least cost requirements, thesolargenerationselected shall be subject to the following:

provided, however, the Commission shall not exceed the dates date specified to achieve the authorized carbon reduction goals goal by more than two years, except in the event the Commission authorizes construction of a nuclear facilityfacilityor or wind energyenergyfacilitythat facility that would require additional time for completion due to technical, legal, logistical, or other factors beyond the control of the electric public utility, or in the event necessary to maintain the adequacy and reliability of the existing grid.

A certificate for the construction of generating facility by an electric public utility, as that term is defined by Page 2 DRS35119-RI-13Senate Bill 261-First Edition General Assembly Of North Carolina Session 2025 G.S.

62-110.9,will maintainorimproveupon theadequacytheadequacyand andreliabilityreliability of the existing grid, and that the construction and operation of the facilityfacilityis is in the public interest.

(a) In fixing the rates for any public utilityutilitysubject subject to the provisions of this Chapter, other than bus companies, motor carriers and certain water and sewer utilities, the Commission shall fix such rates as shall be fair both to the public utilities and to the consumer.

For baseload electric generating facilities, if the Commission determines there is an overall cost-savings for customers over the life of the generatinggeneratingfacilityand facility and a baseload electric generatinggeneratingfacilityhas facility has been subject to an annual ongoing review process pursuant to G.S.

In DRS35119-RI-13Senate Bill 261-First Edition Page 3 General Assembly Of North Carolina Session 2025 determiningnetoperatingincomeforreturn,theCommissionshallnotinclude any capitalized allowance for funds used during construction on the construction work in progress included in the utility's rate base.

62-133 the actual costs it has incurred in constructing a generating facilityfacilityin in reliance on a certificate issued under this section as provided in this subsection, unless new evidence is discovered (i) that could not have been discovered by due diligence at an earlier time and (ii) that reasonably tends to show that a previous determination by the Commission that a material item of cost was just and reasonable and prudently incurred was erroneous.

(f2) If the construction of a facility is cancelled, including cancellation as a result of modification or revocation of the certificate under subsection (e1) of this section, and the construction of the facilityfacilityhas has been subject to ongoing review under subsection (f), absent newly Page 4 DRS35119-RI-13Senate Bill 261-First Edition General Assembly Of North Carolina Session 2025 discovered evidence (i) that could not have been discovered by due diligence at an earlier time and (ii) that reasonably tends to show that a previous determination by the Commission that a material item of cost was just and reasonable and prudently incurred was erroneous, the public utility shall recover through rates in a general rate case conducted pursuant to G.S.

The petition shall contain a showingshowingof of need for the facility, an estimate of the construction costs, and the proposed construction schedule for the facility.

In making its determinations under this section, the Commission may consider whether the state in which the facilityfacilitywill willbesited besitedhashas issued acertificateorlicenseforconstructionofthefacilityandapprovedacertificateorlicenseforconstruction ofthefacilityand approved a construction cost estimate and construction schedule for the facility.

62-133(b)(1)c., the costs of construction that were actuallyactuallyincurred incurred prior to the cancellation and are found by the Commission to be reasonable and prudent, as provided in subsections (f2) and (f3) of G.S.

DRS35119-RI-13Senate Bill 261-First Edition Page 5 General Assembly Of North Carolina Session 2025 SECTION 4.

Page 6 DRS35119-RI-13Senate Bill 261-First Edition