North Carolina’s Senate Bill 266: A New Law That Could Raise or Stabilize Power Rates, Depending on Who You Ask
New law opens a pathway to smarter coal plant retirements and financial stability, but also risks favoring natural gas expansion over clean energy investment.
Holly Springs, NC, Aug. 8, 2025 — A controversial new energy law, Senate Bill 266 (file), has officially taken effect in North Carolina. The legislation reshapes how utilities retire coal plants, finance new power generation, and set electricity rates, with supporters calling it a path to cost savings and critics warning of potential $23 billion in consumer costs.
The bill removes a legally binding carbon reduction deadline, expands what utilities can recover from ratepayers, and introduces tools like securitization to manage the transition away from coal. Whether SB 266 ultimately increases or stabilizes energy costs may depend heavily on how regulators apply it and how energy markets evolve.
The Path to Law
The Bill, introduced in March 2025, quickly gained traction with support from major utilities like Duke Energy. Despite vocal opposition and a veto (file) from Governor Josh Stein, the General Assembly voted to override the veto on July 29th.
How Local Lawmakers Voted:
✅ Erin Paré (R, District 37 - Holly Springs) — Voted Yes
❌ Maria Cervania (D, District 41 - Apex) — Voted No
❌ Julie von Haefen (D, District 36 - Fuquay-Varina) — Voted No
❌ Gale Adcock (D, Senate District 16) — Voted No
❌ Sydney Batch (D, Senate District 17) — Voted No
❌ Lisa Grafstein (D, Senate District 13) — Voted No
What the Law Does
Key provisions of SB 266:
Eliminates the 2030 carbon reduction deadline previously part of state law.
Allows early cost recovery for the construction of new baseload energy plants (e.g., natural gas).
Authorizes securitization to finance retiring coal plants through ratepayer-backed bonds.
Changes rate-setting rules, including multi-year rate plans with less frequent regulatory review.
Expands pass-through fuel costs, giving utilities broader flexibility to recover expenses.
North Carolina’s Current Energy Mix
As of 2024, North Carolina's electricity generation comes from:
Natural Gas: ~41%
Nuclear: ~32–33%
Coal: ~11–13%
Solar (utility + small-scale): ~9–10%
Hydroelectric: ~3%
Biomass & Wind: <2%
Possible Outcomes for Consumers
Positive: Utilities use securitization to shut down aging coal plants faster, reduce long-term system costs, and deploy lower-emission technologies. Early recovery of financing costs enables utilities to access cheaper credit, potentially lowering future bills.
Negative: Utilities shift financial risks to customers while doubling down on natural gas. Without strong regulatory oversight, utilities could raise rates more frequently and slow the shift to renewables, locking in fossil fuel infrastructure.
What Other States Have Done
North Carolina isn't the first to embrace tools like securitization:
New Mexico (2019): Used securitization to retire the San Juan Generating Station. Proceeds funded solar projects, workforce transition, and local aid.
Michigan (2020): Consumers Energy securitized $688M to close a coal plant, saving ratepayers $124M.
Wisconsin (2020): We Energies securitized pollution-control costs, yielding $40M in customer savings over 15 years.
Colorado (2019): Passed a law like SB 266 with tighter oversight and consumer protections, including ratepayer impact reviews.
California, Hawaii, and Washington: Have taken more aggressive steps by banning coal, requiring clean energy mandates, or setting stricter emissions standards.
Compared to these examples, SB 266 gives North Carolina regulators more discretion but fewer consumer guarantees or clean energy mandates.
Final Thought
The outcome of SB 266 depends not only on its language but on how the Utilities Commission implements the law and how utilities choose to act. While the law opens a pathway to smarter coal plant retirements and financial stability, it also risks favoring natural gas expansion over clean energy investment.
For residents in Wake County communities like Holly Springs, Apex, and Fuquay-Varina, the law may eventually affect electricity rates, energy sources, and the pace of North Carolina's transition to a cleaner grid.