Senate Bill 266’s rollbacks of carbon emission reduction targets originally outlined in House Bill 951 could have major financial implications for North Carolina ratepayers, according to a new study released by NC State University.
SB266 — “The Power Reduction Act” — was vetoed by Gov. Josh Stein on July 2, 2025, after passing the NC House and Senate. The bill would reshape the state’s energy policy and impact residents’ power bills for decades. It narrows the “Construction Work In Progress” (CWIP) authority (originally in SB261) for Duke Energy, so it only applies to construction financing costs for new baseload power plants; eliminates the HB951 interim carbon emissions reduction target; shifts fuel costs from commercial/industrial customers to residential customers; and modifies performance-based regulation, multiyear rate plans, and coal plant retirement securitization.
Proponents argue this rollback gives utilities more flexibility to meet future energy demands. However, the new study from NC State says the opposite: removing the 2030 target could expose North Carolina families and businesses to up to $23 billion in higher natural gas costs through 2050. At a time of record rate increases, SB266 could lock ratepayers into greater financial risk from volatile fossil fuel markets.
“Maintaining the interim goal [spelled out in HB951] helps limit exposure to volatile fuel markets and protects ratepayers from sharp increases in electricity bills,” the researchers wrote.
The study explains that North Carolina is especially vulnerable to higher natural gas costs because the state imports all of its supply through pipelines with limited capacity. Rapid growth in electricity demand from data centers and industrial development is expected to further strain this infrastructure, while national and global factors such as hurricanes, geopolitical tensions, and rising LNG exports could tighten supply and drive prices up. As a result, relying more heavily on natural gas increases exposure to market volatility and increases the likelihood of significant rate hikes for consumers.
“This latest study from NC State University re-emphasizes the longstanding concerns held by NCSEA about Senate Bill 266, which would lead to significant rate increases for ratepayers across North Carolina,” says Cassie Gavin, Director of Policy at NCSEA. “Just removing interim planning targets could cost North Carolina ratepayers $23 billion in additional fuel costs, on top of the $20–$80 million in additional annual costs associated with shifting fuel recovery from commercial to residential customers. This analysis puts a finer point on the need to maintain clear, definitive planning targets to ensure near- and long-term investments in generation resources that are truly least-cost for ratepayers. Instead of focusing on ‘Power Bill Reductions,’ this legislation increases risk exposure and costs at a time already marked with significant uncertainty. Senate Bill 266 is a double whammy for North Carolina ratepayers, who could also see an 18% increase in rates should the federal reconciliation bill pass as proposed. At a time of high inflation, high cost of living, and large increases in energy demand, Senate Bill 266 is the wrong move for the people of North Carolina.”
You can read more about SB266 and what it could mean for North Carolina’s energy future here.