Now that North Carolina General Assembly lawmakers have left the building for a summer break, it’s time to look back at energy policy highlights, lowlights, and everything in between from this year’s long session. The long session temporarily ended on June 30, but legislators are expected to return July 29 for one to three days of voting. In the Senate’s proposed adjournment resolution that Senators passed before they left, they laid out future dates to reconvene for veto override votes, nominations, and other specified issues. These dates are July 29, August 26, September 23, October 7, October 28, and November 5. The House did not adopt this resolution, deciding instead to hold no votes for two weeks and determine when to return later. There are 14 bills that were vetoed by the governor so far this session that are candidates for veto override votes.
The budget was at the top of the list of objectives for the long session, but the General Assembly did not yet pass a budget. In North Carolina, the state budget is biennial, meaning that it delegates funding for two fiscal years (starting on July 1 and ending on June 30 of the following year). As the first step in the budgetmaking process, the Consensus Revenue Forecast, released in February and further adjusted in May, revealed less revenue than anticipated. Combined with the enormous cost of rebuilding after Hurricane Helene, legislative leadership stated that this year’s budget will be tight. A total of $2.1 billion in state funding was appropriated in the aftermath of the disaster for hurricane recovery. The primary bills designating this funding were House Bill 47 / SL 2025-2 “Disaster Recovery Act of 2025 – Part I.” (signed into law in March) and House Bill 1012 / SL 2025-26 “Disaster Recovery Act of 2025 – Part II.” (signed into law in June).
The Senate passed its budget proposal in mid-April, followed by the House passing its different version before Memorial Day. The Senate’s $32.6 billion budget included a 1.25% raise for state employees, a 2.3% raise for teachers, $700 million toward Hurricane Helene relief, a previously planned 0.25% income tax cut, and cuts to state jobs and programs. House members proposed a $65 million budget plan which included an increase of $50,000 for the state-funded portion of teacher salaries, a 2.5% raise for state employees, a personal income tax rate cut from 4.25% to 3.99%, and the elimination of 3,000 vacant jobs in state government. Both proposals included sizable funding cuts, but there was no substantive agreement reached yet on the 2025 Appropriations Act amongst the conference committee members.
What does this mean now that July 1 has come and gone? The 2016 Appropriations Act included a Budget Stability and Continuity provision that authorizes state funding at the level of the previous year’s certified budget if the legislature does not pass a budget. So, state programs will continue to be funded at old levels. It is still possible that legislators may return and pass a budget, but we have seen budget gridlock in previous years result in no state budget for the biennium.
There was no shortage of energy-related bills filed this year, and many of them put clean energy on the defense. Senate Bill 266 “The Power Bill Reduction Act” became law in July 2025. The bill was originally filed by now-retired Sen. Paul Newton as Senate Bill 261 “Energy Security and Affordability Act.” SB266 went through several iterations before being passed, then vetoed by Gov. Josh Stein because of concerns about energy affordability and evidence showing that the bill could cost ratepayers up to $23 billion through 2050 due to higher fuel costs. The legislature voted to override the governor’s veto of SB266 in July. Now that SB266 is law, the 2030 interim carbon emissions reduction requirement that was established by HB951 in 2021 is eliminated. Further, Duke Energy is authorized to request rate increases outside of the annual ratemaking process for construction work in progress (CWIP) financing costs. Lastly, there are modifications to the fuel cost recovery process that shift costs from industrial customers to residential ratepayers.
Another alarming bill from this session is House Bill 729 “Farmland Protection Act.” This bill would phase out the 80% property tax abatement for solar systems by 2029. If passed, HB729 could have far-reaching negative impacts on the utility-scale solar industry by taking away market certainty for large solar development and changing the rules of the game for an industry that has brought billions of dollars in economic development to the state. In fact, phasing out this solar incentive would lead to a 500% increase in equipment taxes on existing and future solar projects. At the local level, counties have seen an average 1,801% increase in property tax revenue from solar development, which translates directly into expanding county services like schools and first responder resources. However, HB729 would result in counties losing out on this sizeable source of property tax revenue. It is clear that the elimination of this incentive could drive solar business away from the state entirely. While it was not taken up by the House, HB729 was approved by multiple House committees. It remains eligible to be taken up throughout the remainder of the 2025-26 legislative session. NCSEA remains opposed to this bill.
On a positive note, House Bill 814 “Power Infrastructure Resiliency & Eff. (PIRE)” represents a step forward in advancing cost-effective, timely grid improvements. The bill promotes the deployment of advanced conductors and grid-enhancing technologies by requiring transmission planning to be coordinated with energy planning and the fixing of rates in a manner to achieve the least-cost mix of generation and transmission. While HB814 did not move beyond the House Energy and Public Utilities committee, it received positive attention when it was heard in committee and in an educational meeting hosted by Pew Charitable Trusts and the Council of State Governments to raise awareness of the benefits of advanced transmission technologies. This bill did not make the May 8 crossover deadline, but NCSEA continues to explore opportunities to better integrate advanced transmission technologies into grid planning through legislative and regulatory avenues.
Some other energy-related bills from the long session include:
House Bills
- House Bill 131 “Reenact Solar Energy Tax Credit” – No substantial movement
This bill would allow North Carolinians to access a 35% state tax credit for qualifying solar energy equipment. The state’s tax credit expired in 2016, and this bill would bring it back.
- House Bill 638 “Equitable Escalation of Electricity Demand Act” – No substantial movement
This bill would require a new fee on all new electric and plug-in hybrid vehicle-charging stations and vehicles. It would also require new data centers that need dispatchable power to be responsible for its provision by contracting directly with the utility and would allow excess power to be sold onto the broader grid at wholesale rates, with the profits split between the utility and the demanding source. Since data center power procurement is a hot button issue these days, NCSEA is keeping an eye out to see if bills like this advance in the future to ensure that ratepayers are protected.
Senate Bills
- Senate Bill 730 “Expand CEPS/Nuclear and Hydro” – Passed Senate, awaiting action from the House
This bill would expand the Clean Energy Portfolio Standard (CEPS) to include existing nuclear and large hydroelectric power facilities. Meeting the CEPS entirely through old nuclear generation defeats the point of setting a standard and requiring adherence to it into the future as the utility would not have to do anything new to meet this standard. NCSEA opposes this bill.
So what’s next? The NC General Assembly may return to take up veto overrides over the next few months if the majority has the votes needed. Lawmakers may return in the fall to work on the budget again and try to reach an agreement between the chambers. After that, 2026 will be a so-called “short session” when normally the legislature would negotiate budget adjustments. If there isn’t any budget to adjust, there may be a renewed push for mini-budget bills to cover certain budget needs. Plenty of questions remain about the rest of 2025 and what we may see in 2026, but there will be elections for state legislators next year.