In order to meet the demands of North Carolina’s growing population, it is imperative that every corner of the state have access to efficient and affordable energy. Over the last year, North Carolina has been hit by several severe storms that left hundreds of thousands of people and businesses without power. Going forward, it is vital that there be a plan in place to predictably pay for storm recovery, so that utilities can swiftly restore power, customers can have basic needs met and communities can thrive. However, it is equally important that we modernize our energy infrastructure to make it stronger and more resilient in the face of these storms.
Senate Bill 559: Storm Securitization/Alt. Rates establishes mechanisms that serve both of those needs. After moving through both chambers of the General Assembly, the bill now sits with an appointed conference committee. As they work, we want to take this opportunity to provide clarification on the issues being debated.
Through storm securitization, Senate Bill 559 establishes a process to predictably pay for storm recovery through the formation of bonds, creating greater predictability for customers, utilities and the state regulator. The bill also includes an alternative rate making provision that gives the Utilities Commission the statutory authority to consider multi-year rates or banded rates. Awarding the Commission the authority to consider alternate cost recovery methods will help keep North Carolina competitive, while providing quicker access to cleaner energy and attractive new technologies benefiting all North Carolinians.
Contrary to some misconceptions, this bill in no way forces the Commission to set proposed multi-year rates. It simply gives them the ability to consider them. As such, it does not order the Commission to adhere to the time frames proposed in the bill, and if the Commission chooses, it does not have to wait for a new rate case to make changes. It can also deny proposed rate changes if it deems fit. In addition, nothing in this proposed legislation in any way limits the existing open public comments on a proposed rate change or rate plan.
Earlier this year, we asked our members for feedback on Senate Bill 559, which prompted a thoughtful dialogue around modern ratemaking tools. For those of you that shared feedback with us, we greatly appreciate your insight. Since that time, we have been encouraged by the collaborative process to come up with the reforms now included in Senate Bill 559. As that collaborative process continues, we will continue to keep you updated on this issue.