North Carolinians are facing more threats to our clean energy future at both the state and federal levels.
At the state level, there’s Senate Bill 266 (SB 266) — formerly Senate Bill 261 (SB 261) — a bad deal for our environment, our public health, and our wallets. And at the federal level, an effective proposed repeal of the Inflation Reduction Act clean energy tax credits imperils North Carolina’s clean energy boom just when we’re poised to benefit from it the most.
SB 266 modifies the state’s carbon reduction law, which requires the state’s monopoly utility, Duke Energy, to reduce carbon emissions by 70 percent by 2030 and to achieve carbon neutrality by 2050. With SB 266, those 2030 carbon reduction interim goals are stripped away and artificial limits are placed on clean, renewable energy resources, leaving gaping loopholes for Duke Energy to continue building polluting methane gas plants. Burning methane gas releases carbon dioxide, the primary greenhouse gas leading to climate change. It also produces ground-level ozone, which causes respiratory health issues, cancer, and heart disease.
SB 266 increases rates in two ways. The first is through an increase in Construction Work in Progress (CWIP) costs, which are levied on customers for planned gas and nuclear facilities that may never even come online. Our neighbors in South Carolina have already learned the financial risk of CWIPs — to the tune of a $9 billion debt — all for a nuclear plant that never produced electricity and that customers are still paying off. A second increase would come through changes in the way power costs are allocated to residential customers. This is technical, but EQ Research has shown that these changes would mean a 19 percent cost increase to ratepayers, or a statewide total of about $86.9 million. SB 266 is an all around bad deal.
Simultaneously, our state is seeing Inflation Reduction Act (IRA) clean energy investments come under threat, leading to potential increased costs to residents, job losses, and a slowdown of economic development. The federal 2025 budget reconciliation bill, now in the Senate, threatens hard won clean energy tax credits for households, individuals, and large-scale manufacturing operations — such as the Clean Electricity Production Credit and the Clean Electricity Investment Credit (originally planned to phase out in 2032, though this has now been accelerated to 2028). Effectively repealing clean energy manufacturing tax credits could cost tens of thousands of jobs and billions in investments and permanently damage North Carolina’s current clean energy boom.
In addition, the reconciliation bill would eliminate residential tax credits like the Energy Efficient Home Improvement Credit (EEHIC) and Residential Clean Energy Credit (RCEC), which have already had a significant impact on bill savings in this state. For example, 62,000 North Carolina families saved on average of $1,000 on taxes with the EEHIC and 26,000 households have saved over $4,000 on taxes with the RCEC. Almost a million households use propane, and they stand to lose the most if these tax credits are axed.
Our state deserves affordable, clean energy for all people. SB 266 and the proposed repeal of IRA tax credits are combining to imperil our state’s equitable clean energy transition at the expense of the health of people, the planet, and our collective economic well being.
