Energy and Housing Affordability Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 1192

Short Title: Energy and Housing Affordability Act. (Public)
Sponsors: Representatives Schietzelt, Moss, and Paré (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
May 5, 2026
*H1192-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO MODIFY THE STATUTES GOVERNING COST RECOVERY FOR 2
FUEL-RELATED CHARGES , TO PROMOTE THE DEV ELOPMENT OF ON -SITE 3
GENERATION CAPACITY BY LARGE ELECTRICITY CUSTOMERS, AND TO 4
APPROPRIATE FUNDS TO THE WORKFORCE HOUSING LOAN PROGRAM. 5
The General Assembly of North Carolina enacts: 6
7
PART I. FUEL COST SHARING 8
SECTION 1. G.S. 62-133.2 reads as rewritten: 9
"§ 62-133.2. Fuel and fuel-related charge adjustments for electric utilities. 10
(a) The Commission shall permit anAn electric public utility that generates electric power 11
by fossil fuel or nuclear fuel shall request Commission approval to charge an increment or 12
decrement as a rider to its rates for changes in the cost of fuel and fuel -related costs used in 13
providing its North Carolina customers with electricity from the cost of fuel and fuel-related costs 14
established in the electric public utility's previous general rate case on the basis of cost per 15
kilowatt hour.hour, provided that the Commission establishes a fuel cost and purchased power 16
cost sharing mechanism as provided in subsection (d3) of this section. 17
… 18
(c) For purposes ofAt least 30 days prior to the annual hearing, each electric public utility 19
shall submit to the Commission verified annualized information and data in such form and detail 20
as the Commission may require, for an historic 12-month test period, relating to: 21
(1) Cost of fuel and fuel -related costs used in each generating facility owned in 22
whole or in part by the utility. 23
(2) Fuel procurement practices and fuel inventories for each facility.facility, 24
including unredacted fuel supply agreements. 25
(3) Burned cost of fuel used in each generating facility. 26
(4) Plant capacity factor for each generating facility. 27
(5) Plant availability factor for each generating plant. 28
(6) Generation mix by types of fuel used. 29
(7) Sources and fuel cost component of purchased power used. 30
(8) Recipients of and revenues received for power sales and times of power sales. 31
(9) Test period kilowatt -hour sales for the utility's total system and on the total 32
system separated for North Carolina jurisdictional sales. 33
General Assembly Of North Carolina Session 2025
Page 2 House Bill 1192-First Edition
(10) Procurement practices and inventories for: fuel burned and for ammonia, lime, 1
limestone, urea, dibasic acid, sorbents, and catalysts consumed in reducing or 2
treating emissions. 3
(11) The cost incurred at each generating facility of fuel burned and of ammonia, 4
lime, limestone, urea, dibasic acid, sorbents, an d catalysts consumed in 5
reducing or treating emissions. 6
(12) Any net gains or losses resulting from any sales by the electric public utility 7
of fuel or other fuel-related costs components. 8
(13) Any net gains or losses resulting from any sales by the electr ic public utility 9
of by-products produced in the generation process to the extent the costs of 10
the inputs leading to that by-product are costs of fuel or fuel-related costs. 11
(d) The Commission shall provide for notice of a public hearing with reasonable an d 12
adequate time for investigation and for all intervenors to prepare for hearing. At the hearing the 13
Commission shall receive evidence from the utility, the Public Staff, and any intervenor desiring 14
to submit evidence, and from the public generally. In reaching its decision, the Commission shall 15
consider all evidence required under subsection (c) of this section as well as any and all other 16
competent evidence that may assist the Commission in reaching its decision including changes 17
in the cost of fuel consu med and fuel -related costs that occur within a reasonable time, as 18
determined by the Commission, after the test period is closed. The Subject to the cost sharing 19
mechanism provided in subsection (d3) of this section, the Commission shall incorporate in its 20
cost of fuel and fuel -related costs determination under this subsection the experienced 21
over-recovery or under -recovery of reasonable costs of fuel and fuel -related costs prudently 22
incurred by the electric public utility, based upon the prudent standards set pursuant to subsection 23
(d1) of this section, in fixing an increment or decrement rider. Upon request of the electric public 24
utility, the Commission shall also incorporate in this determination the experienced 25
over-recovery or under-recovery of costs of fuel and fuel-related costs through the date that is 30 26
calendar days prior to the date of the hearing, provided that the reasonableness and prudence of 27
these costs shall be subject to review in the utility's next annual hearing pursuant to this section. 28
The Commission shall use deferral accounting, and consecutive test historical 12-month periods, 29
in complying with this subsection, and the over -recovery or under -recovery portion of the 30
increment or decrement shall be reflected in rates for 12 months, notwithstanding any changes in 31
the base fuel cost in a general rate case. Any experienced over -recovery or under -recovery of 32
reasonable fuel and fuel-related costs prudently incurred shall accrue interest at the commercial 33
paper rate as identified by the F ederal Reserve for A2/P2 nonfinancial issuers, or reasonable 34
successor thereto, on a weighted average basis over the applicable time period. The burden of 35
proof as to the correctness and reasonableness of the charge and as to whether the cost of fuel 36
and f uel-related costs were reasonably and prudently incurred shall be on the utility. The 37
Commission shall allow only that portion, if any, of a requested cost of fuel and fuel-related costs 38
adjustment that is based on adjusted and reasonable cost of fuel and fuel-related costs prudently 39
incurred under efficient management and economic operations. In evaluating whether cost of fuel 40
and fuel-related costs were reasonable and prudently incurred, the Commission shall apply the 41
rule adopted pursuant to subsection ( d1) of this section. To the extent that the Commission 42
determines that an increment or decrement to the rates of the utility due to changes in the cost of 43
fuel and fuel-related costs over or under base fuel costs established in the preceding general rate 44
case is just and reasonable, the Commission shall order that the increment or decrement become 45
effective for all sales of electricity and remain in effect until changed in a subsequent general rate 46
case or annual proceeding under this section. 47
… 48
(d3) The Commission shall establish, by order or rule, a fuel cost and purchased power 49
cost sharing mechanism applicable to each electric public utility subject to this section. The 50
mechanism shall operate as follows: 51
General Assembly Of North Carolina Session 2025
House Bill 1192-First Edition Page 3
(1) Baseline. – The fuel cost and purchased power cost baseline for each annual 1
hearing shall be the total fuel and purchased power costs, on a per -kilowatt 2
hour basis, established in the electric public utility 's most recent 3
Commission-approved fuel forecast and fuel factors. 4
(2) Variance Calculation. – At each annual hearing under subsection (b) of this 5
section, the Commission shall compare the electric public utility's actual fuel 6
and p urchased power costs for the historic 12 -month test period to the 7
baseline. The difference betw een actual costs and the baseline, whether an 8
over-expenditure or a savings, shall constitute the variance. 9
(3) Sharing Allocation. – Of the variance determined pursuant to subdivision (2) 10
of this subsection, eighty percent (80%) shall be recovered from or credited to 11
customers through the increment or decrement rider, and twenty percent 12
(20%) of the variance shall be recovered from or credited to the electric public 13
utility's shareholders. Where actual costs exceed the baseline, the utility 's 14
shareholders shall absorb twenty percent (20%) of the variance and may not 15
recover that portion from customers. Where actual costs are below the 16
baseline, the utility 's shareholders shall retain twenty percent (20% ) of the 17
variance as a shareholder benefit, and eighty percent (80%) shall be credited 18
to customers through a reduction in the rider. 19
(4) Prudence Review. – The sharing allocation in subdivision (3) of this 20
subsection applies only to the portion of any variance that the Commission 21
finds was reasonably and prud ently incurred. Any costs found to be 22
unreasonably or imprudently incurred shall be disallowed in full and may not 23
be recovered from customers. The twenty percent (20%) shareholder share 24
under subdivision (3) of this subsection is not a cap on disallowance. The 25
Commission reta ins full authority to disallow imprudently incurred costs 26
beyond that share. 27
(5) Annual True -Up. – The twenty percent (20%) shareholder share of any 28
over-expenditure variance shall be reflected as a reduction to the increment or 29
decrement rider in the annual hearing in which it is determined. The 30
Commission shall establish procedures for the accounting and reporting of 31
shareholder shares and customer credits under this subsection. The fuel cost 32
and purchased power cost sharing mechanism shall not be calculated on actual 33
over- and under-recovered amounts reported to the Commission pursuant to 34
subsection (d2) of this section. 35
…." 36
37
PART II. INDUSTRIAL ENERGY INDEPENDENCE 38
SECTION 2. The General Assembly finds that: 39
(1) North Carolina's electric public utilities project demand growth driven by 40
large commercial and industrial load additions at a rate that requires new tools 41
to manage grid costs, maintain reliability, and protect existing ratepayers. 42
(2) Large industrial a nd commercial customers who develop on -site electric 43
generation capacity reduce the volume of grid infrastructure that must be built 44
and paid for by all ratepayers. 45
SECTION 3.(a) Article 7 of Chapter 62 of the General Statutes is amended by adding 46
a new section to read: 47
"§ 62-159.5. Bring Your Own Generation (BYOG) Program. 48
(a) Definitions. – For purposes of this section, the following definitions apply: 49
(1) Bring Your Own Generation or BYOG. – An arrangement under which an 50
eligible large customer develops, owns, or contracts for on -site generation 51
General Assembly Of North Carolina Session 2025
Page 4 House Bill 1192-First Edition
capacity and connects that capacity to the electric grid for the purpose of 1
serving some or all of the customer 's own load, and providing available 2
capacity as a grid service resource. 3
(2) BYOG interconnection agreement. – A standardized agreement governing the 4
technical and commercial terms under which an eligible large customer 's 5
on-site generation capacity connects to the electric public utility's distribution 6
or transmission system. 7
(3) Eligible large customer. – An electric utility customer with a peak demand of 8
one megawatt (MW) or greater , or at some other level of peak d emand as 9
defined by rule or order of the Commission. 10
(4) Grid service resource. – Any on-site generation capacity or controllable load 11
made available by an eligible large customer under a grid services agreement 12
to the electric public utility for dispatch, curtailment, or grid -balancing 13
purposes. 14
(5) Grid services agreement. – An agreement between an eligible large customer 15
and an electric public utility establishing the terms under which the customer's 16
grid service resources may be dispatched by the utility. 17
(6) On-site generation capacity. – An electric generating facility, including solar 18
photovoltaic systems, batter energy storage systems, fuel cells, combined heat 19
and power systems, or any combination thereof, located on or adjacent to an 20
eligible large customer's premises and used for the primary purpose of serving 21
that customer's electricity needs. 22
(b) Application. – Each electric public utility shall file with the Commission an 23
application requesting approval of a Bring Your Own Generation Program applicable to eligible 24
large customers. Each electric public utility 's application shall provide standardized terms and 25
conditions for (i) an interconnection agreement with participating eligible large customers 26
connecting on-site generation capacity and (ii) a grid services agreement for participating eligible 27
large customers to offer grid service resources to the utility. The BYOG Program application 28
shall also include rates and interconnection fees applicable to eligible large customers, in addition 29
to a description of the cost allocation method used to establish rates under the program. Eligible 30
large customers who elect to participate in the voluntary BYOG Program may also elect to make 31
the customer's on-site generation capacity or controllable load available to the electric public 32
utility as a grid service resource under the terms of a grid services agreement. 33
(c) Rate Treatment for Participating Customers. – Each electric public utility shall file 34
for Commission approval rates for electric services applicable to eligible large customers 35
participating in the BYOG Program. The rates approved by the Commission shall: 36
(1) Reflect the reasonable costs attributable to serving eligible large load 37
customers, including the costs of interconnecting on -site generation capacity 38
and the costs of administering the Program. 39
(2) Reflect the benefits that on-site generation capacity and grid service resources 40
provide to the electric power system, including avoided transmission and 41
distribution infrastructure costs, avoided capacity costs, and the value of 42
dispatchable load flexibility during grid stress events. 43
(3) Not result in a net cost increase for residential and small commercial 44
customers. 45
(d) Interconnection Processing. – An electric public utility shall process applications 46
from eligible large customers to voluntary participate in the BYOG Program in accordance with 47
the following schedule: 48
(1) No later than 10 days following receipt of a BYOG application, the electric 49
public utility shall review the application for completeness and notify the 50
General Assembly Of North Carolina Session 2025
House Bill 1192-First Edition Page 5
applicant of receipt and whether any additional information is necessary for 1
the application to be considered complete. 2
(2) No later than 60 days following receipt of a complete BYOG application, the 3
electric public utility shall conduct a technical feasiibliity review and provide 4
the customer with a written feasibility determination. 5
(3) No later than 90 days following receipt of a complete BYOG application, the 6
electric public utility shall enter into a BYOG interconnection agreement with 7
the eligible lar ge customer, except for good cause as demonstrated to the 8
Commission. 9
(4) No later than 180 days after entering a BYOG interconnection agreement, the 10
electric public utility shall complete the physical interconnection of the 11
eligible large customer 's approved -on-site generation capacity, except for 12
good cause as demonstrated to the Commission. 13
(e) State Agency Coordination. – The Department of Commerce, in consultation with the 14
State Energy Office and the Department of Environmental Quality, shall develop the following: 15
(1) A single point -of-contact process through which eligible large customers 16
seeking to develop on -site generation capacity may coordinate with relevant 17
State agencies regarding applicable permits and approvals. 18
(2) A model permit checklist identifying all State-level permits, registrations, and 19
approvals that may be required for on -site generation capacity of different 20
technologies at different scales. 21
(f) Local Permitting. – Notwithstanding any other provision of law, a ny local 22
government development regulation that imposes a permit requirement applicable to the 23
construction of new on-site generation capacity shall be subject to the following: 24
(1) The permit application shall be available in an electronic format. 25
(2) As applicable to on-site generation capacity with a nameplate capacity equal 26
or less than five megawatts (MW), the local government shall issue a final 27
decision approving or denying the development permit within 30 business 28
days of receiving a complete application. 29
(3) As applicable to on-site generation capacity with a nameplate capacity greater 30
than five megawatts (MW), the local government shall issue a final decision 31
approving or denying the development permit within 60 business days of 32
receiving a complete application. 33
(4) The local government shall only apply such land use requirements for on-site 34
generation capacity that is reasonably related to public safety, building code 35
compliance, or compatibility with local land use plans. 36
(g) Electric Public Utility Report. – An electric public utility shall file with the 37
Commission no later than January 1 each year a report on the BYOG Program during the prior 38
year. The report shall include each of the following: 39
(1) The number of BYOG Program applications received, approved, denied, and 40
pending. 41
(2) The total nameplate capacity of all on-site generation capacity interconnected 42
under the BYOG Program, disaggregated by technology type. 43
(3) The number of grid services agreements e ntered between the electric public 44
utility and eligible large customers, the amount of aggregate capacity included 45
within those agreements, and the amount of energy dispatched under these 46
agreements. 47
(4) The total compensation paid to eligible large customers for grid service 48
resources provided to the electric public utility. 49
(5) An assessment of the impact of the BYOG Program on system peak demand, 50
avoided infrastructure costs, and ratepayer costs. 51
General Assembly Of North Carolina Session 2025
Page 6 House Bill 1192-First Edition
(h) Commission Report ; Program Review. – By no later than March 1 each year t he 1
Commission shall submit to the General Asse mbly a summary of the reports filed b y electric 2
public utilities as provided in subsection (g) of this section, along with any recommendations for 3
modifying the BYOG Program." 4
SECTION 3.(b) No later than 180 days after the effective date of this section, an 5
electric public utility shall submit the application as required by G.S. 62-159.5(b), as enacted by 6
subsection (a) of this section. 7
SECTION 3.(c) No later than 180 days after the effect ive date of this section, t he 8
Department of Commerce shall develop the single point-of-contact process and the model permit 9
checklist required under G.S. 62-159.5(e), as enacted by subsection (a) of this section. 10
SECTION 3.(d) This section is effective when it becomes law. 11
12
PART III. APPROPRIATION AND EFFECTIVE DATE 13
SECTION 4.(a) There is appropriated from the General Fund to the North Carolina 14
Housing Finance Agency the sum of thirty five million dollars ($35,000,000) in nonrecurring 15
funds for the 2026-2027 fiscal year to be allocated to the Workforce Housing Loan Program. 16
SECTION 4.(b) This section becomes effective July 1, 2026. 17
SECTION 5. Except as otherwise provided, this act is effective when it becomes 18
law. 19