North Carolina Consumer Protection Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 720

Short Title: North Carolina Consumer Protection Act. (Public)
Sponsors: Senators Meyer and Murdock (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S720-v-1*
A BILL TO BE ENTITLED 1
AN ACT THAT REVISES CERTAIN DEFINITIONS IN PUBLIC UTILITY LA W AND 2
ADDS ADDITIONAL REQUIREMENTS TO PROTECT RATEPAYERS FROM PAYING 3
UNJUST OR UNREASONABLE FEES TO PUBLIC UTILITIES. 4
The General Assembly of North Carolina enacts: 5
SECTION 1. G.S. 62-133.8 reads as rewritten: 6
"§ 62-133.8. Clean Energy and Energy Efficiency Portfolio Standard (CEPS). 7
(a) Definitions. – As used in this section: 8
(1) Advertising. – Any promotional activity aimed at increasing a public utility's 9
visibility, reputation, or profitability. This includes media campaigns, digital 10
marketing, and other promotional materials that do not address public service 11
issues or conservation efforts directly approved by a State or federal agency. 12
Advertising does not include any of the following: 13
a. Public messages that the public utility is directed to publish by a 14
federal, State, or local agency. 15
b. Public messages providing information on safety measures, 16
emergency conditions, or service interruptions. 17
(1)(1a) "Clean energy facility" means a Clean energy facility. – A renewable energy 18
facility, a nuclear energy facility, including an uprate to a nuclear energy 19
facility, or a fusion energy facility. 20
(1a)(1b) "Clean energy resource" means renewable Clean energy resource. – 21
Renewable energy resources, nuclear energy resources, including an uprate to 22
a nuclear energy facility, and fusion energy. 23
(1b)(1c) "Combined heat and power system" means a Combined heat and power 24
system. – A system that uses waste heat to produce electric ity or useful, 25
measurable thermal or mechanical energy at a retail electric customer's 26
facility. 27
(1d) Commission. – The North Carolina Utilities Commission created under 28
G.S. 62-10, which regulates public utilities in North Carolina. 29
(2) "Demand-side management" means activities, Demand-side management. – 30
Activities, programs, or initiatives undertaken by an electric power supplier 31
or its customers to shift the timing of electricity use from peak to nonpeak 32
demand periods. "Demand-side management" includes, but is not limited to, 33
load management, electric system equipment and operating controls, direct 34
load control, and interruptible load. 35
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 720-First Edition
(3) "Electric power supplier" means a Electric power supplier. – A public utility, 1
an electric membership corporation, or a municipality that sells electric power 2
to retail electric power customers in the State. 3
(3a) "Electricity demand reduction" means a Electricity demand reduction. – A 4
measurable reduction in the electricity demand of a retail electric customer 5
that is voluntary, under the real -time control of both the electric power 6
supplier and the retail electric customer, and measured in real time, using 7
two-way communications devices that communicate on the basis of standards. 8
(4) "Energy efficiency measure" means a n Energy efficiency measure. – An 9
equipment, physical, or program change implemented after January 1, 2007, 10
that results in less energy used to perform the same function. "Energy 11
efficiency measure" includes, but is not limited to, energy produced from a 12
combined heat and power system that uses non -clean energy resources. 13
"Energy efficiency measure" does not include demand-side management. 14
(4a) "Fusion" means a Fusion. – A reaction in which at least one heavier, more 15
stable nucleus is produced from two ligh ter, less stable nuclei, typically 16
through high temperatures and pressures, emitting energy as a result. 17
(4b) "Fusion energy" means the Fusion energy. – The product of fusion reactions 18
inside a fusion device, used for the purpose of generating electricity or other 19
commercially usable forms of energy. 20
(4c) Lobbying. – Any action undertaken to influence or attempt to influence 21
legislative or executive action, or both, as defined under G.S. 120C-100, as 22
well as any activity undertaken to influence regulatory m atters, such as 23
rate-making. 24
(4c)(4d) "New clean energy facility" means:New clean energy facility. – Includes 25
either of the following: 26
a. A new renewable energy facility; orfacility. 27
b. Facilities placed into service on or after January 1, 2007, which are 28
either (i) a nuclear energy facility, including an uprate to a nuclear 29
energy facility, or (ii) a fusion energy facility. 30
(5) "New renewable energy facility" means a New renewable energy facility. – A 31
renewable energy facility that either:includes one of the following: 32
a. Was placed into service on or after January 1, 2007. 33
b. Delivers or has delivered electric power to an electric power supplier 34
pursuant to a contract with NC GreenPower Corporation that was 35
entered into prior to January 1, 2007. 36
c. Is a hydroelectric power facility with a generation capacity of 10 37
megawatts or less that delivers electric power to an electric power 38
supplier. 39
(5a) Political influence activities. – Includes any of the following: 40
a. Any activity intended to directly or indirectly affect or attempt to affect 41
the decisions or actions of public officials, including , but not limited 42
to, contributions or direct expenditures to political campaigns, parties, 43
or advocacy groups. 44
b. An activity for the purpose of directly or indirectly influencing public 45
opinion with respect to (i) legislation, regulations, or ordinances, (ii) 46
elections, (iii) refe renda, or (iv) rate setting of electrical or gas 47
corporations. 48
c. An activity for the purpose of directly or indirectly influencing either 49
of the following: 50
General Assembly Of North Carolina Session 2025
Senate Bill 720-First Edition Page 3
1. The possible adoption of federal, State, or local legislation, 1
regulations, or ordinances. 2
2. The possible repeal or modification of federal, State, or local 3
legislation, regulations, or ordinances. 4
d. An activity for the purpose of directly or indirectly influencing 5
elections or referenda, or appointments of public officials. 6
e. An activity for the purpose of directly or indirectly influencing the 7
approval, modification, or revocation of franchises of public utilities. 8
f. An activity undertaken in support of lobbying or legislative action, 9
including, but not limited to , research, analysis, preparation, or 10
planning, whether done directly or indirectly on behalf of the public 11
utility. 12
(5b) Public official. – A decision maker within an administrative agency or 13
legislative body at the local, State, or federal level, and the staff that support 14
the decision maker's policy development. 15
(5c) Public utility. – A utility company providing services related to electricity, 16
gas, water, or telecommunications as defined in G.S. 62-3. 17
(5d) Rate base. – The value of a public utility's property that is used to determine 18
its rate of return and the revenues required to cover operating costs and 19
provide a reasonable return as defined under G.S. 62-133. 20
(5e) Regulatory matters. – Any issues, processes, or activities directly related to 21
the oversight, implementation, or enforcement of statutes, rules, or policies 22
administered by government agencies or regulatory bodies such as the North 23
Carolina Utilities Commission or Department of Environmental Quality. This 24
includes actions involving compliance with regulatory standards, the 25
establishment or amendment of regulations, enforcement actions, rulemaking 26
processes, and participation in administrative or legal proceedings concerning 27
the regulation of public utilities. 28
(6) "Renewable energy certificate" means a Renewable energy certificate. – A 29
tradable instrument that is equal to one megawatt hour of electricity or 30
equivalent energy supplied by a clean energy facility, new clean energy 31
facility, or reduced by implementation of an energy efficiency measure that is 32
used to track and verify compliance with the requirements of this section as 33
determined by the Commission. A "renewable energy certificate" does not 34
include the related emission reductions, including, but not limited to, 35
reductions of sulfur dioxide, oxides of nitrogen, mercury, or carbon dioxide. 36
(7) "Renewable energy facility" means a Renewable energy facility. – A facility, 37
other than a hydroelectric power facility with a generation capacity of more 38
than 10 megawatts, that either:includes one of the following: 39
a. Generates electric power by the use of a renewable energy resource. 40
b. Generates useful, measurable combined heat and power derived from 41
a renewable energy resource. 42
c. Is a solar thermal energy facility. 43
(8) "Renewable energy resource" means a Renewable energy resource. – A solar 44
electric, solar thermal, wind, hydropower, geothermal, or ocean current or 45
wave energy resource; a biomass resource, including agricultural waste, 46
animal waste, wood waste, spent pulping liquors, combustible residues, 47
combustible liquids, combustible gases, energy crops, or landfill methane; 48
waste heat derived from a renewable energy resource and used to produce 49
electricity or useful, measurable thermal energy at a retail electric customer's 50
facility; or hydrogen derived from a renewable energy resour ce. "Renewable 51
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 720-First Edition
energy resource" does not include peat, a fossil fuel, or nuclear energy 1
resource. 2
(9) Test-year method. – A method of determining the appropriate rate adjustments 3
for public utilities based on the actual and projected costs, as outlined in 4
G.S. 62-133. 5
…." 6
SECTION 2. G.S. 62-131 reads as rewritten: 7
"§ 62-131. Rates must be just and reasonable; service efficient. 8
(a) Every rate rate, toll, charge, schedule made, demanded or received by any public 9
utility, or by any two or more public utilities jointly, shall be just and reasonable. Such rates, 10
tolls, or charges will only be deemed reasonable if all of the following criteria are satisfied: 11
(1) Revenue limits . – The public utility demonstrates that the aggregate rates 12
provide revenues that are no greater than the actual costs incurred in serving 13
North Carolina customers, including reasonable normalization for 14
nonrecurring costs and future adjustments as approved by the Commission, 15
and a fair return on the public utility's rate base. 16
(2) Prohibited costs. – The public utility demonstrates that no part of its rates, 17
tolls, or charges includes recovery of costs related to the following: 18
a. Advertisements if any portion of the message in an advertisement is 19
considered advertising. 20
b. Lobbying, grassroots lobbying, executive or legislative advocacy, 21
regardless of whether such lobbying or advocacy is undertaken 22
directly or indirectly on behalf of a public utility. 23
c. Contributions or gifts to political candidates, political parties, political 24
or legislative committees or any committee or organization working to 25
influence legislative activities, referendum petitions, or elections. 26
d. Membership dues, sponsorships, or contributions to any business or 27
industry trade association, group, or tax -exempt related entity, 28
including, but not limited to , chambers of commerce, charitable 29
organizations, charities managed by the public utility or affiliated 30
interest, industry groups, and organizations classified under section 31
527 of the Internal Revenue Code. 32
e. Political influence activities. 33
f. Legal costs and litigation related to federal, State, or local regulations, 34
legislation, ordinances, or regulatory proceedings, including actions 35
against regulatory bodies or legislative decisions. 36
g. Travel, lodging, food, and beverage expenses for the utility's board of 37
directors, officers, or for the parent company 's board or officers, 38
including any related expenses for affiliate boards or officers. 39
h. Any costs associated with investor relations activities, including , but 40
not limited to , communication, reporting, or any other promotional 41
activities intended for investors or stakeholders. 42
i. Compensation for any employee whose time is allocated to activities 43
related to lobbying, legislative action, political influence activities, or 44
advertising, marketing, or communications seeking to influence public 45
opinion. 46
j. Entertainment or gifts. 47
k. Leasing, owning, or chartering an aircraft for use by the public utility's 48
board of directors or officers, or those of a parent company or affiliate. 49
l. Expenses related to services not regulated by the Commission. 50
General Assembly Of North Carolina Session 2025
Senate Bill 720-First Edition Page 5
m. Any other lobbying or political activity that is conducted in support of 1
a candidate committee, a political committee, or an inaugural 2
committee, or in support of or opposition to a candidate for public 3
office, regardless of whether such actions are undertaken directly or 4
indirectly on behalf of a public utility. 5
(3) Fair classifications. – Rates must equitably classify customer groups and 6
ensure fairness across all ca tegories, including residential, commercial, and 7
industrial customers. 8
(b) Every public utility shall furnish adequate, efficient and reasonable service. 9
(c) In determining costs of service, the Commission may apply a test -year method of 10
estimating revenue needs, utilizing appropriate normalization and adjustments as required. 11
(d) The Commission may approve special rates or contracts for individual customers or 12
customer classes if it determines that such measures are in the public interest, do not unreasonably 13
burden other customers, and align with State emissions reductions goals." 14
SECTION 3. Article 7 of Chapter 62 of the General Statutes is amended by adding 15
the following new sections to read: 16
"§ 62-131A. Prohibited cost recovery; annual reporting. 17
(a) Public utilities regulated under this Chapter cannot attempt to recover in rates any 18
costs related to the Prohibited Costs listed in G.S. 62-131(a)(2). 19
(b) By July 1 of each year, regulated public utilities shall submit to the Commission an 20
annual report detailing all of the following: 21
(1) A written, itemized description of any expenses associated with prohibited 22
activities in G.S. 62-131(a)(2). 23
(2) For each expense, the report must include the date, the payee, the amount, and 24
a description of the purpose of the expense. 25
(3) Third-party expenditures for prohibited activities, with details sufficient to 26
describe the nature of the expenditure regarding payees and purposes. 27
(4) A list of all divisions, departments, or other organizational employee groups 28
within the public utility that performs activities associated with 29
G.S. 62-131(a)(2). For each organizational employee group, the public utility 30
shall include a list of employees who work in that group. For each employee, 31
the public utility shall include the employee 's job title, a job description 32
sufficient to describe the employee 's responsibilities, each activity described 33
in G.S. 62-131(a)(2) in which the employee engages, and a description 34
sufficient to describe the nature of any such activity, the total annual 35
compensation for the employee, the hours allocated to the activity, the 36
percentage of annual compensation paid for work associated with the 37
activities described in G.S. 62-131(a)(2), and the percentage of annual 38
compensation recoverable from ratepayers. 39
(5) Any additional information that the Commission deems relevant. 40
(c) The Commission shall review the reports submitted under this section, ensuring they 41
comply with the requirements outlined in this act. The Commission may request additional 42
clarification or documentation to ensure compliance. If any violations are identified, the 43
Commission shall act promptly to enforce penalties as outlined in subsection (e) of this section. 44
(d) Public Disclosure. – A public utility shall do all of the following: 45
(1) Clearly and conspicuously disclose in all its public messaging and advertising 46
whether the costs of the public messaging or advertising are being paid for by 47
the corporation 's shareholders or ratepayers. A disclosure is not clear and 48
conspicuous if the disclosure is difficult to hear or read, or if the placement of 49
the disclosure is easily overlooked. 50
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(2) Publish on its publicly accessible website all materials filed with the 1
Commission in accordance with subsection (b) of this section . The 2
Commission shall make available the annual reports filed by public utilities in 3
accordance with this section on its publicly accessible website with notice of 4
the availability of the reports prominently displayed on the website. 5
(e) The Commission shall impose penalties on public utilities that recover prohibite d 6
costs through rates, equal to the amount improperly recovered and refund them to the ratepayers. 7
The Commission shall also satisfy all of the following: 8
(1) In addition to any refunds that the Commission orders a public utility to pay 9
ratepayers, the Commission shall assess a civil penalty in accordance with this 10
section against a public utility that violates G.S. 62-131(a)(2) or fails or 11
neglects to comply with any part or provision of any order, decision, decree, 12
rule, directi on, demand, or requirement of the Commission related to 13
implementing G.S. 62-131(a)(2). 14
a. This civil penalty will not be less than fifty thousand dollars ($50,000) 15
and not more than one hundred fifty thousand dollars ($150,000) for 16
each violation. 17
b. Each expense improperly recorded to cost recovery through ratepayers 18
is a separate and distinct violation. Violations are continuing 19
violations. Each day a violation to G.S. 62-131(a)(2) occurs shall be a 20
separate and distinct violation. 21
c. The public utility shall not recover any penalty assessed pursuant to 22
this section from ratepayers. 23
(2) Three-fourths of the monies collected pursuant to any settlement or penalties 24
collected by the Commission for violations of G.S. 62-131(a)(2) shall be 25
deposited in the "Energy Equity Fund ," which is hereby established in the 26
State Treasury. 27
(3) One-fourth of the monies collected pursuant to any settlement or penalties 28
collected for violations of G.S. 62-131(a)(2) shall, upon appropriation by the 29
General Assembly, be used by the Commission for purposes of increasing 30
resources for the enforcement of this section. 31
(4) Upon appropriation by the General Assembly, monies in the "Energy Equity 32
Fund" may be allocated for purposes of disaster recovery and relief, as well 33
as assisti ng low -income households in transitioning to zero -emission 34
appliances to mitigate air quality and public health impacts of using 35
combustion appliances. 36
"§ 62-131B. Guidelines for special rates and alternative regulatory plans. 37
(a) The Commission may adopt alternative regulatory mechanisms, including 38
performance-based rates or special customer rates, provided that such measures accomplish all 39
of the following: 40
(1) Protect the public interest. 41
(2) Ensure equitable treatment across customer classes. 42
(3) Do not compromise the reliability of electric service. 43
(b) Before approving any alternative regulatory plan, the Commission shall ensure that 44
the plan will not increase costs for other customers beyond reasonable limits or conflict with 45
State energy goals, including renewable energy deployment. 46
(c) By November 1, 2025, the Commission shall initiate rulemaking to amend its rules 47
under G.S. 62-30 to implement the requirements of this act. The Commission's rules shall not 48
require public utilities to file more t han one annual report related to advertising and political 49
activities, except as required under G.S. 62-133.6." 50
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SECTION 4. If any provision of this act or its application is held invalid, the 1
invalidity does not affect other provisions or applications of this act that can be given effect 2
without the invalid provisions or application and, to this end, the provisions of this act are 3
severable. 4
SECTION 5. This act is effective when it becomes law. 5