Why a one-scenario study shouldn’t sink the Power Bill Reduction Act

On July 2, Governor Josh Stein vetoed Senate Bill 266, a measure that would loosen 2021’s House Bill 951, which tells North Carolina power companies to cut power-sector carbon dioxide emissions 70 percent below 2005 levels by 2030 on the way to carbon neutrality by 2050. Gov. Stein justified the veto with a memorandum released two days earlier by three NC State professors — amplified by the North Carolina Sustainable Energy Association — claiming the bill could saddle ratepayers with “up to $23 billion” in extra natural gas costs. The figure sounds dire — until you see how it was stitched together.

A headline built on the worst-case fuel path

The professors’ memo prices natural gas use only under the highest of three fuel-price trajectories in the Carbon Plan docket from the state Utilities Commission, then presents that upper-tail result as the risk to customers. The reference and low-price cases — along with any probability weighting — vanish from the analysis. 

Instead of rerunning their computer model to see how SB 266 would change the future mix of power plants, the authors just took last year’s plan, plugged it into a spreadsheet, and estimated natural gas use from there. That locks in today’s assumptions and bars the very technologies — advanced nuclear, long-duration storage, and hydrogen-ready turbines — that the bill gives the Utilities Commission the freedom to weigh.

Capital and reliability savings are omitted

The professors’ memo adds up what a spike in natural-gas prices might cost, but it treats several other big expenses—or savings—as if they cost nothing at all:

• Absent SB 266, most of the generation and grid-upgrade projects needed to hit the 2030 deadline would have to be built and paid for in one tight window. By removing that deadline, the bill lets regulators sequence those investments into the 2030s, so construction costs — and the resulting bill impacts — land gradually instead of in a single surge.
• Instead of letting Duke continue to earn roughly 9–10 percent on its remaining coal balance, SB 266 would replace that tab with low-interest, AAA-rated securitization bonds — cutting the monthly cost that shows up on customer bills.
• Earlier winter-reliability upgrades (hydrogen-ready combustion-turbine power plants, pumped storage, pilot small modular reactors) made affordable by a slower timetable.

When only one column of the ledger is totaled, the outcome is preordained.

Independent modeling for the John Locke Foundation (Lighting the Path, 2024) found that meeting the 70 percent target by 2030 with wind, solar, and four-hour batteries would require roughly ten times today’s nameplate capacity and 7.7 million acres of land, plus 12,500 miles of new transmission lines — cost categories the professors’ memo simply leaves out.

By contrast, a nuclear-led mix achieved the same 2050 neutrality target — House Bill 951’s eventual goal — with one-sixth the infrastructure and significantly lower transmission costs.

Lighting the Path also stress–tested winter-morning reliability — the very slice of the load curve the professors’ memo glosses over. Its model shows that even a 115-gigawatt fleet of four-hour batteries (thirteen times today’s entire U.S. storage capacity) could not cover a multiday cold snap without massive overbuilding of solar. By contrast, maintaining a core of dispatchable nuclear and hydrogen-ready gas meets the same peak demand with one-tenth the land area and a fraction of the battery investment, while still allowing the state to phase out coal on schedule. Ignoring those reliability costs doesn’t make them disappear; it just shifts them — at high interest — onto future ratepayers.

Pipeline limits are treated as permanent

The natural gas “Zone 5” that serves North Carolina, Virginia, and South Carolina sits on the Transco interstate pipeline. Because the Atlantic Coast Pipeline was cancelled, that stretch now runs near full capacity on the coldest days. But Duke’s own integrated resource plan (IRP) treats the bottleneck as fixable, for example, by adding short pipeline loops or compressor upgrades, contracting extra liquid natural gas (LNG) storage, or signing firm winter-supply agreements. The professors’ memo prices none of those options, as if pipelines can never be expanded while renewable mandates can be imposed at will.

A second John Locke Foundation paper — Power Plays: How an Activist Bureaucracy Obstructs NC’s Energy Future (April 2025) — undercuts the professors’ memo from another angle: it traces how state regulators have deliberately throttled natural-gas pipeline capacity by “weaponizing” Clean Water Act §401 permits against the Atlantic Coast Pipeline and Mountain Valley Southgate projects, leaving North Carolina served by just one interstate line and forcing planners to treat future gas supply as “significantly uncertain.” The same report notes that NERC still refers to gas as “the reliability fuel that keeps the lights on,” yet the Carbon Plan’s modeling team responded to the pipeline bottleneck by capping new combined-cycle additions and leaning harder on high-cost solar-plus-storage, precisely the cost spiral SB 266 was intended to avoid. In short, Power Plays shows that the professors’ memo’s headline risk (“more gas equals higher bills”) is itself a byproduct of regulatory delays that choke supply; fixing those bottlenecks — or at least giving the Utilities Commission the flexibility to plan around them — would do far more for ratepayers than clinging to an arbitrary 2030 mandate.

Renewables and transmission costs magically stay flat

Solar-module prices jumped nearly 40 percent between 2021 and 2023; offshore-wind bids have doubled in some markets. Freezing those inputs while allowing gas prices to fluctuate freely introduces bias into the spreadsheet.

Federal incentives are no longer a sure thing. The professors’ memo assumes every solar panel and battery will keep enjoying the 30 percent Investment Tax Credit created by the Inflation Reduction Act. Yet Congress has passed and President Trump has signed the “One Big Beautiful Bill,” and it reaches much further than the rooftop market. The bill ends the 30 percent residential solar credit after December 31, 2025, and phases out the new technology-neutral production and investment credits for any utility-scale solar or onshore or offshore wind project placed in service after 2027, unless construction starts within 12 months of enactment. When those subsidies disappear, the memo’s solar-heavy portfolio will see its capital costs jump virtually overnight, while the gas side of the ledger remains unchanged.

And who bears today’s subsidy costs? Research published by the John Locke Foundation recently shows that federal credits already shift costs from affluent adopters to the broader customer base, inflating bills for households least able to afford them. Removing the credit would end that cross-subsidy and blunt the memo’s claim that more gas automatically means higher bills. In other words, the memo rests on a subsidy that may disappear — and on a cost shift that lawmakers have every reason to unwind.

What lawmakers should remember when the override vote comes

• SB 266 still requires the Utilities Commission to pick the “least-cost, reliable” mix. It merely removes an arbitrary deadline that was forcing a high-priced solar sprint.
• The $23 billion headline is advocacy, not risk analysis. It ignores two cheaper fuel scenarios, every capital-cost saving, and every reliability benefit the bill enables.
• NCSEA did the governor no favor by passing along an overblown number. Ratepayers deserve probabilistic, systemwide accounting, not a scare figure drawn from the darkest corner of the price forecast.

If the General Assembly’s goal is affordable, dependable electricity on the way to carbon neutrality by 2050, Senate Bill 266 is the more straightforward path than the status quo. The memo at the heart of Governor Stein’s objection is too thin to carry the weight he has placed on it.

The post Why a one-scenario study shouldn’t sink the Power Bill Reduction Act first appeared on John Locke Foundation.