Bill In NCGA Could Allow Utilities To Issue Bonds For Storm Recovery

Apr 16, 2019

A Duke Energy worker restores power after a storm.
Credit Duke Energy

State senators from both parties say bonds could save utilities customers money when it comes to paying for recovery from major storms like Hurricane Florence.

The Storm Securitization bill would allow power companies like Duke Energy to seek permission from the state Utilities Commission to issue a bond for the costs of cleaning up after natural disasters.

Backers of the bill say it would save customers between 15 percent and 20 percent off their rates.

Cindy Averette with the non-partisan Legislative Analysis Division told members of senate finance committee a utility must decide how much it would want to raise through a bond.

"Because what it receives is an up-front sum of cash but what it foregoes is the ability to generate revenue through including in its base rate," she said.

The bill now moves to the agriculture committee.

The finance committee did not take up a potentially more problematic portion of the bill. Under that part, a new process would allow companies like Duke Energy to ask the Utilities Commission to approve multi-year rate plans, raising concerns among rate-payer advocates. During such a multi-year plan, rate changes would be authorized without the need for a base rate proceeding.