ASHEBORO, N.C. (ACME NEWS) — Regulators are set to hold a final hearing before deciding later this year whether to approve new storm recovery bonds to cover the costs of repairing damage from Hurricane Helene and other recent storms. If approved, the plan would add a new charge to customer bills for up to the next 20 years.
Proposed Storm Recovery Fee
In early February 2025, Duke Energy, through its N.C. subsidiaries Duke Progress Energy (DEP) and Duke Energy Carolinas (DEC), filed a petition with the North Carolina Utilities Commission (NCUC) seeking to issue new storm recovery bonds to cover the costs of repairing damage from several major storms between 2020 and 2024.
That proposed bond would pay for damages from Hurricane Zeta (2020), Winter Storm Izzy (2022), Hurricane Ian (2022), Tropical Storm Debby (2024), and Hurricane Helene (2024).
For the last couple months, the administrative process has been playing out at the North Carolina Utilities Commission. The next step, a formal evidentiary hearing scheduled for April 21, 2025, which will be the final hearing before the Utilities Commission will issue a decision later this year.
The proposed bond size has not been finalized but is expected to be between $1.2 billion and $1.5 billion, depending on the final outcome of the Utilities Commission’s review. That would put the new charge on customers’ bills between $2 and $5 per month, for most residential customers. However, since the charge is usage based, the exact amount would vary by customer.
How Storm Recovery Bonds Work
North Carolina lawmakers created the option for storm recovery bonds in 2019, passing a law that allows utilities to finance storm-related costs through a special type of low-interest bond rather than using rate increases. The goal was to help spread large storm repair costs over time while minimizing the impact on customers.
Under the law, a utility like Duke Energy must prove that issuing storm recovery bonds would be less expensive for customers than recovering costs through traditional rate increases. The North Carolina Utilities Commission must approve the financing plan before any bonds can be issued.
Customers can currently see a storm recovery charge from a previous bond issued in 2021 on their monthly bills. That bond totaled about $1 billion —split between Duke Energy Progress and Duke Energy Carolinas— and covered repair costs from Hurricane Florence (2018), Hurricane Michael (2018), Winter Storm Diego (2018), and Hurricane Dorian (2019).
Duke Energy estimates that using storm recovery bonds in 2021 over a rate increase saved customers about $300 million, reducing storm costs by approximately 35% compared to traditional methods, according to the company’s 2021 filings.
But, many customers wonder why these costs are passed onto customers at all, and the answer lies in how Public Utilities are set up under N.C. law.
Why Storm Costs Are Passed to Customers
Under North Carolina law, electric utilities like Duke Energy operate as regulated monopolies, meaning they are allowed to recover the costs of ‘maintaining and restoring service’, which includes repairs from major storms. Essentially, the costs of repairing storm damage is considered part of the utility’s responsibility to ‘maintain and restore service’, and North Carolina law allows Duke to recover those expenses from customers through rate increases or, since 2019, through storm recovery bonds.
The North Carolina Utilities Commission oversees this process, along with the Public Staff, an independent state agency that represents the interests of utility customers.
What’s Next / Public Comments
The final hearing on Duke Energy’s proposed storm recovery bond is currently scheduled for April 21, 2025. After that hearing, the commission will review all evidence and testimony, including public comments, before issuing a final decision. A ruling is expected later in 2025.
If approved, the new storm recovery charge would likely appear on customer bills in late 2025 or early 2026. The charge would remain in place for about 20 years until the bonds are fully repaid.
As hurricanes and extreme storms become more common, Duke Energy has noted that disaster recovery financing could continue to play a larger role in how utilities manage future costs, according to filings with the North Carolina Utilities Commission.
Customers who wish to comment on the proposal can submit comments online, as well as in writing by mail, to the North Carolina Utilities Commission referencing Docket E-7, Sub 1325 (for Duke Energy Carolinas) and Docket E-2, Sub 1370 (for Duke Energy Progress).
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