AN ACT to conduct a study for improvements and reform for fair competition in North carolina's energy market.

Whereas, much of the electric service provided in North Carolina is currently provided by vertically integrated providers of electric distribution and transmission services; and

Whereas, the State has adopted legislation, including Session Law 2007‑397 and Session Law 2017‑192, to diversify the resources used to reliably meet the energy needs of consumers and provide economic benefits to the State; and

Whereas, the State has committed to reducing electric power sector greenhouse gas emissions by seventy percent (70%) below 2005 levels by 2030 and attaining carbon neutrality by 2050; and

Whereas, electricity sector regulatory framework changes to the wholesale electricity market may require changes to State law as well as federal authorization; and

Whereas, the South Carolina legislature authorized a study to be completed on November 18, 2021, to examine the benefits of various restructuring options for electricity markets associated with electricity generators, transmitters, and distributors in South Carolina; and

Whereas, regional and interstate arrangements may require changes to laws in states other than North Carolina; Now, therefore,

The General Assembly of North Carolina enacts:

SECTION 1.  The North Carolina Public Utilities Commission shall conduct a study that accomplishes all of the following:

(1)        Assesses the costs and benefits of the current energy market in North Carolina.

(2)        Assesses possible reforms to be made to the Southeastern Energy Exchange Market.

(3)        Evaluates the feasibility, costs, and benefits of an energy imbalance market or regional transmission organization in North Carolina and South Carolina or the Southeastern United States.

(4)        Determines the necessary legal and procedural requirements for establishing an energy imbalance market in North Carolina and South Carolina or a larger geographical grid such as a regional transmission organization.

SECTION 2.  For the purposes of this act, the following definitions apply:

(1)        Consultant. – An independent, qualified individual or entity retained by the legislature to conduct objective, evidence‑based research and analysis related to utility regulation, cost‑recovery practices, and ratepayer impacts in North Carolina. The consultant must have demonstrated expertise in energy policy, utility regulation, public interest advocacy, and must maintain neutrality by being free from conflicts of interest, including any financial, professional, or personal ties to utility companies or their affiliates.

(2)        Energy imbalance market. – A voluntary market for dispatching real‑time energy across utility service territories in which each participating utility retains ownership and control of its transmission assets but opts to bid generation into a centralized dispatch authority.

(3)        Regional transmission organization. – An independent, nonprofit organization that manages the transmission, generation, and retail sale of electricity in a region and is responsible for the reliability of the real‑time electricity market.

(4)        Southeastern Energy Exchange Market. – A 15‑minute automated energy exchange market between balancing authorities in the Southeastern United States involving over 15 entities.

SECTION 3.  The Commission shall initiate the study within 90 days after the date this act becomes law. Within one year of the date of enactment of this act, the Commission shall submit a written report to the Joint Legislative Energy Policy Commission concerning the results of the study. The Commission may contract for professional, clerical, or consultant services as provided by G.S. 120‑32.02. The Commission shall seek additional federal funding for the study to the extent available. The study shall include, but is not limited to, all of the following:

(1)        An evaluation of establishing an open access energy imbalance market within the geographical boundaries of North Carolina and the broader Southeast. Specific analysis shall be conducted in the following areas:

a.         Electricity generation and capacity adequacy and diversity.

b.         Customer service and rates.

c.         Environmental quality and carbon emissions.

d.         Economic opportunity.

e.         The potential impacts, including costs and benefits, of an energy imbalance market on disadvantaged or vulnerable populations or communities or both.

(2)        An evaluation of establishing a Southeastern Regional Transmission Organization. Specific analysis shall be conducted in all of the following areas:

a.         Electricity generation and capacity adequacy and diversity.

b.         Customer service and rates.

c.         Environmental quality and carbon emissions.

d.         Economic opportunity.

e.         The potential impacts, including costs and benefits, of an energy imbalance market on disadvantaged or vulnerable populations or communities or both.

(3)        An assessment of possible inefficiencies in the Southeastern Energy Exchange Market and an examination of the costs, benefits, and risks to State and local government, utilities, independent power producers, businesses, and customers of all classes regarding the following aspects of the State and region's current electricity system versus an energy imbalance market or potential regional transmission organization. Specific analysis shall be conducted in all of the following areas:

a.         Electricity generation and capacity adequacy and diversity.

b.         Customer service and rates.

c.         Environmental quality and carbon emissions.

d.         Economic opportunity.

e.         The potential impacts, including costs and benefits, of an energy imbalance market on disadvantaged or vulnerable populations or communities or both.

(4)        The legal and procedural requirements in North Carolina, at the Federal Energy Regulatory Commission, or in other states associated with the adoption of an energy imbalance market or regional transmission organization, including identification of existing laws, regulations, and policies that may need to be amended to implement the electricity market reform measures.

SECTION 4.  There is appropriated from the General Fund to the North Carolina Utilities Commission the sum of three hundred fifty thousand dollars ($350,000) in nonrecurring funds for the 2025‑2026 fiscal year to be used to conduct the study authorized by this act.

SECTION 5.  This act is effective when it becomes law.