Dive Brief:

• A North Carolina bill that would shift the way Duke Energy charges its electricity customers and gets funding for major projects hit a critical snag on Tuesday.

• Senate Bill 559, which would have established a multi-year rate case for the utility for up to five years at a time was sent back to the Senate after the House amended the bill to establish a study on different rate plan options. The bill was originally introduced in April and passed the Senate in May.

• House legislators and stakeholders opposed the bill because of what they said was a lack of stakeholder input on policy that would dramatically change the way Duke is regulated. "The biggest concern that was raised on the floor was that this is the biggest paradigm shift in North Carolina electricity regulation in 100 years," Peter Ledford, general counsel at the North Carolina Sustainable Energy Association told Utility Dive.

Dive Insight:

While SB 559 received bipartisan support when it passed the Senate in May, its amendment in the House was also a bipartisan effort.

"Honestly, there was relatively little debate on the floor," said Ledford "I think the whole thing was over in 15 minutes."

Historically, he said, North Carolina's Senate has been more supportive of pro-Duke policies than the House. An April study from the North Carolina Energy Justice Coalition linked the bill's acceleration through the Senate with campaign spending from the utility to local legislators.

But stakeholder concerns seemed to have weighed out in the House. The amended bill directs the state's Public Utilities Commission to examine alternative regulation policies. Those include performance-based regulation options, where the utility is potentially rewarded or penalized for grid and customer benefits, as well as energy efficiency benchmarks and distributed energy resource additions.

The previous version of the bill would have allowed Duke to get funding approved up to five years in advance, and could have been used for future costs such as coal ash clean up and grid modernization plans.

Opponents of that version were concerned that without stakeholder input such a dramatic shift in the way the utility is regulated could leave ratepayers on the hook for the utility's estimated $9.6 billion-$10.6 billion coal ash clean up or could allow Duke to push through its previously rejected grid modernization plan.

"This is a pretty significant change in the way the utilities commission handles rate cases and I don't think it's something that should be decided by a couple of committee meetings and a couple of floor votes," Rep. Pricey Harrison, D, told Utility Dive in April.

Duke said the bill would have provided more "flexibility" on its rates.

"We're encouraged by the recognition of how many of our state leaders recognize that modern policies and tools are needed," Duke spokesperson Paige Layne told Utility Dive. "We're encouraged by the dialogue. So we're going to continue to work with all of our stakeholders, certainly the bill sponsors, on that. But, we support the bill as it was written."

Duke does support other modifications to the bill made in the House, including a provision that would mandate investment in low-income programming.

The bill also includes a provision on storm securitization, which would allow the utility to recover certain storm-related costs. The House version will go back to the Senate for a concurrence vote, which Ledford said is unlikely to pass. If the amended bill doesn't pass the Senate, it'll be sent through a conference committee where members from each chamber negotiate a final version.