By Andrew Pomeranz for THE CAROLINA JOURNAL
The North Carolina House passed Senate Bill 730, the Ratepayer Protection Act, advancing legislation to protect electric customers from higher costs linked to new energy demand from large data centers.
The House passed SB 730 with a vote of 69-44, after adopting an amendment. The bill now goes back to the Senate for approval and, if passed, to the governor.
House Energy and Public Utilities Co-Chair Matthew Winslow, R-Franklin, said the bill is intended to protect families and small businesses from rising energy costs as data center demand grows.
“At a time when families and small businesses are worried about high costs, we cannot allow massive new energy demands from data centers to drive up power bills,” Winslow said in a statement. “That’s why the Ratepayer Protection Act makes sure data centers pay for themselves rather than passing costs onto hardworking North Carolinians. As our state continues to grow, we’re committed to keeping energy reliable, communities protected, and affordability front and center.”
One of the bill’s central provisions would require electric public utilities to enter into contracts with large data centers. These contracts require data centers to cover extra costs for new energy infrastructure and the power they demand.
Donald Bryson, CEO of the John Locke Foundation, said the House improved the bill’s ratepayer protections but suggested the Senate should narrow its focus.
“The House improved the PCS of Senate Bill 730 by strengthening the requirement that data centers pay their own way rather than shifting costs onto families and small businesses, but it could be better,” Bryson said. “As the bill returns to the Senate, lawmakers should keep the focus on ratepayer protection and the Trump Administration’s ‘build, bring, or buy’ framework. Some provisions still take a more regulatory, command-and-control approach than conservatives should be comfortable with, including new siting regulations and prescriptive technology mandates. The Senate should narrow the bill to its strongest purpose: protecting ratepayers through market-oriented, customer-funded solutions.”
The issue coincides with rising concern over AI-driven data center energy demand. A Carolina Journal poll found 78.2% of voters think data centers should generate their own energy; 59.8% strongly support this, while fewer than 10% oppose it.
Jon Sanders, director of the John Locke Foundation’s Center for Food, Power, and Life, said the idea is worth considering as lawmakers look for ways to protect ratepayers from costs associated with new data center demand.
“This is an idea worth exploring in order to keep other customers from shouldering the costs of constructing new power plants to meet the new demand, specifically from data centers,” Sanders said. “That said, changing the law to allow data centers voluntarily to supply or contract for their own power independent from the grid would shield other customers from the risks without requiring special contracts and terms with the utility.”
SB 730 would further increase local oversight of data center projects. Before approving new data centers, local governments would be required to review noise impacts on residential units and schools within 500 feet of the property boundary. Local governments would also be required to examine impacts on ground and surface water, air quality, thermal plumes, agricultural resources, parks, historic sites, and forestland.
The legislation would additionally prohibit local governments from offering economic development incentives for data centers that do not already have local development approvals or state permits.
The incentives provision comes as lawmakers are already scrutinizing public subsidies for the industry. House Bill 1213, a separate bipartisan bill, would repeal several sales and use tax exemptions for data centers.
That proposal followed Stein’s request for his Energy Policy Task Force to examine whether North Carolina’s existing data center tax incentives should be repealed or modified. According to estimates from the Department of Commerce, North Carolina currently provides roughly $50 million in annual sales tax exemptions on electricity and replacement equipment used by data centers.
The bill further requires a study on whether state energy policies and large-load customers, such as data centers, are raising electric costs for families and businesses. It would assess the impact of North Carolina’s 2050 carbon-neutral goal on customer bills and propose ways to prevent large-load customers from shifting costs to other ratepayers.
House Speaker Destin Hall, R-Caldwell, praised the bill’s passage, suggesting the measure reflects Republican frustration with Stein’s energy agenda and the need to examine how existing policies affect ratepayers.
SB 730 also includes language aimed at preserving reliable baseload power. The bill would prevent the Utilities Commission from authorizing the retirement of baseload power facilities, or dispatchable electric generation facilities above 100 megawatts, until a certificate has been issued for the construction of at least one nuclear facility with 1,000 megawatts or more of generating capacity.
Democrats criticized this section of the bill, arguing it could keep older coal plants online longer and increase costs for ratepayers.
“In the same bill where we try to protect ratepayers from the costs of data centers, we are actually requiring them to bear the costs of outdated coal plants,” said Rep. Brandon Lofton, D-Mecklenburg. “This bill prevents us from retiring aging coal facilities and will hurt ratepayers by making their power bills more expensive.”
In response, Sanders argues that nuclear power is central to maintaining reliability if North Carolina keeps its 2050 carbon-neutrality mandate.
“Regardless of the Carbon Plan law, baseload power is too critical to the reliability of the power grid for a retiring source of baseload power to be replaced with an intermittent, weather-dependent source of power,” Sanders wrote.
SB 730 also bars certain foreign entities linked to China, Iran, North Korea, or Russia from owning data centers and from using eminent domain to acquire land for a data center.