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HB 1180

Data Center Amendments.

2025-2026 Session Introduced by Laura Budd and 7 co-sponsors

The bill creates a tariff-based electric service framework for large-load data centers, ensuring they cover all costs while protecting other customers from rate increases.

Passed 1st Reading
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Bill Summary · HB 1180

Summary of North Carolina House Bill 1180 (Session 2025) – Data Center Amendments

Purpose and Intent

HB 1180 proposes to amend North Carolina law to regulate electric service tariffs for large-load data centers (LDCs) and to reorganize certain tax provisions related to data centers. The bill aims to ensure that the provision of electric service to LDCs is governed by a formal tariff approved by the Utilities Commission, with protections to prevent increased costs for other electric customers and to address financial and contractual risks associated with LDCs.

Key Provisions

1) Definition Updates

  • Adds and clarifies the term “Large-load data center” (G.S. 62-3(16a)):
    • Primary services: storage, management, and processing of digital data.
    • Houses computer and network systems including servers and related equipment.
    • Aggregate demand: more than 20 megawatts.
    • Contiguous or adjacent sites under common ownership or effective control are treated as a single facility for calculating aggregate demand.

2) Tariff-Based Electric Service for LDCs

  • Enacts new statutory framework for electric service tariffs (proposed new G.S. § 62-133.25):
    • Electric public utilities must file for Commission approval a tariff for providing electric service to large-load data centers.
    • Tariff may be tiered to accommodate different classes of LDCs based on load or other cost-related factors.
    • Tariffs must ensure LDCs bear the full costs of capital investments and incremental operating expenses needed to serve them, while protecting other electric customers from rate increases and stranded-cost risks.

3) Tariff Provisions to Protect Other Customers

  • Required terms and protections in every tariff filing (G.S. § 62-133.25(b)-(c)):
    • Cost allocation: LDCs cover the full cost of necessary capital and incremental operating expenses; other customers should not incur rate increases due to serving LDCs; no stranded-cost shift to other ratepayers.
    • Minimum 10-year contract term for LDCs (c)(1).
    • Minimum billing demand obligation for at least 85% of maximum requested service for the first 10 years after service begins (c)(2).
    • Financial assurance or surety to protect ratepayers against rate increases if the LDCs cease operations or reduce consumption (c)(3).
    • Requirement for advance notice to the utility before any anticipated reduction in demand (c)(4).
    • Additional terms deemed reasonable and in the public interest by the Commission (c)(5).

4) Commission Review and Approval

  • The Utilities Commission must find the tariff just, reasonable, and compliant with protections for other customers (G.S. § 62-133.25(d)).

5) Effective Dates and Implementation

  • Tariff filing deadline: Electric public utilities must file the required tariff no later than 180 days after the act becomes law (effective date to be established upon enactment; see timing below) (Section 1(d)).
  • Phase-in deadline for service under tariff: Beginning January 1, 2028, utilities may not provide electric service to an LDC except under an approved tariff (Section 1(d)).

6) Repeals

  • The bill repeals several existing sections of the North Carolina tax code (G.S. 105-164.3(47), (79), (201); 105-164.13(43a), (55), and (55a)) (Section 2(a)).
  • Effective date for repeals: January 1, 2027, applying to sales on or after that date (Section 2(b)).

Affected Parties

  • Electric public utilities in North Carolina that serve large-load data centers.
  • Large-load data centers (defined as facilities with >20 MW aggregate demand) and their developers/operators.
  • The North Carolina Utilities Commission (NCUC), which would approve tariffs and enforce terms protecting other ratepayers.
  • General electric customers who could be affected by cost allocations and stranded-cost protections.
  • Tax code provisions currently repealed by the bill (timing specified).

Procedural and Timeline Highlights

  • Tariff filings: Required within 180 days after enactment.
  • Effective limitation: From January 1, 2028, LDC electric service must be under an approved tariff.
  • Repeals: Take effect for sales on or after January 1, 2027.
  • Overall process: Introduces a formal tariff-based regime for LDCs, with strict protections and long-term commitments.

Notes for Readers

  • The bill emphasizes cost recovery of LDC-related investments and protects non-LDC customers from cost shifts.
  • The 10-year minimum term and 85% billing-demand requirements will influence LDCs’ long-term planning and utility negotiations.
  • The tiered tariff concept allows differentiation among LDCs by size, cost, or other relevant factors.

Compiled from official sources — confirm details with the bill’s official record.

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