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SB 1076

Rocky Mount/Louisburg Utility Rev./Advisory.

2025-2026 Session Introduced by Lisa Barnes and 3 co-sponsors

SB 1076 restricts Rocky Mount’s electric revenue transfers to non-electric funds, confirming uses for debt service, rate stabilization, and rate reductions.

Ratified
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Bill Summary · SB 1076

Summary of Bill SB 1076 (Session 2025) – North Carolina

Title

Rocky Mount/Limit Electric Power Revenue Uses

Purpose and Intent

SB 1076 proposes to prohibit the City of Rocky Mount from transferring revenues derived from its electric system to other municipal funds beyond specified uses. In effect, the bill aims to constrain how an electric utility fund may share or transfer its revenues with the city’s general funds or other municipal funds, preserving a defined scope for ratepayer-backed revenues and their uses.

Key Provisions

  • Permitted Uses of Electric Revenue (as amended in G.S. 159B-39):

    • Revenue from electric rates may be used to:
    • Pay the direct and indirect operating costs of the electric system.
    • Transfer to other funds an amount reflecting a rate of return on the investment in the electric system (subject to limits described below).
    • Any remaining revenue should be used to:
      • Lower electric rates in the service area, and
      • Make additional debt service payments on bonds or other indebtedness issued to finance electric system improvements.
    • The bill restricts transfers to other municipal funds for purposes not explicitly authorized by law.

  • Definition of “Direct and Indirect Costs” (G.S. 159B-39(b)):

    • Includes:
    • Debt service on electric system debt.
    • Capital improvements or equipment for the electric system.
    • Costs of power purchases under contracts.
    • Reserves required by debt documents.
    • Additional reserves for financial/operational integrity.
    • Rate stabilization funds to smooth rate changes.
    • In lieu of taxes to other governmental units (property taxes that would be due if the city did not own the electric system).
    • Transfers to the general fund or other municipal funds to reimburse those funds for costs allocable to the electric system.

  • Rate of Return on Investment (G.S. 159B-39(c)):

    • The amount transferred to other municipal funds as a rate of return must be based on:
    • The preceding fiscal year’s audited financial statements.
    • The transfer may be less than the calculated maximum, but may not exceed:
    • The greater of:
      • 3% of the electric system’s gross capital assets at the end of the preceding year, or
      • 5% of the electric system’s gross annual revenues for the preceding year.

  • Exceptions and Applicability:

    • The restrictions do not apply to actions mandated by the Local Government Commission per G.S. 159-181(c).

  • Geographic/Entity Scope:

    • Applies to certain cities and towns in the North Carolina Eastern Municipal Power Agency, specifically listing Rocky Mount among others.

  • Effective Date:

    • October 1, 2026 (Note: the act states it becomes effective July 1, 2026; the filing history indicates applicability to Rocky Mount, with an effective date noted in the act).

Affected Parties

  • Primary Entity: City of Rocky Mount (and its electric system/utility operations).
  • Public Finance/Utilities Stakeholders: City of Rocky Mount’s governing body, electric ratepayers, bondholders, and potentially other funds within the city that might receive transfers.
  • Broader Context: Other municipalities within the North Carolina Eastern Municipal Power Agency as noted in the bill (though the primary focus is Rocky Mount).

Procedural/Timeline Aspects

  • Status: Filed May 5, 2026.
  • Effective Date: The bill indicates July 1, 2026 as the start of the act’s effect.
  • Scope: Local/municipal bill targeting Rocky Mount’s handling of electric revenue, within the context of the Eastern Municipal Power Agency member cities.

Notes

  • The bill seeks to formalize and limit how revenues from Rocky Mount’s electric system may be used or transferred to non-electric funds, emphasizing rate stabilization, debt service, and potential returns to the city, while capping transfers to specified percentages of assets or revenues.

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

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