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SB 718

Water Management

2026 Regular Session Introduced by Stan McClain

Requires all‑source, technology‑neutral energy procurements every two years, ending utility ownership mandates and boosting third‑party competition with independent oversight.

Died in Environment and Natural Resources
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Bill Summary · SB 718

SB 718 — Fair Procurement and Ownership Reform Act

Status: Passed 1st Reading (introduced Feb 21, 2025)
Primary sponsors (NC version): Senators Meyer and Murdock
Subjects: Commerce; Utilities; Infrastructure; Alternative Energy; Public procurement; Regulatory commissions

Purpose / Intent

The bill (titled in text as the "All-Source Procurement and Renewable Energy Ownership Reform Act") is intended to:
- Transition procurement of future generation toward competitive, technology‑neutral "all‑source" solicitations;
- Remove utility ownership mandates for renewable projects to promote competitive neutrality and third‑party development;
- Ensure transparent procurement oversight, equitable access across customer classes, and alignment with state emissions/reliability goals; and
- Expand carbon accounting to include methane.

Key provisions

  • Definitions: Establishes terms including “all‑source procurement,” “offering utility” (electric public utilities with >150,000 NC customers), and customer size thresholds (large vs. small commercial/industrial).
  • All‑Source Procurement (§62‑362):
    • Utilities serving >150,000 customers must conduct competitive, technology‑neutral procurements (solar, wind, storage, hydro, geothermal, etc.) at least every two years as part of Carbon Plan / Integrated Resource Plan (or as directed by the NC Utilities Commission).
    • Solicitations must address capacity, energy, and ancillary service needs and consider both utility‑owned and third‑party proposals with clear documentation.
  • Evaluation & Oversight (§62‑363):
    • Bids are evaluated under standardized criteria approved by the Commission.
    • Independent evaluators (approved by the Commission) must oversee procurements, review scoring and awards, and publish a public report.
    • Evaluation criteria include alignment with state renewable/emissions goals, lifecycle cost‑effectiveness, reliability contributions, feasibility, and deployment timeline; a public weighted scoring system is required.
  • Ownership Neutrality (§62‑364):
    • Eliminates mandated utility ownership percentages (e.g., prior 55% utility ownership for some projects).
    • Prohibits public utilities from holding equity stakes in projects procured through competitive bids.
    • If procurement targets are unmet, the Commission may allow utility self‑developed projects under a simplified review with capped cost recovery.
  • Small project procurement (§62‑365): Commission to implement all‑source procurement for renewable facilities of 80 MW nameplate capacity or less.
  • Participation & Transparency (§62‑366):
    • Procurements to be administered by an independent third‑party entity.
    • Utilities can participate in solicitations in their service areas, but contracts are subject to Commission review.
    • Commission must publish detailed RFPs and an annual statewide summary; utilities must report within 90 days of awards (solicitation process, bids received, selected projects and rationale).
  • Shared solar (§62‑367):
    • Reallocates shared solar capacity by customer class: large commercial 45%, small commercial 25%, government 15%, residential 15%.
    • Participants receive bill credits based on market value of energy/capacity; RE attributes must be retired; subscriptions may be terminated without penalty.
  • Cost recovery & capital controls (§62‑368):
    • Utilities may recover prudently incurred costs for PPAs and required network upgrades; may defer incremental costs as regulatory assets with Commission approval.
    • Capital cost caps and a uniform capital cost cap to apply across projects to ensure competitiveness; additional details truncated in available text.

Who is affected

  • Offering utilities (electric public utilities serving >150,000 customers) — new procurement processes, limits on ownership stakes, reporting obligations.
  • Independent developers and third‑party owners — increased access/priority under competitive, technology‑neutral procurements.
  • Customers — potential changes in shared solar access and allocations (notably reduced residential share in stated reallocation), billing credits tied to market value.
  • NC Utilities Commission — expanded oversight, rule‑making, approval of evaluators/criteria, review of contracts and cost recovery.
  • Independent evaluators and third‑party procurement administrators — new roles and responsibilities.

Procedural / timeline highlights

  • All‑source procurements required at least once every two years (as part of Carbon Plan / IRP) unless directed otherwise by the Commission.
  • Utilities must file reports within 90 days after contract awards; Commission publishes annual procurement summaries.
  • Many implementation details (scoring weights, evaluator approval, capital cap amounts, review procedures) are delegated to the Commission or left to subsequent rulemaking or Commission orders.

Potential impacts and considerations

  • Intended to increase competition, speed deployment of third‑party projects, and reduce utility market advantages from ownership mandates.
  • Could change how costs are allocated and recovered (capital caps, capped cost recovery for self‑developed projects), with uncertain net effect on customer rates—Commission review and rulemaking will shape outcomes.
  • Reallocation of shared solar capacity shifts program access toward commercial and government customers; residential share reduced under proposed percentages.
  • Administrative costs for independent evaluators and reporting will rise; the bill contemplates Commission oversight to ensure transparency and fairness.

Note: Available document text is truncated in some sections (e.g., later subsections of §62‑368). Final implementation and fiscal impacts depend on Commission rules, specific capital cap levels, and complete statutory language.

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

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