Justia North Carolina Supreme Court Opinion Summaries

Two North Carolina electric utilities sought approval from the North Carolina Utilities Commission to implement performance-based regulation (PBR), an alternative to traditional ratemaking, and to increase rates through multiyear rate plans (MYRPs). The General Assembly had enacted legislation authorizing PBR in 2021, aiming to allow utilities to adjust rates over a three-year period based on projected capital investments and to incentivize carbon emissions reductions. The utilities, Duke Energy Progress and Duke Energy Carolinas, filed applications with supporting testimony and proposals, prompting intervention from stakeholders including the Attorney General, industrial customer groups, and electric membership corporations. The parties contested issues such as interclass subsidization, electric vehicle (EV) charging revenue treatment, approval of projected future capital projects, allocation of fuel and transmission costs, and the authorized return on equity (ROE) for the utilities’ shareholders.Following evidentiary hearings, the North Carolina Utilities Commission approved both utilities’ requests for modified MYRPs, allowed a 10% reduction in interclass subsidies (less than what some intervenors wanted), permitted the exclusion of estimated residential EV charging revenue from decoupling mechanisms, and authorized certain projected capital projects as “known and measurable” for rate recovery. The Commission also discontinued the “equal percentage” methodology for allocating fuel costs, approving voltage-differentiated rates instead, and adopted a stipulation shifting some transmission costs from one utility to the other to mitigate customer rate disparity. ROEs of 9.8% for Duke Energy Progress and 10.1% for Duke Energy Carolinas were set, with the latter reflecting a shift in Commission membership and risk assessment.On direct appeal, the Supreme Court of North Carolina reviewed whether the Commission’s orders violated law, misinterpreted the PBR statute, or lacked evidentiary support. The Court held that the Commission properly interpreted and applied the relevant statutes, made sufficient findings supported by competent, material, and substantial evidence, and did not abuse its discretion regarding subsidy reductions, EV revenue exclusion, capital project approval, fuel cost allocation, or ROE determinations. The Court affirmed the Commission’s orders in full. View "State ex rel. N.C. Utils. Comm'n v. Carolina Indus. Grp. for Fair Util. Rates II" on Justia Law

Two affiliated electric utilities sought approval from the North Carolina Utilities Commission to increase rates and implement performance-based regulation (PBR) under recently enacted legislation. The utilities submitted general rate case applications that included multiyear rate plans (MYRPs), which would permit preapproved rate increases over three years. Numerous parties, including the Attorney General, business groups, and electric membership corporations, intervened to challenge various aspects of the applications, including how the utilities allocated costs among customer classes, how revenues from residential electric vehicle charging would be handled, proposed capital spending projects, and the utilities’ allowed return on equity.The North Carolina Utilities Commission held extensive evidentiary hearings, with intervenors offering expert testimony and raising objections about statutory interpretation and factual sufficiency. The Commission issued final orders approving the MYRPs for each utility, making modifications to proposed subsidy reductions, excluding certain revenues from decoupling mechanisms to promote electric vehicle adoption, approving projected capital investments, and adjusting how fuel costs would be allocated among customer classes. The Commission also set new rates of return on equity for the utilities, noting changes in economic conditions and balancing interests of customers and investors.The North Carolina Supreme Court reviewed the appeals as of right. It held that the Commission correctly interpreted and applied the relevant statutes, including the PBR statute’s requirements for minimizing interclass subsidies and for cost causation. The Court found the Commission’s factual findings and legal conclusions were supported by competent, material, and substantial evidence. The Court also determined that the Commission’s process and explanations met statutory and constitutional requirements. The Court affirmed the Commission’s orders in all respects. View "State ex rel. N.C. Utils. Comm'n v. Carolina Indus. Grp. for Fair Util. Rates III" on Justia Law

The Supreme Court affirmed the order of the North Carolina Utilities Commission addressing Dominion Energy North Carolina's application for a general increase in its North Carolina retail rates, holding that Dominion's challenges to the Commission's order were unavailing.In the order at issue, the Commission authorized Dominion to calculate its North Carolina retail rates by, inter alia, amortizing certain costs. Dominion appealed, arguing that the Commission acted capriciously and arbitrarily in failing to follow applicable precedent. The Supreme Court affirmed, holding that the Commission's order was supported by competent, substantial evidence and that the Commission adequately explained the basis for the portions of its decision that Dominion challenged on appeal. View "State ex rel. Utilities Commission v. Virginia Electric & Power Co." on Justia Law

The Supreme Court reversed the decision of the court of appeals reversing the trial court's grant of summary judgment for the City of Concord and dismissing Plaintiffs' claims of illegal fees, holding that the language of a series of local acts unambiguously granted the City of Concord the authority to levy water and wastewater connection fees against Plaintiffs for services to be furnished.In 2004, Concord adopted an ordinance requiring residential subdivision developers to pay fees for water and wastewater service before a subdivision plat would be accepted for recording. In 2016, the ordinance was updated so that the fees were due at the time of acquiring a permit. Plaintiffs, developers who paid water and wastewater connection fees to the City, brought this action seeking a declaratory judgment that the fees were ultra vires because the City could not collect fees prior to furnishing sewer and water services to Plaintiffs' subdivisions. The trial court granted summary judgment for the City. The court of appeals reversed. The Supreme Court reversed, holding that there was no genuine issue as to any material fact with respect to the City's legislative authority to charge fees for services "to be furnished" by the City. View "JVC Enterprises, LLC v. City of Concord" on Justia Law

The Supreme Court affirmed in part and reversed and remanded in part orders entered by the North Carolina Utilities Commission addressing applications filed by Duke Energy Progress, LLC and Duke Energy Carolinas, LLC, holding that the Commission erred by rejecting an equitable sharing proposal without properly considering and making findings and conclusions concerning "all other material facts," as required by N.C. Gen. Stat. 62-133(d).Various interveners representing the utilities' consumers appealed the Commission's orders, challenging the lawfulness of the Commission's decisions concerning the extent to which the utilities were entitled to reflect costs associated with the storage and disposal of ash resulting from electricity production in coal-fired electric generating units in the cost of service used to set the utilities' North Carolina retail rates. The Supreme Court affirmed in part and reversed and remanded in part, holding that the Commission (1) did not err by allowing the inclusion of a majority to the utilities' coal ash costs in the cost of service used for establishing North Carolina retail rates and in increasing Duke Energy Carolinas' residential basic facilities charge; but (2) erred in rejecting an equitable sharing proposal without making the statutorily required findings and conclusions. View "State ex rel. Utilities Commission v. Stein" on Justia Law

In 2013, legislation was enacted requiring the City of Asheville to involuntarily transfer the assets it uses to operate a public water system to a newly-created metropolitan water and sewerage district. The City filed a complaint and motion seeking injunctive relief, alleging that the involuntary transfer provisions of the legislation were unconstitutional. The trial court concluded that the involuntary transfer violated various provisions of the North Carolina Constitution and permanently enjoined the State from enforcing the legislation. The court of appeals reversed, in part, the trial court’s order and remanded to the trial court for the entry of summary judgment in favor of the State. The Supreme Court reversed, holding that the challenged legislation constitutes a prohibited local act relating to health and sanitation in violation of Article II, Section 24(1)(a) of the North Carolina Constitution. View "City of Asheville v. State" on Justia Law

Aqua North Carolina (Aqua), a public utility providing water and utility service, requested authority from the North Carolina Utilities Commission to implement a rate adjustment mechanism of the type described in N.C. Gen. Stat. 62-133.12. After a hearing, the Commission approved Aqua’s request, finding that the request to implement a rate adjustment mechanism was in the public interest. The Attorney General appealed the Commission’s order. The Supreme Court affirmed, holding that the Commission provided sufficient findings, reasoning, and conclusions to support its finding that the mechanism is in the public interest and that the Commission’s determination is supported by substantial evidence in view of the record as a whole. View "State ex rel. Utils. Comm'n v. Cooper" on Justia Law

Duke Energy Progress filed an application with the North Carolina Utilities Commission requesting authority to increase its retail electric service rates and that rates be established using a return on equity (ROE) of 11.25 percent. The Commission entered an order approving an ROE of 10.2 percent. The Attorney General, who had intervened in the proceedings, appealed the Commission’s order. The Supreme Court affirmed, holding that the Commission made sufficient findings of fact regarding the impact of changing economic conditions upon customers and that these findings were supported by competent, material, and substantial evidence in view of the entire record. View "State ex rel. Utils. Comm'n v. Cooper" on Justia Law

Dominion North Carolina filed an application with the North Carolina Utilities Commission requesting an 11.25 percent return on equity (ROE), among other things. During the course of public hearings, the Commission received evidence that Dominion made certain adjustments to a study of the costs of providing retail electric service to a large industrial customer. The Commission ultimately issued an order approving an ROE of 10.2 percent and approving of Dominion’s adjustments to the cost-of-service study. The Supreme Court affirmed in part and reversed in part, holding (1) the Commission did not err by approving Dominion’s adjustments to the cost-of-service study; but (2) the portion of the Commission’s order in which it authorized a 10.2 percent ROE for Dominion did not contain sufficient findings of fact to demonstrate that it was supported by competent and substantial evidence. Remanded. View "State ex rel. Utils. Comm'n v. Attorney Gen." on Justia Law

Duke Energy Carolinas, LLC (Duke) filed an application with the North Carolina Utilities Commission (Commission) to increase its state retail electric service rates approximately 15.2 percent over current revenues. The application requested that rates be established using a return on equity (ROE) of 11.5 percent. The Commission approved a 10.5 percent ROE for Duke. The attorney general appealed the Commission's order, arguing that the order was legally deficient because it was not supported by competent, material, and substantial evidence and did not include sufficient conclusions and reasoning. The Supreme Court reversed, holding that the Commission failed to make the necessary findings of fact to support its ROE determination. Remanded to the Commission to enter sufficient findings of fact. View "State ex rel. Utils. Comm'n v. Attorney Gen." on Justia Law