North Carolina lawmakers are putting Democratic Gov. Josh Stein in a bind.
The Republican-controlled Legislature is set next week to review a GOP-sponsored proposal that would slap new restrictions on data centers — a move supported by Stein and his Democratic allies in the General Assembly. But the “Ratepayer Protection Act” includes two provisions that critics worry could undermine the first-term governor’s clean energy and climate goals.
The first provision would delay the retirement of coal-fired power plants until utilities secure certain approvals for nuclear power to replace them. The second provision would launch a study of the state’s 2050 carbon neutrality goal and how it affects energy rates — a potential precursor to axing the climate target.
A Stein spokesperson said the governor is reviewing the bill but declined to answer questions on the two provisions or how Stein intends to address them.
“Governor Stein has long said that data centers must pay their own way. As energy prices skyrocket, he has called on legislators to make sure North Carolina families aren’t footing the bill for data centers’ extreme energy consumption,” the spokesperson said in an email.
The bill was voted favorably out of the House Energy and Public Utilities Committee last week and was expected to make a speedy appearance on the House floor. But on Thursday afternoon, the proposal was referred back to the Commerce and Economic Development Committee for further review.
Democratic state Rep. Pricey Harrison, who serves on the energy panel, said the data center proposal adequately addresses many concerns, but she hopes the Legislature amends the provision that targets North Carolina’s 2050 climate goal.
“It’s really a pretty good bill,” she said. But “this study could kill the 2050 carbon goal depending on who they pick to perform the study. … I hope it’s tweaked.”
Republican state Rep. Dean Arp, chair of the Energy and Public Utilities Committee, did not respond to a request for comment, but during a committee hearing last week, he defended the study as necessary to understanding true costs for ratepayers.
“We don’t want rigid adherence to something just because we’ve passed it in the past,” he said. “We want data to provide us the road map that helps us make informed decisions.”
Getting his legislative allies to amend the bill may be Stein’s best play given the political liability of targeting a proposal that attempts to rein in large data centers, a move with widespread support.
The proposal would require local governments to assess a proposed data center’s impact on noise, water, air quality, thermal plumes, agriculture and forests, among others.
It also would force supercomputing campuses to use closed-loop cooling systems, which are intended to recycle water for cooling as opposed to evaporating it. In fact, the bill would ban evaporative cooling altogether in an attempt to reduce data centers’ water use.
The measure prohibits foreign ownership of data centers, as well as the use of eminent domain or local incentives to help get them built. The bill also attempts to ensure that customers don’t pay the lion’s share of data center energy and infrastructure costs.
The data center provisions align with measures that Stein urged bipartisan lawmakers on his own Energy Policy Task Force to consider last month.
But the governor’s office — as well as lobbyists and clean energy advocates — are still trying to parse how the other two provisions could play out if they remain intact.
On the measure related to coal retirements, the language bars the North Carolina Utilities Commission from authorizing the retirement of baseload electric generating facilities, such as coal-fired power plants, until the panel issues a so-called certificate of public convenience and necessity for building a nuclear facility.
In its long-term resource plan, Duke Energy said it aims to secure such certificates for certain facilities as soon as 2028. Still, things can change. The utility is required to submit a revised plan every two years and Duke Energy already has delayed the retirement of some coal plants to address rising energy demand from data centers and population growth.
That worries some anti-coal advocates, who say keeping aging plants online too long can hike costs for ratepayers and lead to more toxic air and climate pollution.
“I do think it’s tricky, because rightly so, people want to be protected from data centers, and I think some of the provisions in this bill are a good starting place,” said Mikaela Curry with Sierra Club’s Beyond Coal Campaign. “But requiring this rigid pathway that coal has to stay online is not in the best interest of North Carolina, and I hope that it doesn’t remain part of this bill.”
Duke Energy declined to comment on whether the measure would delay the planned retirement of coal plants.
“Duke Energy is committed to its customers and communities and will continue working with policymakers and regulators to deliver reliable and increasingly clean energy while keeping rates as low as possible,” spokesperson Craig Wilson said in an emailed statement.
Curry of the Sierra Club said she still has a lot of “weariness” from last year’s legislative session, when Republican lawmakers with the help of some Democrats repealed the state’s interim climate target of cutting carbon pollution 70 percent by 2030.
Stein vetoed that bill — saying it walked back the “state’s commitment to reduce carbon emissions” — but his veto was overturned by the Legislature.
Harrison, the Democratic state lawmaker, said she had concerns about how this year’s measure would address the 2050 climate target.
She said it “does seem suspicious” that the bill directs the legislative services officer to solicit researchers to weigh the costs of the state’s 2050 climate goal instead of relying on the North Carolina Collaboratory, which was designed to do that kind of work.
The collaboratory is a state-funded research organization created by the General Assembly and housed at the University of North Carolina, Chapel Hill. Its job is to connect university researchers with state policymakers to study issues the Legislature cares about and turn findings into policy recommendations.
The legislative services officer is tasked with directing administrative functions and facility management. The position is currently held by Paul Coble, a longtime conservative politician and former Republican mayor of Raleigh.
“So [I worry] anybody can do that study and come up with whatever result they want,” Harrison said. “And then I think there would be legislation to remove that 2050 goal.”
