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Committee advances securitization change to expedite recovery of Hurricane Helene storm costs
Summary
A bill would let investor‑owned utilities securitize estimated storm costs and reconcile actual costs later, which witnesses said would speed recovery of over $500 million in Duke Energy storm costs and could limit credit‑rating pressure; ORS and the PSC remain central reviewers.
A committee advanced legislation that would let electric utilities use the state’s securitization framework to finance storm‑recovery costs based on estimated invoices and reconcile actual costs in a later proceeding.
The securitization mechanism, enacted in 2022, allows utilities to issue low‑cost, bond‑like instruments to recover catastrophic storm costs if the Public Service Commission finds a quantifiable net benefit to customers compared with traditional rate recovery. Under the bill considered, utilities could seek pre‑issuance approval based on estimated costs and perform reconciliation in a subsequent proceeding, which proponents said would shave roughly six months from the current process.
Tiger Wells of Duke Energy said the company faces more than $500 million in hurricane‑related costs from Hurricane Helene and wants to securitize the amount to avoid putting the debt on its books while a long rate‑case process proceeds. Wells said Duke’s earlier securitization (after the 2022 law) converted about $175 million in storm costs and produced roughly $35 million in net benefit to customers.
Andrew Bateman of the Office of Regulatory Staff (ORS) described the statutory safeguards: utilities must show quantifiable net benefits; ORS reviews filings; the Public Service Commission must certify net benefit before issuance; and an independent third party must confirm the analysis. Bateman said securitization can lower interest costs relative to including costs in rate base and lower the risk of credit‑rating downgrades that would raise long‑term capital costs affecting customers.
Committee members asked detailed questions about who bears issuance costs, how much of the savings derive from lower interest rates versus avoiding a credit downgrade, and whether ORS monitors utilities’ books outside formal proceedings. ORS and witnesses described the review checkpoints and the public‑interest role of ORS in evaluating net benefit.
The committee voted to report the bill favorably.
