The N.C. House of Representatives quickly moved an energy bill Tuesday that would place guardrails around data center development in North Carolina and require Duke Energy to obtain permission to build a large new nuclear plant before retiring coal or gas plants.
"The Ratepayer Protection Act puts our families and small businesses first by making data centers pay their fair share and strengthen grid reliability," Rep. Matthew Winslow, R-Franklin, one of the bill's authors, said during the House Commerce and Economic Development Committee.
The updated version of Senate Bill 730 represents the most sweeping effort by North Carolina yet to respond to concerns about how large-scale data centers are impacting communities across the state. It would require that large data centers analyze the impact noise from the facility would have within 500 feet of the property line and that they use closed-loop cooling systems in order to limit the facility's water usage.
The bill would also prevent local governments from offering data centers economic development incentives like property tax breaks.
Data center industry officials believe that provision could impact North Carolina's ability to recruit data centers. Kara Bunder, the state policy director for the Data Center Coalition, pointed to that as one of three provisions the trade group is concerned about, along with the mandate on cooling technologies and requiring that electricity service contracts contain certain provisions.
Manufacturers also expressed concern Tuesday about a section of the bill requiring data centers that use more than 100 megawatts of electricity in a month to have a power purchase contracts that last at least 15 years and mandate that the facility cover all of the costs of providing electricity to it.
"Data centers must cover all new infrastructure and energy costs so they don't shift them to ratepayers," Winslow said.
Speaking on behalf of the Carolina Industrial Group for Fair Utility Rates, a coalition of large industrial customers, lobbyist Susan Vick said some manufacturers are worried they could end up being part of the class that is deemed a data center if they add technology into their processes.
"These large legacy industrial customers are concerned with the unintended consequences of using emerging, state-of-the-art technology in production of pipe, agriculture and other services," Vick said.
Updating nuclear energy provision
The bill also includes a provision requiring Duke Energy to obtain a certificate of public convenience and necessity for a nuclear plant with at least 1,000 megawatts of capacity before it can retire coal or natural gas plants.
Republican lawmakers are keenly interested in nuclear power because it offers virtually constant power for decades, but that comes with concerns about initial construction cost and potential construction delays.
"We want to give the Utilities Commission direction and policy that baseload generation, as well as affordability and reliability, are primary on all of this stuff because we are growing," Rep. Dean Arp, R-Union, told the Commerce committee.
That language has been updated in the latest version of the bill to make it clear that Duke Energy would need permission to build a single nuclear facility before obtaining permission from the Utilities Commission retire older fossil fuel-fired plants.
Previously, that language could have been understood to mean that Duke needed to bring a nuclear plant online to replace all of the fossil fuel plants it wants to replace. The state's monopoly utility has plans to start retiring its remaining North Carolina coal plants in 2031, with the final two shuttering in 2040.
Rep. Brandon Lofton, D-Mecklenburg, questioned how the nuclear approvals would sync up with coal plant retirements.
"I guess I'm wondering, why specify or restrict the commission to say you have to wait for construction of nuclear facilities when my understanding is that could take a number of years, as opposed to leaving the commission with the flexibility to achieve the least-cost path to protect ratepayers?" Lofton said.
Arp responded, "Help me get nuclear earlier, then, because that's the thing we want to do."
Duke Energy has six nuclear plants in North and South Carolina, with Wake County's Shearon Harris plant built in 1987 representing the most recent one.
In the most recent resource plan it filed, Duke said the Shearon Harris plant and the William States Lee III Nuclear Station in Cherokee County, S.C., offer the quickest route for it to build new nuclear reactors. But even there, it said, moving forward would require "significant amendments or revisions" to previous federal licensing.
The House Commerce Committee and House Rules Committee both voted to approve the bill Tuesday, sending it to the House floor. If approved there, the Senate would next consider the updated version of the legislation.
