When Hurricane Helene tore through western North Carolina in September 2024, Rutherford Electric Membership Corporation faced an 18-day restoration. Its general manager said the cooperative did not have enough cash to carry the work and had to extend its credit card limit to keep crews in the field.
The episode illustrates a basic challenge of disaster recovery: Restoration work cannot wait for federal reimbursement to arrive, which means utilities can face major costs long before it is clear where the final burden will fall. Helene therefore exposed two related questions: Who has the money to respond immediately when something goes wrong, and who ultimately pays the costs that are not reimbursed?
The Office of State Budget and Management estimated Helene’s damage and recovery needs across North Carolina at about $59.6 billion. Duke Energy restored more than 1.4 million outages, while mountain cooperatives faced more than 230,000 outages at peak. The state has appropriated more than $2 billion for Helene recovery, with federal disaster aid adding substantial support.
Those costs did not disappear once the lights came back on. Some remained with electric cooperatives until reimbursement arrived, some reached utility customers through storm charges, and others reached taxpayers through state and federal aid. What was not readily visible in one place was how those potential costs could move among utilities, customers, and taxpayers when existing protections proved insufficient.
Those questions are becoming more consequential as North Carolina enters a major period of investment in its power system. Electricity demand from data centers and large industrial projects is growing, while regulators are considering major rate, generation, and long-term planning matters.
Under Senate Bill 266, some of the interest and other borrowing costs for certain large power plants designed to provide steady electricity can be charged to customers before construction is complete, provided regulators determine that doing so will save customers money over the life of the project.
Regulators already examine whether these investments are needed, whether their costs are reasonable, and how much customers will pay. As North Carolina commits to more large, long-lived infrastructure, they should also ask what happens financially if a project is damaged, delayed, or lost.
That means knowing what insurance covers, what risks the utility retains, what money is available for repairs or restoration, what other sources of reimbursement exist, and what costs could ultimately reach customers after those protections are accounted for.
Much of that information may already appear across existing filings and regulatory proceedings. The value of a single statement would be to bring those pieces together so regulators can see the potential exposure as a whole. North Carolina could require utilities to provide that picture when seeking approval for major power projects or rate increases associated with significant new investment.
Such a requirement would not create a new agency, impose an insurance mandate, or decide in advance who should bear a future loss. Sensitive security information and detailed insurance terms could also remain confidential. The purpose would be to make the potential financial exposure clear before major commitments are approved.
Utilities and electric cooperatives have good reasons to retain portions of their own risk and rely on mutual aid after disasters, and those arrangements proved their value during Helene. The proposal would not change them. It would simply give regulators a clearer view of the financial exposure that remains after insurance, reserves, and available reimbursement are accounted for.
North Carolina already applies a similar principle after major losses occur. State law allows regulated utilities to spread qualifying storm costs over many years through special bonds when doing so saves customers money compared with traditional recovery, and Duke Energy has said this approach is saving North Carolina customers hundreds of millions of dollars. If the state can scrutinize how major costs should be handled after a disaster, it should bring some of that same discipline to the front end of major investments.
There are limits to what the Utilities Commission can do because it does not regulate electric cooperatives or municipal power systems in the same way it regulates Duke Energy and other investor-owned utilities. For those providers, the General Assembly could require comparable information when state disaster assistance, grants, or other public money is involved.
Senate Bill 266 already contains important customer protections, including annual spending reviews, ongoing reporting, and a requirement that construction financing will save customers money over the life of a project. If regulators determine that project spending was unreasonable or imprudent, customers cannot be charged the interest and other borrowing costs tied to that spending.
Those protections focus largely on how a project is built and financed. They do not provide one clear picture of what insurance covers, what risks remain, what money is available if something goes wrong, and what losses could ultimately reach customers. If North Carolinians are going to pay some borrowing costs for major power projects before those facilities are operating, regulators should understand that exposure as well.
Helene showed how quickly financial burdens can move across the system. A cooperative increased its credit card limit to keep restoration work moving, the state appropriated billions for recovery, utility customers absorbed storm charges, and taxpayers funded disaster assistance. Those responses may all have been necessary, but North Carolina should not wait until the next disaster to determine where the financial burden could land.
The next wave of grid investment is already underway. Before North Carolina approves billions of dollars in new projects, policymakers should be able to answer two basic questions: Who has the money to respond when something goes wrong, and who gets the bill when it is over?
