HB 1063, the “Ratepayer and Resource Protection Act,” would create a new regulatory framework for large-scale data centers in North Carolina. It defines a large data center as one with at least 40 megawatts of projected peak electric demand or more than one billion liters of annual water use, and requires proposed facilities to file a preconstruction disclosure with the Utilities Commission, the Department of Environmental Quality, and local governments before construction begins. Large data centers would also need a certificate of operation from the Utilities Commission, showing compliance with clean-generation, water-use, and cost-allocation requirements before they can begin construction or operation.
The bill would require large data centers to install on-site clean generation equal to at least 25% of projected peak demand, with no credit for off-site renewable energy credits or virtual power purchase agreements. It directs the Utilities Commission to establish special electric rate schedules so that data centers pay the full marginal cost of service, including incremental generation, transmission, distribution, and substation costs, and similarly requires water and sewer service to be priced at full marginal cost. The bill also authorizes the Commission to increase the on-site clean generation requirement, grant limited variances, and suspend or revoke certificates if a facility is not complying. Annual reporting on electricity use, water use, on-site generation, and cooling efficiency would be required, and those reports would be public records.
HB 1063 would also change tax and incentive policy by repealing certain sales tax exemptions for data centers, making them ineligible for state economic development grants, loans, and other incentives, and prohibiting local governments from offering tax abatements, rebates, subsidies, or similar financial assistance to data centers. It further amends utility law to clarify that data centers are not included in certain existing information technology incentive categories and makes related changes to fuel cost recovery and performance-based regulation provisions. The bill appropriates recurring funds to the Department of Environmental Quality and the Utilities Commission to implement the new requirements.
The overall sentiment reflected in the bill text is strongly protective of ratepayers, water resources, and grid reliability, and the legislation is framed as a response to concerns that data centers shift infrastructure costs onto households and small businesses. Because there are no committee transcripts or recorded votes in the provided material, there is no documented floor or committee debate to show support or opposition. Based on the bill’s structure, likely support would come from ratepayer advocates, utility regulators, and water-conservation interests, while likely opposition would come from data center developers, technology companies, local economic development interests, and possibly utilities concerned about added regulatory complexity and investment constraints.
The main points of contention are likely to be the mandatory on-site clean generation requirement, the prohibition on off-site renewable energy credits, the requirement that data centers bear all marginal infrastructure costs, and the ban on state and local incentives. Another likely dispute is whether the bill would discourage data center investment and job creation in North Carolina, versus whether it is necessary to prevent utility rate increases, water stress, and stranded infrastructure costs for other customers. The bill had only been referred to the House Rules, Calendar, and Operations Committee as of the last action shown, so no formal vote history is available in the provided record.
The bill would add a new Article 6C to Chapter 62 of the General Statutes governing data centers, while also amending Chapter 143 to impose state water-use standards and modifying tax and economic development statutes to exclude data centers from certain incentives. It would require Utilities Commission certification and ongoing reporting for large data centers, direct the Department of Environmental Quality to adopt water-use rules, repeal specified sales tax exemptions, and bar both state and local incentive support for data centers. It also makes related changes to utility rate-setting and performance-based regulation provisions, and appropriates recurring funds to DEQ and the Utilities Commission for implementation.
The bill is framed in strongly protective terms, emphasizing ratepayer protection, water conservation, and electric grid reliability. In the absence of committee transcripts or votes, there is no recorded legislative debate in the provided materials, but the bill’s design suggests a policy preference for shifting costs and compliance obligations onto large data center operators rather than utility customers or taxpayers. The likely political tone is supportive among consumer, environmental, and utility-cost advocates, and skeptical among industry and economic development stakeholders.
The most likely areas of contention are the bill’s strict cost-allocation rules, the requirement for 25% on-site clean generation, the ban on off-site renewable energy credits, and the prohibition on state and local incentives. Opponents would likely argue that these provisions could make North Carolina less competitive for data center investment and could be difficult to satisfy technologically or economically, while supporters would argue they are necessary to prevent cost-shifting to residential and small-business customers and to protect water and grid resources. The bill also creates tension between state-level economic development policy and local land-use authority, although it preserves zoning powers.