Did a new law let Duke Energy illegally pass along $1 billion in fuel costs to North Carolina electricity customers? No. Nevertheless, a recent WRAL news report, amplified by the left-of-center activist group Carolina Forward, gave people this false impression.
The flawed reporting is based on two unpublished opinions the North Carolina Court of Appeals released on Feb. 18.
Before addressing the appellate rulings, some background is in order.
State law has allowed Duke’s two North Carolina operations — Duke Energy Carolinas (DEC) and Duke Energy Progress (DEP) — to pass fuel costs along to customers as part of their rates. The North Carolina Utilities Commission oversees fuel rate adjustments each year.
While projecting fuel rates for the coming year, Duke can recover costs incurred during the prior year that were not covered by the prior year’s fuel charge. On the other hand, Duke also must adjust rates downward if it collected more money in charges than it paid in actual fuel expenses, as it did in 2025 (DEC customers saw a rate cut of 6.2 percent, while DEP customers saw a rate cut of 4.5 percent).
During 2023 Utilities Commission proceedings, Duke Energy Carolinas reported an under-recovery of about $998 million, described in a Nov. 13, 2024, commission order as “exceptionally large.” Duke Energy Progress reported in 2023 that its under-recovery for 2022 was about $445 million, also described as “exceptionally large” in the 2024 order.
The Utilities Commission allowed Duke to factor the under-recovery numbers into 2023 rates. Nothing about that process strayed one bit from state law.
When Duke returned to the Utilities Commission in 2024, it reported that it still had not recovered all of the 2022 fuel costs. The DEC under-recovery stood at $8,149,363, while the DEP under-recovery was $9,240,675.
The question before the Utilities Commission was whether Duke could seek to recover those costs when setting its 2024 fuel rates. Commissioners said yes. They approved orders allowing Duke to recover the $17.3 million.
The Utilities Commission’s Public Staff objected. The Public Staff argued that the process of recovering past fuel costs applied only to a single year or “test period.” Duke was entitled under law to seek recovery in 2024 of under-recovered fuel costs from 2023, but the company could no longer seek additional money from ratepayers for 2022 fuel costs, according to the Public Staff’s legal argument. As Duke collected the money, the Public Staff pursued a legal challenge.
That was the issue before the North Carolina Court of Appeals. Judges were asked to decide whether Duke had legal authority to seek roughly $17.3 million in unrecovered fuel costs from ratepayers.
A unanimous three-judge appellate panel agreed with the Public Staff and ruled against the Utilities Commission.
“Here, N.C.G.S. § 62-133.2’s plain language indicates that the statute was intended to provide a true-up only for the fuel costs that were incurred during the test period,” Judge John Arrowood wrote on Feb. 18. In addition, “decades of prior practice and legislative acquiescence demonstrate the legislative intent to limit true-ups only to under-recoveries incurred in the test period.”
The Utilities Commission “erred as a matter of law” in allowing Duke to incorporate 2022 fuel cost recovery in its 2024 rates, Arrowood explained.
Yet that error would not lead to customer refunds.
A provision of 2025’s Senate Bill 266 (enacted as Session Law 2025-78) “nullifies the effectiveness of that remedy,” Arrowood wrote.
State lawmakers approved SB 266 with bipartisan votes in June 2025.
“While Session Law 2025-78 does not retroactively apply to the issue of whether the Commission erred, it does allow for public utilities in future proceedings to reach back and true-up under-recoveries that were incurred prior to the test period,” Arrowood explained.
Had the Appeals Court ordered a refund of the $17.3 million for DEC and DEP customers, Duke could have recovered the refunds in future fuel rate proceedings. “As such, ordering a refund would not provide meaningful relief,” Arrowood concluded.
Arrowood, a Democrat, was joined by two Republican judges, Jefferson Griffin and Michael Stading, in making the February decision.
Now for the questionable media reporting.
The facts in WRAL’s original story line up pretty well with the case’s details. One difference: The report cited Duke as stating that the portion of the fuel costs challenged on appeal was $19.1 million. The source of that number is unclear, but it’s within striking distance of the $17.3 million suggested by court documents.
Yet reporter Liz McLaughlin painted a much different picture on social media.
“A court says Duke’s $1 BILLION fuel charge was wrong — but you’re not getting a refund,” according to the text of McLaughlin’s Facebook post.
Assuming that McLaughlin was referring to the $998 million DEC reported in under-recovered 2022 fuel costs, she was wrong. Most of that “BILLION” — all but $8.1 million of it — was recovered in 2023 without any objection from the Utilities Commission, the Public Staff, or the Appeals Court.
“No refunds because lawmakers (including a former Duke exec) changed the law while the case was still pending,” McLaughlin added on social media.
That claim contradicted her own TV report.
“While the appeal was pending, lawmakers amended the statute in 2025 through Senate Bill 266, removing the test-period restriction cited by the court,” according to the WRAL story.
“An earlier bill, Senate Bill 261, was sponsored by then–Sen. Paul Newton, a Cabarrus County Republican and former president of Duke Energy’s North Carolina operations, but it did not contain the test-period change. Newton resigned from the Senate in March 2025. The provision altering the fuel statute was added later in the legislative process and became law in July.”
Let’s recap. Newton, “the former Duke exec,” sponsored a bill that didn’t include the provision that allowed for the 2022 fuel cost recovery. His colleagues approved a different bill that allowed for the fuel cost recovery four months after Newton left the Senate.
Carolina Forward, posting on X on Feb. 20, mangled the facts to an even greater extent.
“This is totally bonkers: the leaders of North Carolina’s state legislature just saved Duke Energy a cool billion dollars, at the direct expense of consumers,” the left-of-center activist group asserted.
Wrong. The group can complain about $17.3 million, but nothing about the legal dispute approached a “cool billion.”
The group also mischaracterized the timeline.
“Here’s what happened: in 2022, Duke Energy says it incurred $998 million in fuel costs for mostly natural gas and coal. But it didn’t report those costs until 2023, and then waited until 2024 to pass along a rate increase to consumers to let it recover those costs.”
“Problem is, waiting that long was illegal.”
Wrong again. Duke reported costs in 2023 as it had reported costs in all previous years. The Utilities Commission followed its normal procedure in approving rates that would allow Duke to recover those costs. Duke didn’t wait to report anything. By 2024 DEC reported that the rates approved for 2023 left the company $8.1 million short of recovering the initial $998 million shortfall. Meanwhile, DEC cited an additional $9.2 million in unrecovered 2022 costs.
Carolina Forward described SB 266 as Duke Energy’s “trick up its sleeve.”
“Duke Energy spends a few million on buying lawmakers so it makes a billion dollars overcharging North Carolina consumers. Pretty good ROI,” the activist group asserted.
Regardless of what one thinks about Duke Energy, its lobbying efforts, or the provisions of SB 266, nothing about the change in state law helped the utility collect an extra “billion dollars overcharging” consumers.
WRAL and Carolina Forward are free to argue that Duke Energy should not be able to pass fuel costs along to ratepayers. But that system predated SB 266. Provisions in the 2025 legislation did nothing to help the utility collect “a cool billion.” In reality, the benefit to the company was less than 2% of that sum — even if one goes with WRAL’s number of $19.1 million rather than the $17.3 million cited in legal documents.
