Tillis criticizes energy policy, warns GOP faces losses as NC debates data center costs

U.S. Sen. Thom Tillis criticized federal decisions to halt renewable energy projects and abruptly withdraw clean energy incentives Thursday, saying the country needs more electricity and businesses need certainty to build it.

Speaking as North Carolina voters began casting early ballots in the midterm elections, the Republican senator also warned that his party faces “almost certain losses” and said poorly designed policies were giving opponents ammunition.

“When you make dumb policy, the ads write themselves,” Tillis said during the Making Energy Work conference in Cary.

North Carolina is weighing how to meet growing electricity demand without leaving households paying for power plants and equipment built to serve data centers.

A day before the conference, Attorney General Jeff Jackson and Gov. Josh Stein said Duke Energy’s proposed customer protections leave an important gap: Data centers would pay for equipment connecting them to the grid, but the proposal does not require them to cover new power plants needed to supply their electricity.

Jackson said the proposal does not require large customers to pay for new power generation their demand makes necessary. Jackson also called for a separate customer rate class to better track the costs of serving data centers.

“This is a massive step forward in making sure data centers pay their fair share — but we’re not done yet,” Jackson said in Wednesday’s announcement.

U.S. Rep. Tim Moore, another North Carolina Republican who spoke at the conference, said companies building and profiting from data centers should bear the costs of serving them.

“We want to make sure that the companies that are... building these and generating the profits... are responsible for the cost and that those don’t get passed on to the ratepayers,” Moore said.

Duke announced the proposed agreement Oct. 7 with North Carolina Public Staff, 

a separate state agency representing utility customers, along with technology companies and other parties. The agreement requires approval from the North Carolina Utilities Commission.

The proposal would require upfront payments for equipment built specifically for large customers, long-term contracts and minimum monthly bills even if customers use less electricity than expected. It also includes financial protections if customers leave early.

Duke says the agreement would strengthen existing protections for other customers.

“It’s simple — data centers will pay upfront for all costs to connect to the grid,” Duke Energy North Carolina President Kendal Bowman said.

The distinction between paying to connect to the grid and paying for new power generation remains central to the debate.

Matt Abele of the North Carolina Sustainable Energy Association, a clean energy advocacy organization, said questions remain about whether large customers will cover all the costs of upgrading the system to serve them.

“Our belief is, as data centers come into the state of North Carolina, they need to be powered clean and they need to cover 100% of their costs,” Abele said.

Producing enough electricity is another challenge. Tillis questioned federal decisions to stop renewable energy projects while demand grows.

“Why are we canceling all these power purchase agreements for large-scale renewable projects and creating uncertainty there when we know we need every bit of it that can be generated?” Tillis said.

Tillis pointed to a permitting deal under consideration in Congress as a way to speed up approval of energy projects. Tillis said the agreement has better-than-even odds of passing after the election, though political disagreements and year-end deadlines could get in the way.

“The only reason I’d see it not getting done is people are just either the Democrats feel emboldened because maybe they’ve won the House, the Republicans feel annoyed because maybe they lost the House,” Tillis said.

Abele said getting that agreement passed could help North Carolina bring more clean energy onto the grid.

“Finding opportunities to expedite the permitting and bring those resources online … is going to be so imperative moving forward,” Abele said.

Tillis called for a mix of energy sources, criticizing both an exclusively renewable approach and one dependent entirely on fossil fuels.

Tillis also said renewable energy businesses should eventually operate without government subsidies. Tillis’ criticism centered on how abruptly the policy changes disrupted investments already underway.

“It wasn’t even paying attention to the portfolio of businesses already out there,” Tillis said.

Tillis said health care concerns were the primary reason for opposing President Donald Trump’s tax-and-spending bill, though energy policy was another concern.

Moore said ending federal credits for home energy improvements was part of a broader effort to lower taxes.

WRAL asked Moore how eliminating credits for insulation, heat pumps and rooftop solar fits with making energy more affordable.

“There were some of these programs that are great programs to be able to have that we simply couldn’t have carveouts for if we were going to otherwise lower the rate,” Moore said.

Moore said technologies such as solar and electric vehicles can still make financial sense without federal tax credits.

The law ended the energy-efficient home improvement credit and the residential clean energy credit for new qualifying work after Dec. 31, 2025, according to the IRS. The residential credit previously covered 30% of qualifying solar and battery storage costs.

Abele said rising electricity costs continue to make solar and battery storage attractive to homeowners despite the loss of federal incentives.

Moore also faced questions about North Carolina’s repeal of a carbon reduction deadline negotiated while Moore was House speaker.

The bipartisan 2021 law called for a 70% reduction in carbon dioxide emissions from electric utilities’ power plants from 2005 levels by 2030. Lawmakers eliminated that deadline in 2025 while retaining the goal of carbon neutrality by 2050.

Asked to reconcile the repeal with the earlier commitment, Moore said electricity demand had exceeded expectations. Moore said existing power plants should remain available until enough generation is in place to meet ongoing needs.

Supporters of the repeal said it would improve reliability and affordability. As WRAL previously reported, critics warned that greater reliance on natural gas could expose customers to higher fuel costs and price volatility.

Meanwhile, state and federal regulators are considering different ways to protect customers from data center costs.

Duke’s proposed state agreement, announced Oct. 7, would require large customers to pay upfront for equipment built exclusively for them, commit to long-term contracts and pay minimum monthly bills even if they use less electricity than expected. The proposal also includes financial protections if customers leave early.

Jackson said those measures are progress but called for additional requirements covering new power plants and a separate billing category to better track the costs of serving large customers.

In a separate decision Oct. 9, federal regulators approved Duke Energy Carolinas’ rules for delivering electricity to large users over high-voltage power lines while encouraging stronger protections against passing costs to other customers. That decision does not resolve the proposal pending before North Carolina regulators.

With early voting underway, Tillis said Republicans need to focus on affordability and push back against their own party’s president when policies fall short.

“I think the Republicans need to be the party that stops caving when the White House is controlled by their party,” Tillis said.