The Duke Energy fuel rider lawsuit ended in February 2026 with a split result for North Carolina customers: the state Court of Appeals ruled that the Utilities Commission had illegally let Duke Energy Carolinas and Duke Energy Progress collect roughly $19.1 million in old 2022 fuel costs through their 2024 rate riders, but the court refused to order refunds because the General Assembly had already rewritten the underlying statute while the appeal was pending.1https://www.wral.com/
What the Court of Appeals Decided
On February 18, 2026, a unanimous three-judge panel held that the Utilities Commission erred as a matter of law when it approved Duke’s 2024 fuel rider. Judge John Arrowood, joined by Judges Jefferson Griffin and Michael Stading, wrote that the “plain language” of N.C.G.S. § 62-133.2 limited annual fuel cost true-ups to over- or under-recoveries incurred during the designated test period. Duke could not reach back two years to pull 2022 shortfalls into a 2024 proceeding.
The panel issued two separate unpublished opinions reaching the same conclusion: one for Duke Energy Carolinas (COA25-203) and one for Duke Energy Progress (COA25-310). Both cases were remanded to the Utilities Commission for new orders consistent with the ruling.
Why There Are No Refunds
The court found a violation but declined to order any money returned. The reason sits outside the courtroom.
In July 2025, while the appeal was pending, the North Carolina General Assembly passed Senate Bill 266, the Power Bill Reduction Act, which became Session Law 2025-78. The law amended N.C.G.S. § 62-133.2(d) by striking the phrase “during the test period” and replacing it with “by the electric public utility.” That edit removed the temporal restriction the court found Duke had violated. Governor Josh Stein vetoed the bill on July 2, 2025; the legislature overrode the veto, and the law took effect on July 29, 2025.
The Court of Appeals treated the amendment as an “altering” change rather than a “clarifying” one, meaning the older version of the statute meant what the Public Staff had argued all along. But the court concluded that a refund would be hollow. Under the amended statute, Duke could fold the same 2022 under-recoveries into a future fuel rider and collect the money right back. “Even if we ordered a refund, DEC could incorporate the 2022 under-recovery into future EMFs and recoup the refunded amount,” Judge Arrowood wrote. “As such, ordering a refund would not provide meaningful relief.”
Duke Energy confirmed that customer rates were not changing. The charges already on bills reflected the costs that had been under appeal.
What Duke Did That Triggered the Case
North Carolina utilities pass 100% of their fuel costs — coal, natural gas, uranium, and purchased power — directly to ratepayers through annual fuel cost adjustment riders. Each year the Utilities Commission compares what the utility actually spent on fuel against what it collected and authorizes a true-up.
In the 2024 fuel rider proceeding, Duke Energy Carolinas identified about $8 million in 2022 fuel costs that had not been fully recovered through prior riders and asked to roll that balance into the 2024 adjustment alongside 2023 under-recoveries and projected 2024 costs. The Public Staff, the state agency that represents consumer interests in utility cases, objected. It argued that § 62-133.2 limited the true-up to the immediately preceding test period, and that reaching back to 2022 exceeded what the statute allowed.
The Commission sided with Duke in August 2024, accepting a settlement between the company and a group of industrial customers. The combined amount at issue across Duke Energy Carolinas and Duke Energy Progress reached roughly $19.1 million.1https://www.wral.com/ The Public Staff appealed, and the Court of Appeals agreed with it on the law — just not on the remedy.
The Power Bill Reduction Act
The fuel rider language was one piece of a broader law. Senate Bill 266 began as Senate Bill 261, filed by then-Senator Paul Newton under the title “Energy Security and Affordability Act,” and passed after several revisions.
In addition to eliminating the test-period restriction on fuel cost recovery, the law shifted a larger share of fuel costs onto residential customers, raising their allocation from 50% to 55%. It also allowed the utility to charge ratepayers for financing costs of planned power plants before construction is completed. Supporters said the law could save ratepayers $13 billion by 2050. Analysts at N.C. State University estimated that removing carbon reduction targets could cost ratepayers up to $23 billion in additional fuel expenses over time.
Governor Stein, in his veto message, said the legislation “walks back our state’s commitment to reduce carbon emissions” and would raise electricity costs for families rather than lower them.
What This Means for Your Bill
The court ruling does not change what you are paying now, and the amended statute makes it unlikely that a similar challenge would succeed going forward. Duke can now recover older fuel costs in later riders as a matter of statutory right.
Separately, in November 2025, Duke Energy filed for $1.7 billion in additional revenue over two years, a roughly 15% rate increase split between Duke Energy Carolinas and Duke Energy Progress, with new rates proposed to take effect in January 2027. The company cited $8.3 billion in planned investments for grid modernization, infrastructure hardening, and energy storage.
Attorney General Jeff Jackson formally opposed that request in June 2026, arguing that the filing contained nearly $1.4 billion in “unnecessary charges.” Jackson’s office challenged Duke’s requested return on equity of nearly 11% and proposed a lower rate of 7.4%, which it said would save residential customers about $435 each. “Duke is allowed to earn a profit, but only as much as it needs to meet the growth and demand for energy,” Jackson said. “And we think they overshot the mark.”
Between 2017 and 2024, rising natural gas prices accounted for more than two-thirds of residential rate increases in parts of Duke’s North Carolina service territory. Because the fuel rider system passes fuel-price volatility straight through to customers, that pressure lands directly on monthly bills.