- Duke Energy announces a compromise on a two-year plan of electric rate hikes, but the Attorney General says it's not good enough.

And lawmakers return to Raleigh next week.

Could they address a ban on homeless camps?

This is State Lines.

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♪ - Welcome to State Lines.

- Welcome to State Lines.

I'm Kelly McCullen.

Joining me today, Claudia Rivera-Cotto of Enlace Latino NC.

To her right, Donald Bryson of the John Locke Foundation, Dawn Vaughan with the News and Observer in Seat 3, and Bruce Thompson of Parker Poe in Seat 4.

Hello, everyone.

- Hello.

- Not a bad week, slow week for me digging through stories, but still activity nonetheless.

We're gonna start with you, Donald.

You'll get the first one, a good one.

Energy, Duke Energy and the state consumer watchdog have agreed to a two-year electric bill rate hike for you that would total 9.5%.

The first year's hike would be 5.9%.

That second year would increase about 3.6%.

Duke Energy originally proposed double-digit rate hikes and backed off of those.

State Attorney General Jeff Jackson says the 9.5% compromise still too high that his office will continue challenging that rate hike.

The AG's office opposes Duke Energy's request as well for 9.8% return on equity, saying it should fall somewhere around 7.4%, Donald.

We're talking about profit margin.

We're talking about rate hikes for any electricity bill customer.

- Right.

And we do a lot of energy policy research at the John Locke Foundation.

I definitely have some thoughts and opinions on this one.

It's one of those political situations where you're sort of frustrated with everybody, as with most political situations, I think.

My first question is, why was Duke Energy okay with backing off of 18% down to 9.5%?

What's the difference?

Why did you start with such a high number?

The second thing is, why would Attorney General Jackson and his political cadre over there, why don't they understand that?

We passed a carbon law back in 2021 that is making Duke Energy change its resource plan.

They have all of these coal power plants all around the state that are financed.

They are paid for.

And we're saying, you have to shut those down.

You have to build more stuff.

And Duke's saying, well, that costs money.

And if you look at the resource plan they put out there, they're trying to recoup $1.2 billion in costs.

More than 20% of that is just for battery storage that they otherwise wouldn't have had to build had we not passed the carbon plan.

So it's kind of a frustrating thing that, yeah, if you want to change how we have electricity in this state, it's going to cost some money.

And why Jeff Jackson thinks it's the Attorney General's job to step in, I'm still confused.

- What are the politics, Dawn, of having Jeff Jackson get involved?

I guess he's representing the people, if you will.

- He is.

He's Attorney General.

He's also a Democrat.

I think energy policy has pretty clear partisan divides.

I think for the average person, I'm not an energy policy expert at all, I think the average person sees high bills and they're not happy about it.

And that's why there's this constant controversy over what the rates are.

And people will, like, you know, the argument of what you want for energy policy and the costs associated with that are, like, integral to all of the debates here.

But again, it's what are people paying at the end of the day.

And a lot of people aren't happy about that.

I've been to public hearings with people mad at what their energy costs are, like, always.

It's a never-ending story, really.

- Claudia, about rate increases.

Politicians can weigh in and say anything's too high if it makes them more popular.

But how do we balance a business trying to return some investment, invest in itself, versus politicians who say, well, that's too much, you don't need to make that much money?

- Yeah, I think that particularly thinking about the consumers and the politicians trying to advocate for the consumers, that's a really high concern, having, like, electricity bill go up on the side of, like, also other things going up, like groceries and gas, for example.

But at the same time, we also see that demand increasing in terms of the population growth.

But also, when we think about data centers, for example, in North Carolina, I think that's going to be a big discussion moving forward.

Particularly in this settlement, we see that there is an open door to having some conversations about what it means for maybe having some separate rates for the ones that use more electricity, such as data centers, versus for regular individuals.

And I think that conversation is something that will be very important to look at, thinking about what particularly the follow-up on this topic is.

- This watchdog, this state consumer watchdog, Donald, do you know anything about this position?

It's always existed, but it's sort of quiet.

It pops up when they do rate increases.

This is a negotiated settlement that two sides of some debate finds fair.

- I'm assuming you're talking about the State Utilities Commission.

- Yeah, I mean, maybe it is.

Are they the watchdog?

- Yeah, I mean, the State Utilities Commission is the watchdog.

It's a fascinating government body.

It's a quasi-judicial body.

Attorneys go on record.

You can be cross-examined with all the interveners that are in the process.

Everything is negotiated through the Utilities Commission.

And so the Utilities Commission, and to Claudia's point, their job is to make sure that electricity is produced at the least cost possible to people in North Carolina.

We have Monopoly Utility in Duke Energy and Dominion a little bit up in the northeast part of the state.

And so they get different powers, such as eminent domain and things like that.

And for that, state laws says they have to go with least cost.

But when we start prescribing what their energy looks like, well, then we've changed what least cost can possibly be.

- Our next topic refers to state lawmakers.

Some of them are coming back next week to hold a legislative session.

We're told it's the Senate.

One potential veto overrides out there as well could address a stalemate over homeless camps on public property.

Governor Josh Stein vetoed legislation to ban homeless camping on public property.

The same bill would allow private lawsuits against cities that wouldn't comply with state law.

It would create drug-free zones near homeless shelters, but it would allow some encampments if local city leaders could prove they didn't have enough shelter beds.

Governor called the bill, you know, a substantial burden on local governments from a financial perspective.

So, governor steps in and says, unfunded mandate for homeless camps.

You can ban them, but it's going to cost local taxpayers a lot.

- So politically, I think this shows a debate that we've been seeing in North Carolina, particularly when it comes to, is the state allowed to, and how much authority can they have for local governments?

That's one side.

And then on the other side, I think another important topic is just who is actually, and what are the ways that we actually can address homelessness?

So we obviously have the people that are saying that the Enforcement Act spec is what's going to work, and this bill addresses that.

But then there's also the other aspect of it, which is maybe more social services and resources that can help individuals, as we've seen in other places, like Housing First initiatives, for example, in Houston.

That's something that people are looking forward to maybe being options for North Carolina, but particularly for researchers, it's not just one thing that can be done to address that, but it has to be an overall look at what are the different options for the communities.

- Bruce, with these bills that are vetoed, they just float out there, could pop up on the calendar at any time.

But as you said, you told us off camera that Senate's coming back to work on technical corrections to a budget bill.

Is there enough room to discuss a veto override when you have so many little minor details to work out in the state budget that is law now?

- Yeah, I think it's a situation where it's always fluid.

In the Senate, they have the veto-proof majority, they can override pretty easily.

They probably won't move on it unless the House does first.

I think it's a math question of when the Speaker looks out over who is there on that particular day, if he has the votes to override a veto, it's going to come back up.

I think this issue is part of a bigger discussion.

It's not just about the homeless issue, it's about unfunded mandates to local governments.

What we're seeing happening is policy on the federal level and the state level that's putting more responsibility on the local governments, but not providing them the appropriations to do that.

- And not all local governments have the same approach.

Once upon a time, before I covered state government, I covered local government in the Durham community, and they had a lot of different programs and plans over many years to address homelessness.

And homelessness camps are visible, but a lot of the homelessness issue is not seen.

That's a lot of women and children, and I heard a lot of stories from people that worked in working to end this, and how people are desperate for housing at so many levels.

And that was even at a time several years ago now, before things are so visible as they are now.

I think this is a much more visible issue with the encampments than we've seen in the past.

- Donald, this issue, you can paint this as Josh Stein voted, he vetoed a bill that would do something about homelessness, but he's looking at unfunded mandates.

Yet another cost pushed down to city and county governments.

Where do you stand on it?

- Well, I mean, I'm not a fan of unfunded mandates at all.

I think that should be no surprise to anyone.

This is, I think, a complicated issue.

I don't think any town or city in North Carolina wants homeless encampments.

And we should be very clear that allowing unlimited camping is not a compassionate policy, right?

These people are not flourishing, they're not thriving.

We should do something about that.

But sort of stamping those encampments out just disperses the problem.

The broader problem is homelessness, right?

These people are there for a variety of reasons, some of their own making, some not of their own making.

And I think there's more systemic issue that we need to talk about.

And hopefully some counties and cities will be talking about it.

But yeah, perhaps this is something that should be handled more at a community level, at the town and city, county level, than at a statewide level.

- Very expensive though, Don.

I mean, the unfunded mandate, we've seen this coming down with the SNAP, the food stamp program.

How far can county governments take on, and then you're gonna face up with this, you're gonna square up against this property tax cap in November?

- Well, I mean, that's a great question, but I mean, let's be very clear.

I don't think we've reached the Goldilocks level of government spending in a lot of these counties and city level.

And a lot of these counties are trying to come in under the wire to raise property taxes now.

For reasons we don't know yet, they just wanna come in under the wire.

- Just like that one topic, this leads to all sorts of other discussions, Claudia.

State Senate Republicans are hoping to push through new state level regulations on North Carolina's hemp industry.

Federal hemp regulations will take effect this November, 2026, which will limit any THC levels in hemp products to trace amounts.

There is bipartisan opinion that intoxicating hemp products might be more potent than what we call marijuana.

State Senate leaders say it's time to align state hemp rules with incoming federal regulations and ban sales to people under 21 years old.

Dawn, this bill confuses me.

It's very important to some Senate Republicans to pass it.

When it looks like the Mitch McConnell hemp regulation at the federal level just wipes out the industry, or so they say.

- So it's good to be in line with all different levels of government, if you wanna follow that.

I think what this particular bill does is shine a much brighter light on this current House versus Senate situation that we're having this year.

I didn't cover this particular bill, but I was in the Senate for the session when they were talking about this.

The House was already done.

They left.

And the Senate was talking about why this is so important and why you need to pass this and the age restrictions and all these different safety concerns they have with children accessing these products and everything.

And the House was done not talking about it.

So this has been a Senate priority for a long time.

Everything dealing with hemp and marijuana has really been on the Senate side more in the House for several years now.

Different legislation, medical marijuana pushed by Senate Republicans has not had support in the House.

I feel like this is another example of the two chambers not really being anywhere nearing each other on something.

This might be what finally they're able to pull off, but it get, or it could just be now that lawmakers are coming back, it's something to trade with something else that they want.

- Bruce, the big deal here would be setting a state law of sales at 21 and up as opposed to 18 and up.

Is that the big difference as you interpret this vast law?

- I think it has more to do with the reactions to the changes at the federal level because there was this exemption that created this hemp industry essentially.

And people, the entrepreneurs are always, I think, a step ahead of the lawmakers sometimes because they figured out a way to take advantage of the loophole and create products that are similar to cannabis.

But now the federal government has pulled that back to say that only trace amounts of THC can be in these products.

And I think what the state's trying to do is get aligned with that.

Now frankly, once that kicks in, I don't know that the age is gonna make much of a difference because these aren't gonna be intoxicating products anymore.

I think the thing we have to watch out for is there were a lot of people who were surprised about the federal change.

You mentioned Senator McConnell, he essentially slipped it into a budget bill.

And there's a lot of talk in Washington about extending that out a little bit.

So potentially it gives the state a little more time to react.

- It's hard to add regulations after something's already happened.

I think we've seen this across issues and that's why there's a lot of pushback, especially with businesses.

- Claudia, do they frontline this issue or are there too many other problems in North Carolina heading into the election to worry about hemp right now?

- Well, it has bipartisan support, so I believe that it might move in the North Carolina legislature, particularly when it comes to the topic of age restriction.

I think that is something that from both parties, people are interested in moving forward.

And then also with the momentum of the federal changes now in November for hemp restrictions, I think that also is pushing it a little bit more than it was previously in other instances in the North Carolina General Assembly.

And another aspect of it that I think would be interesting to highlight is just like how, as you were mentioning, the law from 2018 essentially created a loophole that allowed Delta A and THCA to still be legal and less regulated than other hemp products.

So the industry really just went up and decided to take advantage of this.

So now it's just seeing how to regulate an industry that had really outpaced the law.

- Donald, if the legislature put this to a floor vote, legalizing some form of cannabis usage or hemp usage, what happens?

It passes, doesn't it?

- I mean, it passes the Senate.

The House, it's really, the House is a lot more difficult.

There are a lot more cats to herd in the House.

And I'm honestly not sure how that would go over on the House side, because on the one side it is a restriction of what the current market is.

It's falling in line with where the federal government's going, but at the same time, it does appear to be legitimizing something.

And you might have some sort of, on the conservative Christian side of that chamber, just say no altogether.

I don't know how that would go.

- You also have some lame ducks who either chose not to run again or who lost their primaries and have plenty of hills that they can die on if they want to, because they can just dig in for what they want.

And it's not a compromise-y time as opposed to somebody who's trying to get reelected and appealing to the broadest group of voters.

- That's right.

- Is this an issue that should come to a full floor vote at this point?

The Cherokee have legalized some sales.

The sun still rose over that nation the next day.

But I also see people have a fear that there's a social contagion with legalizing cannabis.

- Yeah, I do think if this got to a floor vote in the House, be it the medical marijuana bill or something else along those lines, it would pass.

The issue is the unwritten rule that the Republican caucus doesn't want to bring it to the floor unless they have a majority of their members.

- What I wanted to ask, is this still a lower-tier priority that it needs to be boxed into one caucus or should it come out and be discussed as a full debate of both caucuses?

- Well, I think that all issues, I mean, frankly, should get that kind of sunlight on them.

So I would include that with it.

- I think it's, well, also just it's interesting to watch Virginia and what they've done with marijuana law changes and how a lot of the same thing of like stuff was out here and then all of a sudden how do you regulate, how do you put these parameters in?

So North Carolina has some lessons to learn, I think.

- All right, Bruce, need to pick your brain about the State Board of Elections recommending changes to mail-in voting that could take effect for the fall '26 elections.

The State Board of Elections spokes team says the new rules would align with current state law, ballots could be rejected if the voter certification signature incorrectly placed on that ballot.

Mail-in ballot envelopes would need to be correctly sealed or double-sealed.

Voters would be contacted within one business day with instructions on curing their ballot, Bruce.

There's a people in, I don't wanna call it the media, our colleagues out here are saying one way to look at this is Republicans make it easier to toss ballots.

And the other way to look at this is new rules will strengthen that every ballot that comes in meets a standard before it's delivered.

How should we view it?

- Here's my biggest issue.

We're 100 days out from the midterm elections and we're still talking about fluid regulations for voting and counting ballots.

When does it stop?

When do both sides start to understand that the more we attack the voting system and voting rights that it has an impact on people's confidence in it?

And you still have the president talking about this SAVE Act and you had Senator Tillis come out and say, "How in the world can you do something like this right on the eve of an election?"

But that's my biggest concern is that the rules of engagement continue to change and I don't know when that stops.

- Claudia, you're with Enlace Latino NC.

You have an audience, they're very interested in voting integrity.

What's in your readership community about this issue of making sure ballots are not only safe and fair, but also easily cured if there's a problem?

- Yeah, I think that part of what we're trying to do right now is inform the voters of any of the changes that might come to play for this November election and particularly thinking about these changes on the administration of the ballots because I think that's primarily what's happening right now.

Those are some of the main changes that people need to look out and for example, one specific distinction for this changes, it's what's considered curated versus non-curated.

So if envelope inside the biggest envelope that is already closed, but the one inside is not, that would be considered a non-curated issue.

So essentially the ballot would be discarded and the person would need to do a new vote.

So this was one of the main issues during that meeting when I was listening to it and the voters are a little bit concerned about what this will mean for the November elections.

And for example, if they send mail-in ballots and their vote gets discarded, how much time they will actually have to make that new vote.

So it is really a time issue pressure right now that we're seeing and also looking into the approval that it still needs to have at the rules review commission.

This might happen in August.

So thinking about that, that also draws like the line from when this is actually approved to when the voter will make that final vote really short.

So it's really a time issue at this point.

- Donald, but we're in July and we are discussing these new rules or a reinforcement of the rules that could cost you your ballot if you mail in and don't do everything just right.

Do voters have enough time to know that before they mail their ballot in?

- If we move fast enough, they have enough time.

Although I'm very sympathetic to what Bruce said and what Claudia said that it's July.

Why are we still doing new rules?

Why are we doing rules this year?

Why couldn't we have done rules last year?

I agree with all of those, but I think if we move fast enough and get this done in August before people are requesting their mail-in ballot and they get the instructions back with their ballot, then yes, it can absolutely be fine.

But we're still talking about a substantial amount of ballots.

I think 298,000 people voted by mail in the last election.

That's 5% of ballots cast year before last.

It's a lot of people.

We wanna make sure that the rules are set early enough and so that the information is clear enough when they do get their ballots.

- The biggest red flag for me is we're seeing the State Board of Elections create a lot of opportunities for a local board of election in a partisan vote or the State Board of Elections in a partisan vote to kick out what should be a valid and counted ballot.

There are just too many opportunities for the politics to overrule what the law is, and that's what frightens me.

- We all use the same calendar.

We all have the same calendar.

You know when the elections are gonna be and how many days and weeks and months.

So there is a way to do stuff in a timely fashion, get your business together, and give yourself a long runway and then time to tell everybody about it ahead of time.

It's not a surprise that the election is coming up.

- Dawn, it's one thing.

More people will read about controversy on a partisan basis than they will read articles telling you how to vote correctly.

What is the media's role in your opinion to making sure voters can at least have a great shot at being informed of any rules changes that may come in August?

- Sure, get everything out there as quick as we know the information and get it out there repeatedly.

We do a lot of explainer stories at the News and Observer of like here's everything you need to know about early voting, about if you're going in person, you know on election day, all of the different things, who the candidates are, what their positions are, everything.

There's a lot of work ahead in the coming months.

- You're not kidding.

Final topic, U.S.

Senator Ted Budd testified before Congress on North Carolina's need for more Hurricane Helene relief funding.

Senator Budd did thank the Trump administration for its efforts to speed the release of FEMA funding, but relief funding has been strained by debris removal and reconstruction and oh yeah, the mountains, it's hard to work up there.

The Senator says HUD funding and funding used by the Environmental Protection Agency has largely been accounted.

- Blue Ridge Mountains challenging terrain has made it uniquely difficult for federal programs to operate, resulting in delays and inefficiencies.

And there's still work to be done.

Too many projects in Western North Carolina have stalled due to insufficient funding or because of financial shortfalls from expensive debris removal and rebuilding efforts.

- Dawn, well, Ted Budd has a low profile as a U.S.

Senator.

He's just that type of Senator, but on this one, he's testifying, he's bucking the Trump administration.

It does seem objectively he's fighting for Western North Carolina funding.

- Yeah, I think every, the lessons learned from Helene, you know, things like you were saying with the mountains, like that's a very different situation post-hurricane than on the coast.

There's a lot of lessons learned there.

And we're not hearing as much controversy about Helene recovery as we did in the first, I can't remember how many months it's been now since it happened.

And I think that at some point you need to do what is best for the people of North Carolina.

It seems like everyone in the North Carolina politicians, both parties have come together about getting the job done, getting things finished as quickly as you can, even with some of those hurdles.

- Real quickly around the horn, about 90 seconds left.

Bruce, this is a Republican going out there as a populist on behalf of a part of the state that can vote very Democratic.

You'll get credit for his work?

- I think he will.

I mean, I think it's all part of Senator Budd's transformation from being, you know, a Freedom Caucus House member and kind of a bomb thrower to now representing the entire state.

And you know, I'm impressed that he was willing to stand up to the administration and say, don't forget about my constituents.

- Claudia, out in the West, if you're covering out there, are people feeling forgotten?

I know it's slow with the funding and anytime you rebuild the mountains, it will be slow.

- So we do have a journalist that covers the area over there.

And what we've seen, particularly this week, Buncombe County, they asked for 19 million from the state to actually keep the rebuilding efforts.

So they are needing that money, particularly if they want to go back to business, people go to work and the commercial spaces also need that money to rebuild.

- Donald, last word to you.

I mean, asking for federal relief, this state can't pay $60 billion.

I don't care how libertarian you are.

- No, we can't.

And you know, I've been on this show before when we talked about a new DHS secretary come in and we hope that Mark Wayne Mullen would be different than what we've had in the past.

It seems like he's trying, but we'd like to see better than what we're seeing.

I would also say that the Republicans at the General Assembly have set aside billions into economic development reserves and if they want a real economic development in the state, they should send that billions to rebuild Western North Carolina.

- And that's the show.

Thank you folks for being on the show this week.

Thank you more for watching us.

Email your thoughts and opinions to statelines@pbsnc.org.

See you later.

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