The North Carolina Court of Appeals has called out state regulators for letting Duke Energy quietly bump up customer bills in 2024 by tucking older fuel costs into a yearly billing tool. On paper, it is a clear legal win for the state’s Public Staff. In real life, thanks to a later change in state law, most customers will not see a dime in refunds.
What the court decided
A unanimous three-judge panel ruled that the N.C. Utilities Commission overstepped when it signed off on a 2024 fuel rider that reached back beyond the one-year "test period" to scoop up fuel costs from 2022. Writing for the court, Judge John Arrowood said the statute’s plain language "limits true-ups to over or under-recoveries of fuel costs incurred during the test period." The panel reversed the Commission’s orders and sent the case back for further action, but it also refused the Public Staff’s request to force refunds, according to WRAL.
How big the shortfalls were
Duke told regulators it was sitting on nearly $1 billion in fuel costs from 2022 that it had not yet collected, a year when natural gas prices surged. The company also reported additional under-recoveries in 2023 and asked to fold those into the 2024 rider as well. The Utilities Commission ultimately approved a rate that blended the leftover 2022 shortfall with the 2023 under-recoveries, a calculation that the Public Staff challenged on appeal. Those filing numbers and Duke’s requests are detailed in coverage by WSOC-TV.
Why refunds were blocked
The Appeals Court agreed that the Commission got the law wrong, but it stopped short of ordering Duke to pay customers back. While the case was still in play, lawmakers stepped in. In June 2025, the General Assembly passed SL 2025-78 (Senate Bill 266), rewriting the rules on fuel-cost recovery and explicitly allowing multi-year true-ups in later proceedings. The court said that under this new framework, utilities would be able to claw back any refunded money in future experience-modification factors, which means a refund order would not actually give customers lasting relief. That reasoning tracks the statutory changes laid out on the N.C. General Assembly website.
Legal detail and what is at stake
Legal filings highlight that the appeals panel tagged roughly $17 million in fuel-cost recovery as out of bounds under the test-period requirement, a narrower slice within the much larger fight over billions in fuel charges. Law360 attached the appellate opinions to its reporting, while Duke publicly framed the dispute as a question of timing instead of judgment. In a statement to WSOC-TV, a company spokesperson said the case "concerned whether the company could change rates at that specific time rather than whether the rates were prudent for cost recovery."
What customers should watch next
The Court of Appeals has sent the case back to the Utilities Commission, which now has to issue a new order that lines up with the ruling and decide how to handle any remaining fuel-cost recovery in future riders. Customers and consumer advocates will want to keep an eye on upcoming NCUC dockets and new filings from Duke or the Public Staff, since the company could ask for further appellate review or the Commission could spell out how it plans to apply the revised true-up rules going forward. For now, the decision is a reminder that in utility battles, a quick tweak to state law can blunt the impact of a courtroom win almost overnight.
