Relief at the pump gets closer
Gov. Josh Stein signed the state’s gas-tax holiday into law. Officials estimate suspending the 41-cent-per-gallon tax will cost the state $362.3 million. Legislators agreed last week to pull the money from reserves instead of taking it out of the N.C. Department of Transportation’s construction budget.
House Speaker Destin Hall told reporters that experience from gas-tax holidays in other states suggests drivers here will eventually see temporary reductions of 30 to 35 cents a gallon.
“The gas-tax suspension will cost $362.3 million through Nov. 30th, and we are very appreciative and thankful that the NC General Assembly is covering this bill with the state’s ‘stabilization and inflation’ reserve to protect the NC Department of Transportation’s road construction program,” said Dave Simpson, CAGC President & CEO. “We also appreciate the Governor signing this into law.”
Sanford Incentives
Officials in Lee County are considering up to $8.4 million in tax breaks for several mystery companies weighing plans to invest about $300 million in new Sanford factories. The projects — the latest in a string of major economic development deals for the area — could lead to the creation of 670 jobs, county and city officials said in public notices.
The companies, which haven’t been identified by officials, are manufacturers spanning the healthcare, energy and food-service industries, according to the notices. The notices, which described the projects using code names, were issued ahead of public meetings later this month, when incentives could be approved. Incentives are usually only paid out if the company meets hiring and investment targets.
The projects include:
- Project Sunshine. Lee County and Sanford officials are considering incentives packages worth up to about $7 million for a pharmaceutical manufacturer, which is weighing a plan to invest about $230 million over six years in Sanford — a project that would create 200 jobs, officials said in public notices. The Lee County Board of Commissioners is considering an incentives deal that would provide tax rebates worth 60% of the company’s property taxes, provided the company hit hiring and investment targets.
- Project Mustang. Local government leaders are also considering incentives worth up to about $615,000 for a maker of energy-related products. The company is considering an investment of about $34 million over five years in Sanford, where it would buy and upfit a building, officials said in public notices. Commissioners are considering an incentives deal that would provide annual payments worth 50% of the company’s property taxes.
- Project Volt. Local officials are also considering incentives worth up to about $550,000 in tax breaks for an electrical materials company that serves makers of transformers and other power equipment. The company is considering plans to invest about $21.3 million over five years in Sanford, where it would buy land and a building for a new factory.
- Project Maize. Local leaders are considering an incentives package worth up to $235,400 for a manufacturer that is considering whether to invest $21 million over three years in Sanford, officials said in a public notice. The company — which is focused on food-service, retail and industrial customers — plans to create 62 jobs. Commissioners are considering an incentives deal that would provide payments worth 50% of the company’s property taxes.
Officials representing the county and city didn't immediately respond to requests for comment. Economic incentives can be a deciding factor for companies considering expansion or relocation plans. Government leaders generally consider incentives for companies that are also considering other locations.
State law allows officials to withhold the identity of companies at the center of economic incentives deals. Officials often refer to projects only by code names to enable companies to explore opportunities before making a major public commitment.
Referenda Opposition
The Wake County Republican Party is opposing the $829 million in bond referenda for the Wake County school system and Wake Technical Community College that are on the Nov. 3 ballot. Voters will decide on a $680 million bond referendum for the Wake school system and a $149.1 million bond referendum for Wake Tech. If both are approved, it would result in a half-cent increase in the property tax rate that would cost an additional $25 a year for a home assessed at $500,000. “The Wake County Public Schools receives billions of dollars, including 54% of public tax dollars, 60% of state funds and federal monies,” the Wake GOP said in a statement Friday sent to The News & Observer. The Wake GOP’s opposition doesn’t take away the need for the bonds, said Melanie Dubis, co-chair of the Friends of Wake County, the group formed by the business community to promote the Wake school bonds. “The bond is still necessary,” Dubis said in an interview Friday with The N&O. “It’s still critical. It is still the best way to fund these critical needs.” The Wake GOP said it opposes all the bonds on the ballot. In addition to the two countywide bond items, there’s a $101.5 million Raleigh transportation bond, a $101.5 million Raleigh affordable housing bond and a $55 million Knightdale parks and recreation bond on the Nov. 3 ballot. In contrast, the Wake County Democratic Party has endorsed all five county and local bond measures. Wake County voters haven’t rejected a school bond referendum since 1999. But in 2024, voters rejected affordable housing and parks bonds in Cary and a transportation bond in Zebulon.
Ferry Tolls
The N.C. Department of Transportation is preparing to begin charging new tolls on coastal ferries starting next year, as required by the General Assembly, but the state Board of Transportation is asking lawmakers for more time to refine the plans.
The state budget approved this summer directed NCDOT to begin charging tolls on four ferry routes that are now free. They include two river ferries heavily used by commuters and the busiest car ferry, between Ocracoke and Hatteras islands. The bill requires the toll revenue to be used to replace vessels in the ferry system’s aging fleet.
On Thursday, the NCDOT’s Ferry Division released a plan that would generate about $4.4 million in the first year. It calls for a one-way fee of $10 per car on the Hatteras-Ocracoke ferry and $7 on the Knotts Island and the Neuse and Pamlico river ferries. Trucks and other longer vehicles would pay up to $30 on the Hatteras-Ocracoke ferry and $28 on the others. The state would offer a $150 annual ferry pass to permanent residents of 20 North Carolina coastal counties.
At those rates, the ferry system would fall short of the revenue needed to replace a vessel every four years, said Jed Dixon, director of the Ferry Division. Dixon told board members that the state would use the next year to determine how tolls affected ridership and whether they could be increased without discouraging too many travelers.
Board members said the General Assembly hadn’t given NCDOT enough time to study the effects of tolls on ridership. They unanimously approved a resolution from Mike Fox, who represents the Triad area, to ask lawmakers for a few months more to set the rates.
“They literally just took action this week to lower the gas tax and reduce costs for average North Carolinians in terms of transportation,” Fox said. “Yet at the same time we’re rushing to add costs to people who use the ferries. I just don’t see why having a little more time is going to hurt anything.”
As it is, the Board of Transportation is scheduled to vote on the new ferry tolls at its next meeting in early November, in time to get them to the General Assembly by Dec. 1.
Power Users
After weeks of negotiations, Duke Energy and several other groups have agreed on a new large load tariff — a set of standard contract terms that big energy users, including data centers, will have to follow.
As data centers begin using massive amounts of energy from local electric grids, large load tariffs are seen as a way to make sure that big customers pay a fair rate for power. Currently, 36 other states have either approved or are considering a large load tariff.
The large load tariff that Duke and other industry groups have agreed on includes some guardrails meant to prevent large customers from passing any electricity costs on to everyday households. It requires large sums of money upfront and makes it very expensive for large customers to break a contract.
Yet the tariff doesn’t have support from any of the environmental or renewable energy groups that have been involved in discussions with Duke Energy for the past two months. Matt Abele, director of the North Carolina Sustainable Energy Association, said that public interest groups had wanted the tariff to require data center customers to provide their own clean energy, something that state regulators have previously been open to discussing.
“It’s incredibly disappointing, given the fact that we consistently see clean resources continue to be the most cost-effective generation assets for ratepayers, and also the most effective tools to provide speed to market for these large load customers that are looking to interconnect to the grid faster,” Abele said.
The tariff requires large customers to pay in full for any “dedicated facilities” — new electric infrastructure that will only support that project — and sets hefty fines for customers that terminate their contracts early, ranging from $25 million to over $587 million. It also requires them to deposit — through a letter of credit within 60 days of signing their service agreement with Duke — the full cost of other electric grid upgrades that are “necessary to serve the customer load.”
While developers would ultimately get most of that deposit back, they would cede that money to Duke if they ended their contract early. The tariff doesn’t create a new category or set new electric prices for data centers specifically; instead, it applies to customers whose demand is over 50 megawatts of power and consistently operate close to their peak capacity over a 12-month period, as well as all customers whose demand is over 150 megawatts of power.
In the coming weeks, the five members of the Utilities Commission will decide whether to approve this settlement. That will happen as part of Duke’s ongoing case, in which it’s seeking a rate increase for its customers in Charlotte and western North Carolina.