- New polls show North Carolina voters shifting toward Democrats.

But what does it mean for November?

And Duke Energy wants to raise your electric bill.

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(upbeat music) - Welcome to State Lines.

I'm David Hurst.

Kelly McCullen is off this week, but he left me in great hands with a good group of panelists.

We've got Scott Falmlen of Nexus Strategies.

Next to him is Pat Ryan of Ryan Public Relations.

We've also got Brooke Medina of the State Policy Network.

And finally, Travis Fain of Fain Communications.

Welcome to you all.

Thanks for being here.

- Thank you.

- Let's jump right in.

We'll start with a landmark decision from the state Supreme Court.

They recently ruled this week on public school funding.

In 1994, families in some of North Carolina's poorest counties sued the state.

They argued their kids weren't getting the education the state constitution promised them.

That case became known as Leandro.

A plan was eventually drawn up that would have sent billions to struggling schools.

But this week, the Supreme Court threw that plan out.

In a 4-3 ruling, the court said that it's the legislature's job, not the court's, to decide how to fund public education.

Republicans called it a win for the constitution, but Governor Josh Stein said the court "slammed the door in the face of students."

Pat, let's start with you.

I mean, this has been going on for quite some time.

We finally got an outcome.

What are the implications here?

- Yeah, sure.

Look, this case has been, at least in my opinion, others will disagree, an exercise in legal torture for the last 30 years.

I mean, this started as a handful, as you mentioned, a handful of low-wealth school districts suggesting or arguing that they didn't get as much money per pupil as the higher-wealth school districts, which was true.

Now, in fact, low-wealth school districts get more per-pupil funding from the state than high-wealth.

And North Carolina is one of the few states where that is the case.

But nevertheless, over the years, the case contorted into this attempt really to have a panel of judges order money withdrawn from the state treasury and spent on a litany of pet projects outlined and created by a consultancy based in California.

And so, in my opinion, the Supreme Court rightly said, "No, that's not how appropriations works in North Carolina.

The legislature makes laws to decide how to spend money, and only the legislature."

- Scott, we're already seeing both parties claim the high ground here in education.

Which one's going to resonate most with both?

- It's unfortunate-the decision is unfortunate, in that I don't think there's any question that our public schools are underfunded.

And this was a mechanism, as Pat said, that's been going on for 30 years to try to correct that issue.

And I think it will be an issue, made more so by the fact that the one job the legislature has is to pass a budget, and they haven't passed a budget since 2024.

So, we're not only-we're not just treading water; we're actually kind of slipping down into the water a little bit on all services of state government.

- Brooke, what is that commitment from the Republican-led legislature?

What does that look like now that it's now in their hands?

- Yeah, well, I think that this at least gets back to actually talking about what really matters when it comes to education.

And a lot of that, when it comes to state dollars, is accountability.

And so, this restores that constitutional balance, because, to Pat's point, this has been an exercise, and yet legal torture kind of-and it's created all of these other subsequent lawsuits that have really- they've really shaped the education debates in North Carolina over these past several decades.

And really, the legislature needs to get back to the job of governing and appropriating funds correctly.

And that really gets back to whether or not we're providing the funds for the students and actually making it into the classroom.

We might say that education is underfunded, but really, how are the current education funds being spent, and are they being spent well?

And is there appropriate accountability there?

- Well, let me just say, on the accountability front, I agree wholeheartedly that the use of public funds needs to be held accountable.

But it needs to be held accountable for public schools, for the private schools, which are now getting hundreds of millions of dollars in vouchers, and charter schools.

So, the accountability needs to be across the board, not just in the traditional public schools.

- And voters have to hold the legislature accountable for whether or not the right amount is being put toward public schools.

And we're very gerrymandered in this state.

It makes it more difficult for a voter who disagrees with what their individual lawmaker may be doing or what the General Assembly under Democratic or Republican control-currently, obviously, Republican control-they have less power to have a say in that process because of gerrymandering.

- So, I think we can all probably agree here that this is a good debate.

Are we spending enough money?

Are we not spending enough money?

Do teachers deserve more?

Like, all these things are very healthy debates to be had, and people have really strong, sincerely held beliefs on those things.

The right place to decide those is in the Senate and the House at the legislative building, not among a panel of judges who have no larger context about the state's budget needs.

There's capital expenditures.

There's debt service.

Should we-like, all these things are political questions that flow into the legislature to decide how to allocate priorities.

If we're not spending enough on education, or people think that we're not, then they can vote for a different legislator, or they can call their legis- but it's not for a panel of judges to decide how the state treasury is dispersed.

- I think, to Travis's point, though, if the legislative districts weren't as gerrymandered as they are, people's voices could be heard, and I'm guessing they would be heard on the side of public education being funded.

- I feel like everything just sort of falls back to gerrymandering, if there's not really a good argument.

But OK.

- I mean, there's a reason it's that important, right?

I mean, that's-you know, who is deciding who holds the level- Sure.

-levers of power?

I will say, though, I agree with you, this is a General Assembly decision, as opposed to something for the courts.

Even though the state constitution does have some guarantees in it, I don't see in the language something that puts a number forward, right?

I just don't see that there.

I want to talk less about process, though.

Like, we need fewer decades-long lawsuits and disputes.

We have got to work together across partisan lines in this state better.

We have got to do more together.

We have got to move forward together.

And I want to quote Justice Richard Dietz, a Republican who sided with the Democrats on the Supreme Court on this case.

He said, "I see a path forward in this case that cures the state's shameful failure to meet its constitutional obligations.

I don't care about the process.

I care about the shameful failure, and that's what has to be addressed.

I don't care how."

- Well, Travis, surely you're opposed to dictatorships, right?

- I certainly am.

- So, process is fairly important in how a government is run in a system of separation of powers.

If all you care about is ends and not means, then I think there's a real problem in how governing works.

- I care about not having the same fight over and over for a generation.

An entire group of students has been born, gone to school.

Some may be dead over the last 30-whatever years while we were arguing over this.

Let's not do that.

- Well, short session on Monday.

We'll see if state lawmakers pick anything up then.

We'll certainly be focused on that.

But also, education this week.

State officials are proposing a major overhaul of high school math standards.

The State Department of Public Instruction wants to eliminate the required Math 3 course and give students more choice in their final two math credits.

That would include courses like data science and statistic modeling.

The goal is to make math more relevant to students' career paths.

But Republican lawmakers on the Education Oversight Committee, they say they're questioning whether students are already too far behind to take on more flexibility.

Brooke, the proposal here sounds good on paper.

More flexibility, more career options.

What's the conservative hesitation?

- Yeah, well, I think there are-we can look at this two ways.

One way is you want to ensure that if we're going to be modifying these standards, that we're still maintaining accountability, if we're going to go back to that word.

And that this isn't just an attempt to mask poor performance, as we know that education-these NAEP scores is what they're called, so this is the National Education Scores-that we're not just trying to mask some poor scores there.

But I would say the way in which students in the 21st century engage with math is different.

It doesn't mean that math is any less valid or relevant or important, but the way they access it, the way they compute, is so wildly different than when we were setting up standards previously.

So I think it's a good, healthy discussion to have as to what is actually relevant and what is going to prepare North Carolina students for not only a national workforce but a global competition that's happening between us and many countries that sometimes are our adversaries.

- Well, Travis, I'm curious.

I mean, these sound like pretty in-demand skills that many business leaders would want, but at what cost?

Is that-are we sacrificing some of the fundamentals here?

- Maybe.

I mean, I'm inclined to go with what the experts say here.

And to the extent we have a math problem among our student population, I don't think it's because of what's being taught in junior and senior years of high school.

You know, if you're still struggling with math at that point in your educational career, that's a high bar to clear at that point for society to move you forward there.

We can try, but I just feel like this probably makes sense, and I'm inclined, like I said, to go with the experts.

I'll quote Charles Aiken, who is the Department of Public Instruction's section chief on math and STEM.

I thought this was a good line.

"We need to think of mathematics less as a study in isolation but more as content that's really focused on workforce needs and development."

Obviously, there's more to education than workforce needs and development, but with math specifically, I think that makes a lot of sense as a philosophy.

- You brought all the good quotes today.

I like it.

- And you have AI interspersed with all of this, which is just a game changer, really.

- Yeah, I was going to bring it up.

I mean, this may be changing the subject a little bit, but, you know, the advances in artificial intelligence, I think, are going to have just deep and right now unknowable consequences for especially K-12 education.

Like, in three seconds, you can go ask a complicated calculus question to a large language model and get an answer.

And so what is that-like, what do students really need to be learning?

What are the fundamentals that they need to understand when that sort of power is available to them right now and only going to increase over time?

I have no idea, but I do know it's almost certain to be a good prompt to rethink really the entire basis of education right now.

- Well, that gets at the core of education, which is where a lot of these debates sometimes gloss over when we get to the process and we talk about the policies.

But really, it's what is education for and what does that actually-what does success look like?

And how are we equipping these children to be able to thrive and to feel empowered to actually do well?

We cannot-you know, we cannot overestimate, I don't think, the impact of AI and just this-what someone called the fourth industrial revolution on the next generation's job prospects.

- Yeah.

It's evolving fast.

Well, we've been talking about math.

Let's look at some different numbers now, some poll numbers.

Three new polls show more North Carolinians are favoring Democrats in both the state legislature and the U.S.

Senate race.

These polls were by Elon University, Catawba College and Healthier United, a bipartisan nonprofit.

The polls found between 41 and 48 percent of North Carolina voters preferring Democrats in the General Assembly.

That's compared to 36 to 37 percent preferring Republicans.

Now, for context, polls back in 2022 showed Republicans and Democrats basically even.

On the Senate race, Roy Cooper leads in favorability, 48 percent to Michael Whatley's 24 percent.

But Whatley kind of remains a mystery to a lot of voters.

64 percent say they know little or nothing about him.

Scott, let's start with you.

Your business partner, Morgan Jackson, he had a role in the Healthier United poll there.

What's our takeaway here?

Are three polls showing kind of the same thing?

Is that an indication of what November might look like?

- Well, it's early, and there's a lot of campaigning to do between now and November.

But these trends are certainly heading in the right direction for Democrats.

And when you look at that, coupled with the fact that in special elections all across the country over the last year, Democrats have either won where they were not supposed to, or they've vastly outperformed their numbers from 2024 when President Trump was elected.

This year, I think what you're seeing is-and this is true in most elections-anger is a very motivating factor in both directions.

Democrats and independents are primarily angry at President Trump and his policies.

They're angry at gas prices.

They're angry at their utility bills.

They're angry at their access and cost of health care.

And anger is a good motivator and a good energizer for voter turnout.

On the flip side of that, there are many Republicans who are angry because they don't think President Trump has- or the Republican legislature that these polls are based on have lived up to what their promises were in the last election.

And so, anger in that sense is a- is a-dejecting people from potentially turning out and voting.

It's-like I say, it's a little too early to tell, but, as I say, I think the trends are headed in the right direction for Democrats, and we'll see.

- Oh, every few years, Scott's in the happy seat and I'm in the sad seat, and then every few years it reverses.

Yeah, the tide comes in, the tide goes out on politics.

It goes in cycles.

Right.

Right now, Republicans are on the wrong side of this ebb and flow, not surprising, since there's a Republican in the White House, and this is a midterm election year.

As he-there's no other way to put it.

It's not-it's not-these are not good numbers for-if you're a Republican right now.

- Yeah.

Brooke, make-cheer me up.

- I will.

I will try to cheer you up.

So, the trends, yes, to your point, Pat, they're not good, in part because it is an election-a midterm election year.

So, historically, the man in the White House, or maybe one day a woman in the White House, are not going to-the midterm year, their party won't perform as well.

However, during the 2022 Biden midterm, that was a little bit different, and that didn't shake out the same.

So I know I'm talking about national here, but North Carolina maps pretty well, it seems like, in this case.

And so, that one was interesting.

That was an anomaly.

And so, that gets at, I think, the international unrest, Iran and all of that.

And so, that actually could, as things heat up, or if they heat up closer to the election time, that could prompt voters to want more stability when it comes to party.

And so, that could actually help the Republicans.

We'll see.

- I think that sounds like a little bit of wishful thinking.

I did some work with Healthier United, first of all, which is-did one of these polls, so I'll just mention that.

The Whatley-Cooper race is interesting because it's kind of a race to define Michael Whatley, who is relatively unknown among voters.

And interestingly enough, I think that Roy Cooper and Michael Whatley will both try to define Michael Whatley in the same way, which is as a yes-man for President Donald Trump.

I mean, someone here can correct me, but I have not heard Michael Whatley say he disagrees with President Trump on a single issue.

If there is one issue where he has pushed back at all, someone highlight it for me.

He has promised to be a yes vote for Trump in the Senate.

And that's the animating issue of that race, right?

Do you want someone who supports Donald Trump to be North Carolina's second senator, or do you want a Democrat?

It's as simple as that.

And people know Roy Cooper.

Like, trying to define Roy Cooper as a woke mob liberal is not going to work, and that seems to be what Whatley's people are trying.

- Brooke, what do you think?

Is that-you know, two-thirds of these folks polled, they didn't really know Michael Whatley.

Is that something that can be used as an advantage, or is it more of a challenge for Republicans?

- Yeah, I think Travis's comment here is helpful, and I think it's instructive, whereas former Governor Cooper has such high name recognition and, you know, compliments to your partner Morgan.

He has been able to fly under the radar and doesn't get characterized as a more far-left-leaning progressive, although I would say that many of the policies for voters that he supported while he was in the governor's office were fairly far-left.

- And, Pat, on the state side, is this cause for, you know, alarm in the Republican circles that, you know, maybe the majority might be shifting a little bit, or do you think the math and the maps kind of still hold?

- I think there's-I don't think you should ever take for granted that one party is going to retain a majority, right, and especially in a challenging political environment like Republicans face right now.

You know, I think most observers would tell you that it's probably a stretch for Democrats to win control of either of the two chambers.

Maybe Scott can add some color to that.

But it's always-look, it's always a possibility.

I mean, Democrats controlled one or both chambers of the General Assembly for 100 years in this state.

And they lost in a massive 2010 wave election.

It could-these things happen, right?

- Well, I would just say, to your point exactly, I mean, 2010 was an anger election, if you will, because of Obamacare.

And those were districts that Democrats had drawn.

So, you know, you never say never.

I think certainly there will be gains by Democrats in the legislature this year, whether it's quite enough this year or going into 2028 to take back one of the chambers.

We'll see.

But it's possible.

We'll see.

- A lot more time until November.

We'll watch.

Well, while many are looking ahead to November, some North Carolinians are focused on something more immediate, their electric bill.

Duke Energy is asking state regulators for an 18 percent rate increase over the next two years.

For the average North Carolina customer, that could mean about $28 more per month by 2027 and $34 per month by 2028.

Duke says the increase is needed to cover grid upgrades and build infrastructure to support things like data centers and the state's growing population.

But critics point out that the company reported record profits last year, up nearly 10 percent.

More than 71,000 people have signed a petition calling for an independent audit of Duke's billing practices.

Pat, a lot of people not excited about this, obviously.

Do petitions and protests, do those move the needle at all with this?

- I think it's important to really put in context this whole conversation.

And we could go in a bunch of different directions.

This is such a complex topic, power generation, electricity distribution.

But so North Carolina's residential power rates right now are 22 percent cheaper than the U.S.

average, and they're the lowest in our region, according to the Energy Information Administration.

So we just need to talk about this increase in that context.

The biggest driver of power bills, at least in North Carolina, isn't power generation.

It's infrastructure.

It's distributing that power.

So every major economic development project in the state in the last five years needs energy, and it needs energy 365, 24/7.

Right?

So we're a growing state.

That's all good.

But that requires new power facilities, new transmission lines, more utility poles.

Right?

All these things are expensive and have gotten a lot more expensive over the last 20 years.

That's the context that's happening in North Carolina right now.

And we talk about different strains, but I'll just sort of pause there and let other people take the microphone.

- Well, I think timing is everything, and I think Duke's timing leaves a little bit to be desired.

When people already feel like they're paying too much and now they're asking for more.

On the way here, I saw a gas sign that said $4.09 a gallon.

People are just inundated, and they don't understand or they do understand the power needs of all these data centers that are being proposed and the energy stuff that those things take.

And they want to make sure that those folks are paying their fair share.

And they just-they're feeling inundated on all fronts.

And so I just think there may be legitimate reasons why Duke needs more money, but I think they need to do, A, a better PR job in explaining why, as you kind of just did, Pat, but assure their consumers that they are getting the biggest bang for their buck that they're already paying.

- I got another quote for you, and it's from Duke Energy CEO Harry Sedaris, who was speaking in February about the company's 2025 earnings.

And here's a quote.

"We met every financial goal.

We entered 2026 with incredible momentum.

The fundamentals of our business have never been stronger, and we operate in some of the most attractive jurisdictions in the nation."

That does not sound like a company that needs an 18 percent rate increase.

And I would suggest to state lawmakers and other regulators in this state that they ask themselves, "Am I one of the reasons that Duke Energy feels like it operates in one of the most attractive jurisdictions in the country?"

- Well, they certainly are, because more people are moving here.

But it's an attractive jurisdiction because companies and businesses have been moving here in droves for the past decade.

- This is a regulated monopoly.

Are we doing too much monopoly and not enough regulating?

That's the question that people need to ask themselves.

- I think that's a great question to ask.

And I would say that we predicted that these prices were going to go up years ago.

And the reason why has to do with the government and government regulation, which was that North Carolina, through House Bill 951, a number of years ago, mandated 2015 net-zero carbon reduction plan, which Duke Energy has been working to satisfy.

And so, when we're thinking about unaffordable, unreliable energy and then pairing it with this net-zero carbon reduction plan, we're going to have to grapple with the fact that these solar and wind renewable energies are driving up cost for ratepayers.

- I need to push back against that.

I do a little work with the Sierra Club, so that seems relevant to what I'm about to say here.

But I would encourage everybody to go online and look up relative costs for solar and wind versus natural gas.

There's a Wood Mackenzie report out today that said they expect natural gas turbine costs to increase close to 200 percent per megawatt hour over the next five years.

There is a backorder right now for natural gas turbines, because there's too much demand.

We need the energy for AI.

And too many entities, including Duke Energy, are really making a big natural gas push.

Natural gas is not cheap, like people argue it is.

I don't think anyone is saying, "Let's stick with coal.

That's great."

Nuclear is a good option, but over what timeline?

The last time we built a nuclear plant in this country was down in Georgia.

And when did that finish?

I think 10 years ago, something like that.

It's been a while, and before that, it was decades.

So there are limited answers to this question, and we're making the question harder by pumping so much electricity toward AI.

- Well, so I'll read to you a headline, Travis, now that you've been doing the quotes.

The Washington Post, I think that we-you accept that there are-you probably read The Washington Post.

Let's see.

The headline is, "There is a reason electricity prices have been rising, and it's not AI."

They quote a Lawrence Berkeley National Labs kind of groundbreaking study that was released late last year that points to basically what I said earlier in this segment, which is, it's infrastructure and distribution-that is, costs and upgrading the grid and accounting for growth everywhere in the Southeast- that is driving these electricity prices.

And there's sort of a nuanced and kind of complicated interplay between power demand and power costs, which is to say, in this report, states that experience higher demand for power saw their power bills decrease, whereas states that experience less demand for power saw their power bills increase.

And the reason for that-and this is getting a little complicated, I apologize-but the reason for that is there are more customers to fund those infrastructure upgrades.

The more people who are paying power bills, the more people are helping pay off those capital expenditures that have gone into upgrading the grid.

So, in fact, yes, Duke Energy's plans to increase distribution infrastructure in North Carolina is expensive right now, but over the long term, at least according to Lawrence Berkeley National Labs and The Washington Post, they're likely to stabilize electricity prices in the long term.

- There is not a reason they're going up.

There are many reasons it's going up.

AI is one of them.

A data center, a large data center, takes as much juice as a small city.

- What about short term, though?

I mean, people are already struggling with rising costs.

I mean, that's significant money, $20, $30 extra a month.

What's your message to ratepayers?

- Yeah, look, I'm not a spokesman for Duke Energy, and so I have my own opinions on this stuff, but I think in general, you look at North Carolina's relative electricity cost to the rest of the country, and it's 22 percent lower.

An increase in electricity bills, especially for people on a fixed income, like that- I'm not discounting that.

That matters, right?

But this state's power generation has been, I think, pretty well managed over the past 20, 30, 40, 50 years.

And you just look at those affordability figures and see how and why that is.

And, you know, we can talk about corporate greed.

Travis can quote, you know, Duke Energy CEOs.

But, you know, the fact is we have among the lowest power rates in the country right now.

Is that because of corporate generosity?

No, of course not.

Duke is a regulated monopoly, right?

Its returns are capped by the Utilities Commission.

None of this has anything to do with generosity or with greed.

It has everything to do with how well the company is running itself and if it's making the right investments in the power grid.

- I would just say that as long as I can remember when some of these expenses for infrastructure have been paid off and, as you said, things have stabilized, I've never seen the rates stabilize or I've never seen the rates decrease.

It seems like Duke's always asking for more and more and more, even when maybe their infrastructure costs and whatnot have been paid off and they don't have that debt anymore.

- Well, next hearing is August, so we'll keep an eye on everything that goes on there.

Thanks to our panelists for joining us and thanks for watching.

I'm David Hurst.

We'll see you next time.

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