Duke Energy Proposes New Cost Rules for Data Centers and Other Huge Power Users

RALEIGH, N.C. — Duke Energy and major technology companies have reached a proposed settlement over how some of North Carolina's largest electricity users should pay for connecting to the power grid. The agreement, submitted to the North Carolina Utilities Commission, is intended to limit the risk that ordinary customers end up covering infrastructure costs associated with enormous new projects such as data centers.

The proposal addresses what utilities call a large-load tariff. It would apply to customers with electricity demand above 50 megawatts that operate consistently near peak capacity, or customers with total demand exceeding 150 megawatts. These thresholds are high enough to capture major data centers while excluding many ordinary industrial facilities whose electricity consumption varies substantially throughout the day.

Under the settlement, qualifying customers would provide upfront deposits for electrical infrastructure constructed specifically for their projects. They would also face minimum monthly payments of at least 75 percent of projected demand, even when their actual consumption is lower. Customers who cancel agreements or sharply reduce contracted demand could be required to pay damages.

Those provisions matter because utilities may need to build expensive substations, transmission connections and other facilities before a data center begins operating. If a large customer abandons a project or uses less electricity than anticipated, the resulting costs can become a concern for the broader customer base. The settlement attempts to allocate more of that financial risk to the projects creating the demand.

The North Carolina Public Staff, an independent agency representing utility consumers, participated in the settlement. According to reporting by Axios Raleigh, the proposal is supported by Amazon, Microsoft, Google and Meta. Duke Energy's North Carolina leadership says the approach would require data centers to pay for their connections rather than shifting those costs to other customers.

Not everyone believes the proposed protections go far enough. Clean-energy advocates have criticized the absence of a requirement for large projects to obtain cleaner electricity or supply more of their own power. Gov. Josh Stein's office said it was reviewing the proposal and emphasized the importance of protecting ratepayers as utility bills rise.

The implications extend to the Piedmont Triad, where industrial development, data-center investment and electricity affordability are important economic questions. Businesses considering major power-intensive projects need predictable connection rules, while households and smaller employers have an interest in ensuring that new growth does not leave them with disproportionate costs.

The agreement is not yet final. The five-member North Carolina Utilities Commission must review and approve the proposed tariff, and a decision could come in the following month. Until then, the settlement represents a proposed framework rather than an enacted requirement.