Policy proposal seeks to ensure AI data center operators pay their fair share of local electricity infrastructure expansion and grid upgrade costs.

RALEIGH, N.C. — North Carolina Attorney General Jeff Jackson is urging the Utilities Commission to establish a new rate class specifically for Duke Energy’s data center customers to ensure they pay their fair share of energy costs. The proposal was filed within Duke’s ongoing rate cases as part of a separate proceeding initiated after Jackson requested a dedicated review to address the unprecedented strain that new data centers and other large-load consumers are placing on the state’s energy grid.

Jackson argues that creating a targeted rate class for data centers and other major energy users is a critical first step to protect ratepayers, stabilize energy rates, and safeguard infrastructure. He states that such a classification would ensure three key outcomes: data centers operate under a consistent set of rules, Duke Energy customers have clear visibility into those rules, and the costs and risks associated with data centers are not shifted onto residential customers.

“Duke Energy is onboarding an unprecedented number of data centers without a clear plan on how to protect ratepayers from higher rates and unacceptable risk,” Jackson said. “These data centers are upending our energy system, and we need to know that the Utilities Commission is making sure data centers pay for the strain they put on the grid and don’t unfairly burden ratepayers. We’re going to keep fighting to protect ratepayers.”

This proposal builds upon a proposed order issued last month in the ongoing Duke Energy Carbon Plan case. The Utilities Commission’s ruling in that matter will determine what new power generation and transmission assets Duke can build to meet projected demand in the coming years. Duke has projected that 80 percent of the new energy demand it must accommodate stems from data centers and other large energy users. To meet this demand, the utility has proposed constructing new generation and transmission infrastructure—a strategy that could drive up rates for other customers and carry significant financial risk if the projected demand fails to materialize.

In his proposed order for the Carbon Plan case, Jackson urged the commission to require Duke Energy to take several steps to ensure its growth projections remain reasonable and that it builds—and charges ratepayers for—only necessary infrastructure. His recommendations include requiring Duke to publicly disclose the template contracts it uses with data centers and other large energy users, so North Carolinians can understand the terms and safeguards protecting households. Additionally, he recommended mandating regular reporting on any agreements that deviate from these templates. Currently, Duke submits energy load forecasts every six months; Jackson proposed increasing this frequency to every 90 days to ensure infrastructure development aligns with actual demand rather than overestimates. He also called for pausing the development of new natural gas plants to allow time for a thorough evaluation of Duke’s most recent load forecast updates.

Copies of Attorney General Jackson’s data center rate class proposal and the full proposed order are available online.

This marks the third case in which Jackson is actively working to shield North Carolinians from increased utility bills. He previously declined to endorse a proposed settlement in the Duke Energy Carolinas rate case, noting that residential rates would still increase by an average of approximately 9.5 percent. He also refused to sign off on Duke Energy Progress’s proposed 15 percent rate increase, which would impose nearly $960 million in unnecessary rate hikes on DEP customers over the next two years. Furthermore, Jackson is challenging Duke Energy to formally commit—not merely verbally—to the federal government’s Ratepayer Protection Pledge. That pledge requires utilities to ensure data centers and other large energy users “build, bring, or buy the new generation resources and electricity needed to satisfy their energy demands, and pay for all new power delivery infrastructure upgrades to service their data centers.”

[News release courtesy of North Carolina Department of Justice]