Duke Energy Requests 15% Rate Increase as Data Center Growth Sparks Cost Debate

Duke Energy wants a 15% rate hike in North Carolina over two years. State officials now argue about who pays for new infrastructure that data centers need. Electric bills have climbed 22% since 2020, a state task force found.

Data centers store computer servers for cloud storage and AI. They make up 30% of new projects coming to North Carolina. Right now, they use little power. But they'll consume 80% of future energy demand statewide.

Will Scott works as the North Carolina policy director for the Environmental Defense Fund. He worries that energy-hungry facilities will force utilities to build costly new plants. "You're gonna have to build new power plants to support those data centers, and the cost of those power plants under our current system would be socialized across everyone who uses electricity in the system," said Scott, according to WSOC-TV.

Scott thinks lawmakers should force big customers to pay special fees or steeper rates to cover what they use. "We have to decide what we think is a good deal for our states," he said.

Bill Norton speaks for Duke Energy. He says data centers aren't driving up utility rates. Data centers use less than 1% of the system's capacity right now.

"For them to shoulder the blame really is misleading," Norton said. "When you look at transformers, poles, power lines, material costs have really increased dramatically over the past few years."

Norton blames most rate jumps on pricier infrastructure maintenance and equipment. The company's proposed hike targets improvements to the existing grid, not service for big industrial users.

He argues that when factories and warehouses move to the Carolinas, they help residents pay less by spreading costs across more customers. "When you have a large amount of growth coming in that can spread costs over a larger customer base," Norton said.

Tejon Robinson lives in Charlotte by himself. His monthly bills have grown in recent years. "That's a noticeable jump," Robinson said. "I would say it jumped about like $30, and I live alone."

State officials and advocates still debate how big energy users should get billed for grid expansion ahead.