How NC regulators could protect ratepayers from the cost of powering data centers
The North Carolina Utilities Commission is considering proposed "large load tariffs" from Duke Energy and the state's Public Staff. These tariffs aim to ensure that the cost of increased electric grid infrastructure for large energy users, such as data centers, is not borne by general ratepayers. Environmental groups are advocating for even stronger provisions, including requirements for clean energy and load flexibility.
The North Carolina Utilities Commission (NCUC) is currently reviewing Duke Energy's rate request, which includes a significant focus on proposed "large load tariffs" for high energy consumers like data centers. These tariffs, part of a settlement agreement between Duke Energy, stakeholders, and the state's consumer advocate, the Public Staff, aim to protect residential and business ratepayers from the costs associated with building out electric grid infrastructure to support facilities using over 50MW of power.
David Rogers, deputy director of the Sierra Club’s Beyond Coal campaign and a member of the governor’s task force that recommended these tariffs, highlighted public concern over rising electricity bills and the impact of data center development. Both Duke Energy and the Public Staff have submitted proposals that include minimum billing requirements, 10-15 year contract commitments, and termination agreements to ensure companies pay for grid upgrades even if projects are canceled.
Environmental groups like the Environmental Defense Fund, represented by North Carolina Policy Director Will Scott, advocate for more stringent measures. Scott points to a Public Staff proposal requiring data centers to curtail power usage during peak grid capacity but worries that companies might resort to diesel generators, citing an Amazon data center in Richmond County proposing 600 such generators. He argues tariffs should include provisions promoting clean energy, like solar and battery storage, to mitigate local pollution and meet state climate targets. The NCUC is expected to make a decision on these tariffs by the end of the year.