Duke Energy signs pledge to shield ratepayers from data center costs

Duke Energy announced its participation in the Trump administration’s Ratepayer Protection Pledge on July 23, committing to shield households and small businesses from the costs of power plants and grid infrastructure needed to serve rapidly expanding data centers. The pledge encourages large energy users to provide their own power and pay the full cost of new transmission and distribution infrastructure. Harry Sideris, president and CEO of Duke Energy, emphasized the company’s focus on ensuring data centers contribute savings for existing customers through its Customer Protection Plus framework, which includes engineering studies and long-term agreements.

North Carolina Governor Josh Stein and Attorney General Jeff Jackson praised Duke’s federal commitment but called for its translation into legally enforceable protections at the state level. Jackson stated, “a promise in Washington doesn’t lower a power bill in North Carolina,” urging Duke to make the same promise to the NC Utilities Commission in writing. Stein specifically requested the creation of a legally binding “large load tariff” for data centers and other exceptionally large electricity users, which would establish a separate customer class with minimum payment requirements to prevent cost-shifting if facilities are delayed or use less power than projected.

This development follows legislative efforts in North Carolina to address data center energy costs. Lawmakers considered Senate Bill 730, the Ratepayer Protection Act, and House Bill 1213, the Protect Taxpayers and Consumers Act. While some proposed incentives were not fully repealed, the final state budget did eliminate the sales and use tax exemption for electricity consumed by data centers, a concrete step towards shifting costs. Public polling indicates strong support among North Carolina voters for requiring new data centers to provide their own energy generation. Jon Sanders of the John Locke Foundation suggested a less regulatory approach, allowing large users to secure off-grid power.

With Duke publicly backing the principle that data centers should bear their own costs, the next critical step involves the North Carolina Utilities Commission determining if Duke’s existing contracts are sufficient or if a new, enforceable rate structure is required. The Utilities Commission’s Public Staff and other parties have agreed to a fast-track process to consider large-load tariffs, with Attorney General Jackson’s office intending to participate and push for a distinct rate class for data centers.