Duke Energy Received Tax Breaks on Its Three N.C. Data Centers

Duke Energy has received tax breaks for three data centers it owns in Charlotte, Garner, and Huntersville, North Carolina, while simultaneously proposing an 18 percent rate hike for its customers. These tax exemptions, enacted in 2010 and expanded in 2015, allow qualifying data centers to avoid sales tax on equipment and electricity, costing state and local governments up to $57 million annually. The utility justified the rate hikes, in part, by citing the need for new natural gas plants to meet the energy demands of data centers, including a planned Microsoft data center near Roxboro. North Carolina Governor Josh Stein and several Democratic state lawmakers are now calling for a reconsideration and repeal of these tax breaks, arguing they are an undue subsidy to profitable companies at the expense of residents. Critics, such as Hope Taylor, executive director of Clean Water for North Carolina, and Blaise Michna, engineering manager at the Public Staff's Energy Division, contend that Duke Energy has exaggerated its load forecasts for data centers to justify its aggressive natural gas buildout plans. Meanwhile, public pressure has led more than a dozen local governments across North Carolina to enact temporary moratoria on new data center construction, reflecting growing concern over their rapid expansion and resource consumption.