Duke Energy Expands Data Center Cost Protections to Shield North Carolina Ratepayers

Duke Energy on Oct. 7 announced that it had reached an agreement with North Carolina Public Staff and major data center customers to strengthen protections against costs associated with serving data centers and other large electricity users. The agreement covering Duke Energy Carolinas and Duke Energy Progress would require new large load customers to make upfront payments for dedicated grid facilities, provide financial security for broader grid upgrades and take service under a separate rate schedule for customers with sustained electricity demand.

Under the agreement, customers would make non-refundable upfront payments for facilities built exclusively to serve them, such as substations. They would also provide upfront deposits and security guarantees for transmission and other grid upgrades that benefit multiple customers. New large load customers would be required to use the High Load Factor rate schedule, a separate electricity rate established for customers with consistently high demand.

The settlement expands protections Duke Energy introduced in 2024, when the utility began requiring data centers and other customers with demand of at least 100 megawatts to accept contractual provisions intended to prevent existing customers from bearing the cost of new infrastructure. Subject to approval by the North Carolina Utilities Commission, the expanded requirements would apply to customers with demand of at least 50 megawatts and an 80 percent load factor that sign electric service agreements after June 1, 2026. Agreements signed before that date already include similar protections. The North Carolina Utilities Commission must approve the settlement before it takes effect, with a decision expected by mid-November.

The agreement includes Amazon, Google, Meta, Microsoft, the Carolina Industrial Group for Fair Utility Rates and the U.S. Department of Defense. It follows Duke Energy’s July launch of its Customer Protection Plus framework, which the company expects will generate billions of dollars in long term customer benefits as data center demand drives investment in generation and grid infrastructure.

The action follows a broader U.S. trend toward requiring data centers and other large load customers to assume more of the costs and risks associated with their electricity demand.