Duke Energy Couldn't Show Its Data-Center Math in September. In October, Amazon, Google, Meta, and Microsoft Signed the Document That Does.

On September 18th, North Carolina's Utilities Commission denied Duke Energy Progress a certificate for a $584 million gas turbine, in large part because Duke never showed how much of that plant, or its cost, belonged to the data centers driving the request. Three weeks later, Duke filed paperwork meant to answer exactly that question — and this time the data centers signed it themselves. On October 6th, Duke Energy Carolinas and Duke Energy Progress reached a settlement with North Carolina's Public Staff, the state's official ratepayer advocate, joined by Amazon, Google, Meta, and Microsoft, that lays out in writing how a large data center pays for the grid it needs, before the state has to guess at it again.

What the settlement actually requires

The core structure has three pieces. A new large-load customer pays a nonrefundable, upfront charge for the equipment that serves only that customer — a dedicated substation, say — rather than folding that cost into everyone's rates and hoping the load shows up as promised. Shared upgrades, the transmission work that benefits the wider grid, get upfront deposits and security guarantees instead, so Duke isn't financing them on faith either. And any new large-load customer — defined as 50 megawatts or more running at an 80 percent load factor — moves onto a new High Load Factor rate schedule built specifically for that kind of customer, rather than the ordinary industrial tariff Duke has been using. If the Commission approves it, the rules apply to any electric service agreement signed after June 1st of this year.

The settlement also keeps a minimum-billing charge, the same mechanism our own look at these tariffs flags as the one clause worth reading twice: it decides who pays if a data center's load shows up smaller, or later, than the utility built for. Duke's own testimony back in June had proposed large users pay at least 75 percent of their maximum potential demand, under contract terms running 10 to 15 years — in the range of, though less than, the 80-percent-over-20-years structure Michigan regulators built into DTE's contract with Google this month. Whether the final settlement keeps Duke's June numbers intact isn't yet public in the filing summaries available; that's worth checking against the actual docket once the Commission rules.

This gives us a clear floor so everyone—including potential data center operators—know how much risk they need to take on versus general ratepayers.Will Scott, North Carolina policy director, Environmental Defense Fund

What's still missing, according to the people who wanted more

The Southern Environmental Law Center, which had pushed for a mandatory tariff requiring any customer above 25 MW to pay for at least 85 percent of its projected usage over a 20-year minimum, says this settlement doesn't go far enough. Its objections are specific: the upfront payment for dedicated facilities is too small relative to what those facilities cost, a customer can walk away from a shared upgrade by paying only a fraction of what it triggered, and the settlement still doesn't create a separate data-center customer class that would let regulators track those costs on their own going forward. SELC also points out that the settlement was only made public on October 6th, with no public comment period built in before it goes to the Commission. The Environmental Defense Fund, which helped negotiate the deal, takes a more measured view — calling it a step in the right direction on grid-upgrade costs specifically, while noting it does nothing about the cost of new power plants, which is the exact question that sank Duke's gas turbine three weeks earlier.

I think that gap is the real story here, more than the settlement's existence. A utility that just got told by its own regulator that it couldn't show its data-center math signed a document that shows some of that math — the grid-upgrade side — while leaving the generation side, the actual gas plants being built to serve this load, exactly as unresolved as it was on September 18th. North Carolina's governor and attorney general had spent the summer pushing Duke to put a legally binding number behind its voluntary ratepayer pledges rather than a press release; this settlement is closer to that binding number, but only for half the bill.

What happens next

The Commission is expected to rule on the settlement, as part of Duke's broader rate cases, by mid-November. Until then it's a filed agreement, not a tariff — the same evidence-ladder distance between a signed deal and an enforceable rule that separates every large-load tariff from the utility's underlying press release. If the Commission approves it largely as filed, North Carolina will have gone from a commission publicly unable to accept Duke's data-center cost accounting to a state with one of the more detailed grid-cost tariffs in the country, in about seven weeks. If it doesn't, the same unresolved question — who pays when the data center's number turns out to be wrong — goes back to exactly where it was in September, except now with Amazon's, Google's, Meta's, and Microsoft's names attached to an answer the regulator hasn't accepted yet.