North Carolina's Biggest Tech Companies Just Agreed to Pay Their Own Way. The Governor Says That's Not Enough.

On October 6th, Duke Energy filed something with North Carolina regulators that the company spent most of this year insisting it didn't need: a signed agreement with the five largest technology operators building data centers in its territory over who pays when their power needs don't match what they promised. The signatories read like a rollcall of the AI buildout itself. Amazon, Google, Meta, and Microsoft all signed on. So did the U.S. Department of Defense, whose own data and cloud infrastructure in the state will now answer to the same rules as the hyperscalers. North Carolina's Public Staff, the state's ratepayer advocate, signed too, alongside the Carolina Industrial Group for Fair Utility Rates. Duke Energy Carolinas and Duke Energy Progress put their names on it last.

Large-load tariffs are the mechanism utilities use to decide what a very big customer has to commit to before the utility builds for it, and this blog has walked through how the mechanics usually work: a threshold for who counts, a minimum bill that applies whether the customer's load shows up as promised or not, and some form of security against the customer walking away once the utility has already built the substation. North Carolina had none of that specific to data centers until this month. Duke spent the first half of 2026 arguing it wasn't necessary, then proposed a tariff in June after legislators, consumer advocates, and the Southern Alliance for Clean Energy kept pushing the question in its broader rate case. The October settlement is the version that came out the other end of four months of negotiation.

The terms are specific enough to mean something. The tariff applies to any customer with contract demand of 50 megawatts or more that expects to run near peak capacity most of the time, or to any customer above 150 megawatts regardless of how steadily it runs, for agreements signed after June 1, 2026. Those customers have to pay a minimum bill equal to 75 percent of their contracted demand, whether or not they ever use that much power. They have to cover the cost of equipment built specifically for them, and back the grid upgrades a utility makes on their behalf with a letter of credit, not a handshake. And if a data center signs up, then walks away before the contract term is up, the early-exit penalties run from $25 million at the low end to more than $587 million at the high end, depending on how much capacity it reserved and how far into the agreement it bails.

What makes this settlement different from most of what this blog tracks is who's on the signature page. A lot of the fights covered here involve a utility or a developer on one side and residents, lawmakers, or advocacy groups on the other, fought out in a council chamber or a courtroom. This one has Amazon, Google, Meta, and Microsoft agreeing, in writing, to terms that put real financial risk back on them instead of leaving it for Duke's residential and commercial customers to absorb if a planned data center never fully materializes. That's not nothing. It's the kind of agreement regulators in other states have spent years trying to extract from hyperscalers who'd rather negotiate quietly than commit to numbers a commission can enforce.

A Duke spokesperson framed the months leading up to the filing as "constructive discussions" toward exactly this kind of tariff, and said the company's own analysis shows large-load customers will cover the increased cost of serving them under the plan as negotiated. That's the company's characterization of its own settlement, worth noting as such, but it lines up with the direction every other large utility with a meaningful data-center queue has been pushed in this year, from AEP Ohio's tariff to Indiana Michigan Power's. North Carolina was one of the larger data-center markets without one until this month.

What the settlement doesn't do

It's also not the deal North Carolina's governor wanted. Gov. Josh Stein's office said after the filing that the Utilities Commission needs to impose a large-load tariff outright, not simply bless whatever the parties agreed to privately, and that data centers have to cover the full cost of the demand they add to the grid before the bill lands on ordinary households. Attorney General Jeff Jackson, who intervened in the case directly, made a related point: a federal pledge about responsible AI growth doesn't do anything by itself to lower what a North Carolina family pays Duke Energy every month. Neither official is a party to the settlement, which means neither has to be satisfied for the Commission to approve it, but both are on record saying it falls short.

The Southern Environmental Law Center was blunter still. Its press release the same week ran under the headline "Duke Energy Proposal Fails to Hold Data Centers Accountable in Large Load Tariff Settlement." SELC and its co-filers argue the deal keeps a minimum-bill structure worth having, but drops the pieces that would have made it durable: no separate large-load customer class to track what these accounts actually cost to serve over time, no Clean Transition Tariff that would have given data centers a path to fund new renewable generation directly, and no commitment from Duke on the profit rate it earns building infrastructure these customers require. Several of the specific cost-allocation questions, including exactly how upgrade costs get split between a data center and everyone else on Duke's system, are left to be hashed out in the company's next general rate case rather than settled here. No clean-energy group signed the agreement at all.

The clock North Carolina's regulators are on

None of that is final yet, which is worth sitting with for a minute. A settlement isn't an order. It's a proposal that the five members of the North Carolina Utilities Commission still have to approve, modify, or reject, and nothing in the filing requires them to take the parties' word for any of it. Duke has said it expects an answer by mid-November, but that's the company's own expectation, not a date the Commission has actually scheduled. Until a commissioner signs an order, every number in the settlement, the 50-megawatt threshold, the 75 percent minimum bill, the nine-figure exit penalties, is a number the parties merely agreed to ask for.

I think the useful way to read this settlement is as a floor, not a ceiling. Amazon, Google, Meta, and Microsoft got a seat at the table and helped write the rules that will govern their own future contracts in the state, which is exactly why Stein and Jackson are right to want the Commission to go further rather than rubber-stamp what the parties handed it. A minimum bill and a letter-of-credit requirement are real protections against the specific failure mode utilities have learned to fear most, a data center that signs up for hundreds of megawatts, gets a substation built in its name, and then scales back or disappears once the market shifts. They don't answer the separate question SELC is pressing: who actually pays, years from now, for the transmission and generation this buildout requires, after the five companies that negotiated this settlement have moved on to whatever comes after the current AI cycle.

That's the part worth watching in November, more than whether the Commission approves the deal as written. North Carolina has gone from no data-center-specific tariff at all to a negotiated one with real numbers attached in the space of a few months, which counts as progress by any standard this blog has seen out of other states this year. Whether it counts as enough is a question for five commissioners, not the five companies who got to help draft the answer first.