Democrats try to pressure Duke Energy to put data center pledge into writing
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Duke Energy, North Carolina's dominant utility, has signed onto a White House-backed pledge to shield households from absorbing any costs related to the data center building boom.
- Now, North Carolina's top Democrats want to see that pledge written in legally enforceable writing.
Why it matters: Data centers have become a notable political football in the state, with both Democrats and Republicans responding to rising concern from residents over electricity costs.
- The most recent state budget, for instance, scaled back tax cuts that have existed for data centers in the state in response to growing opposition to them.
Driving the news: The White House pledge comes as Duke Energy is negotiating whether it can raise electricity rates in the state with the N.C. Utilities Commission. The utility recently reached a settlement that would see its rate request drop from 18% to around 9.5% for residential users.
- Part of that settlement mentions that Duke Energy will continue discussions over adding a tariff on large-load users — essentially rules that ask customers like data centers to pay for all associated costs with bringing new energy to them.
- The Utilities Commission has not yet decided whether to approve or amend the settlement.
State of play: Gov. Josh Stein and Attorney General Jeff Jackson, both Democrats, have become the most notable politicians to come out against the settlement — specifically citing a lack of new rules around large-load customers.
- "I am pleased to see that Duke Energy has signed on to the Ratepayer Protection Pledge," Stein said in a statement. "Now, Duke Energy must make that voluntary pledge real. The North Carolina Utilities Commission and Duke Energy must create a legally binding large load tariff to charge data centers their full freight, and they must establish a program that allows data centers to directly select and pay for their generation."
- "We're calling on Duke to make that same promise to the Utilities Commission, in writing, where it can be enforced," Jackson added in a statement.
Reality check: Neither Stein nor Jackson has a vote over what Duke Energy's rate request settlement will ultimately look like. Jackson has been involved in the rate request case, filing testimony and asking for new data center rules during it.
- But the two have upped their rhetoric in recent days around rejecting the proposed settlement before the Utilities Commission considers whether to accept or modify it.
The other side: Duke Energy, for its part, says it is already moving to protect customers from large-load users like data centers, a class of customer it forecasts to significantly grow in the coming years.
- Jeff Brooks, a spokesperson for the Charlotte-based utility company, said it is already putting a framework in place that ensures the grid can maintain reliable service any time a new data center is connected and create long-term contracts that protect customers by adding in customer-funded costs and termination charges.
- The company's internal analysis, he added, finds that these large projects can strengthen the grid and potentially bring down costs for other users over the long term.
Yes, but: That framework is not the same as one legally enforced by the Utilities Commission, in the eyes of the governor and attorney general's office.
What they're saying: Brooks said Duke Energy remains open to discussions around adding a tariff for large-load customers, but he believes Duke is already putting enough protections in place.
- "Whether that tariff happens or not, the protections are in place," Brooks told Axios. "The benefits we anticipate seeing from adding these large-load customers ... are going to be there regardless of whether there's a tariff or not."
Editor's note: This story has been updated to clarify that Attorney General Jeff Jackson has filed testimony in Duke Energy's rate request case.