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 an official say over what Duke Energy's rate request settlement will ultimately look like.
- But they have upped their rhetoric 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."