Duke Energy’s proposed data center deal would set new rules for big power users, days before Charlotte votes on its moratorium

Duke Energy has reached a settlement that would make new data centers and other very large power users in North Carolina pay upfront for the grid equipment built to serve them and take service under a separate rate, the Charlotte-based utility announced on October 7. The deal now goes to the North Carolina Utilities Commission, which is expected to decide by mid-November, according to Duke Energy.

The agreement lands as Charlotte is deciding how to handle data centers inside the city. The City Council has a public hearing and vote scheduled for Monday, October 12, on extending its moratorium on new data centers through October 11, 2027, as covered in our October 2 report.

Who signed and what it covers

The settlement is between Duke’s two North Carolina utilities, Duke Energy Carolinas and Duke Energy Progress, and the North Carolina Public Staff, the state agency that represents utility customers. Amazon, Google, Meta, Microsoft, the Carolina Industrial Group for Fair Utility Rates and the U.S. Department of Defense also signed, according to Duke’s announcement. The main terms, from Duke and Axios Raleigh:

• New customers using 50 megawatts or more at an 80 percent load factor, or any customer above 150 megawatts, would fall under the rules.
• They would make a nonrefundable upfront payment for equipment that serves only them, such as a substation.
• They would post deposits and security guarantees for upgrades that serve everyone, such as transmission lines.
• They would take service under a separate High Load Factor rate schedule and pay for at least 75 percent of their projected demand each month, even if they use less.
• They would owe damages for ending a contract early or cutting their contracted demand.

Kendal Bowman, Duke Energy’s North Carolina president, said in the announcement that “data centers will pay upfront for all costs to connect to the grid.” Duke said the company had previously required data centers and other customers of 100 megawatts or more to agree to contract terms that protect other customers, and that substantial customer protections took effect in 2024. The settlement lowers that threshold and puts the terms in a rate schedule.

What it means for Charlotte projects

The new rules would apply only to large customers that sign an electric service agreement after June 1, 2026, according to Duke. Contracts signed before that date already contain similar protections, the company said.

That cutoff matters in Charlotte. The exemption may include Digital Realty’s Moores Chapel project in west Charlotte and the PowerHouse data center in University City, along with Amazon’s project in Rockingham, WFAE reported. The two Charlotte projects, as previously reported:

• Digital Realty is planning two 200-megawatt buildings of 1.3 million square feet each off Moores Chapel Road, with a new Duke substation paid for by the developer, as covered in our September 24 report.
• PowerHouse bought about 122 acres in Charlotte for a campus of five buildings totaling 2.5 million square feet, with 300 megawatts of power, possibly rising to 500, targeted by April 2027 and a new on-site substation built with Duke, DatacenterDynamics reported in 2024.
• The first phase of PowerHouse Charlotte is exempt from the city’s current moratorium, and Digital Realty had city approval for the company’s Moores Chapel and Uptown campuses before the pause took effect.

Duke Energy Carolinas, which serves Charlotte, has about 2.3 million household and business customers in central and western North Carolina, and Duke Energy Progress has about 1.6 million. The two utilities are set to combine into one on January 1, 2027, according to Duke.

What critics say is missing

No clean energy groups signed the agreement, Axios Raleigh reported. The Southern Environmental Law Center, which filed comments for the North Carolina Justice Center, the North Carolina Housing Coalition, the Southern Alliance for Clean Energy and Vote Solar, said the settlement does not require enough upfront payment for grid upgrades and lets large customers leave after paying a small fraction of the costs they caused, according to the group. Eddy Moore of the Southern Alliance for Clean Energy said large customers could exit by paying only 25 percent of remaining electricity costs for years.

Under the settlement, some transmission upgrades would at first be spread across all customers and paid back over the life of a data center’s contract, which could raise rates in the short term and possibly lower them later, WFAE reported. Nick Jimenez, a senior attorney at the SELC, told WFAE that the deal does not guarantee data centers pay the full cost of new transmission, and said “the rest of us are stuck holding the bag.” Will Scott of the Environmental Defense Fund called the settlement a step in the right direction on grid upgrades that falls short on new power plants, according to WFAE.

Gov. Josh Stein urged the Utilities Commission to act on rising bills, and Matt Abele of the North Carolina Sustainable Energy Association said the rules should go further, especially on clean energy, Axios Raleigh reported. The rules do not require large users to buy clean energy. Duke’s separate request to raise electricity rates is still awaiting state approval.

What happens next

The dates to watch, according to Duke, Axios Raleigh, WFAE and earlier reporting:

• October 12: The Charlotte City Council holds a public hearing and vote on extending the data center moratorium through October 11, 2027.
• November 5: The city’s current moratorium expires unless the council extends it.
• Mid-November: The Utilities Commission is expected to rule on the settlement, and the commission’s order will set when and how the rules take effect.
• January 1, 2027: Duke Energy Carolinas and Duke Energy Progress combine into a single utility.

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