NC leaders push Duke Energy to make federal data center pledge legally binding

Duke Energy joined a new federal pledge Thursday promising that households and small businesses will not have to pay the growing electricity costs associated with data centers — a commitment North Carolina leaders say the utility must now make legally enforceable.

President Donald Trump announced the expanded Ratepayer Protection Pledge as concerns grow that the rapid expansion of artificial intelligence and data centers could drive up electric bills nationwide. Duke, North Carolina’s largest electric utility, signed the voluntary pledge alongside other power providers, data center developers and state leaders.

“Duke just promised the federal government that it won’t shift the cost of data centers onto families,” North Carolina Attorney General Jeff Jackson said. “We agree, but a promise in Washington doesn’t lower a power bill in North Carolina.”

Jackson and Gov. Josh Stein are calling on Duke to make the commitment enforceable through new rate structures approved by the North Carolina Utilities Commission.

“Now, Duke Energy must make that voluntary pledge real,” Stein said. “The North Carolina Utilities Commission and Duke Energy must create a legally binding large-load tariff to charge data centers their full freight.”

Duke Energy spokesperson Jeff Brooks said the company supports the principle that data centers and other large power users should cover the costs required to serve them.

“The pledge today aligns with Duke Energy’s longstanding commitment to protect customers through our Customer Protection Plus framework,” Brooks said. “Our focus is straightforward: Data centers and other large-load customers must pay the costs required to serve them while creating long-term value for existing customers.”

The pledge comes during two major Duke Energy rate cases that could increase electric bills for millions of North Carolina customers.

Earlier this week, Duke Energy Carolinas reached a proposed settlement with the Utilities Commission’s Public Staff and several other parties that would increase residential rates by approximately 9.5% over two years, according to the Attorney General’s Office.

Jackson declined to join the settlement, arguing the increase remains too high. Duke initially sought an 18% residential increase before reducing its request to about 11.6% and later reaching the proposed settlement.

Duke has characterized the settlement differently, saying it would increase rates by an average of 3.7% annually across customer classes during the two-year period. Jackson’s office said that figure includes industrial customers and that Duke’s filings show residential customers would pay closer to 9.5% more overall.

The agreement would also require Duke to participate in a fast-track regulatory process to develop new rates for data centers and other large power users. The Utilities Commission must approve the settlement before it can take effect. If approved as proposed, the new rates would begin Jan. 1, 2027.

Duke Energy Progress, the company’s other North Carolina utility, is separately seeking an approximately 15% residential rate increase. Jackson argues that request includes nearly $960 million in unnecessary costs over the next two years.

Both cases come as Duke forecasts unprecedented growth in electricity demand from data centers, advanced manufacturing and North Carolina’s growing population. The company has said that growth requires investments in new power generation, transmission lines and other grid infrastructure.

Supporters of data center development say large customers can strengthen the electric grid and spread fixed costs across a broader customer base if utilities structure their rates properly. Data centers can also bring construction investment, tax revenue and jobs to the communities where they locate.

Consumer advocates warn that households could end up paying for power plants and infrastructure built around overly optimistic growth projections, particularly if planned data centers use less electricity than expected or never materialize.

The federal pledge seeks to address that risk by requiring large energy users to “build, bring or buy” new power supplies, pay for necessary grid upgrades and negotiate separate rate structures with utilities and state regulators. It also encourages data centers to make backup generators available during periods of high demand.

Trump said the pledge would allow the United States to continue expanding its artificial intelligence industry without shifting the cost to working families.

However, the commitments are voluntary. State utility regulators will still determine which costs utilities may collect from customers and how those costs are divided among residential, commercial and industrial users.

Jackson said Duke’s signing gives North Carolina regulators a commitment they can now press the company to formalize.

“We’re calling on Duke to make that same promise to the Utilities Commission, in writing, where it can be enforced," Jackson said.

Brooks said Duke plans to use long-term commitments, financial protections and careful planning to prevent new demand from shifting costs to existing customers while supporting electric reliability.

Duke also announced its Customer Protection Plus framework Thursday, which the company says could generate billions of dollars in long-term savings for existing customers. The framework calls for data centers to make long-term commitments, fund connection costs and provide financial protections against canceled or scaled-back projects. Duke says existing customers could benefit when revenue from large power users exceeds the cost of serving them.

“We must put customers first, and these agreements are designed to do exactly that,” Brooks said.