NC Regulators Deny Duke Energy's $584M Gas Plant Permit

North Carolina’s Utilities Commission issued a rare denial of a specific generation permit to Duke Energy, rejecting the utility’s application to build a 255-megawatt single-cycle gas turbine in Richmond County. The decision halts the construction of what would have been the eighth smokestack at a station near the South Carolina border, a project Duke Energy had proposed last fall to address anticipated grid strain.

The commission’s 23-page order determined that the facility, estimated at $584 million, is premature due to unreliable projections of load growth. While Duke Energy’s modeling projects significant demand increases, the panel found that much of this growth relies on anticipated data center additions, which the regulators deemed insufficiently reliable to justify such a large capital expenditure at this time.

Data center uncertainty drives denial

The rejection stems directly from the volatility in data center demand forecasts. Commissioners noted that Duke Energy failed to provide sufficient evidence to distinguish between reliable baseline load growth and speculative additions from computer warehouses. This uncertainty complicates the cost-benefit analysis for a half-billion-dollar infrastructure asset, particularly when the primary driver is a sector experiencing rapid but unpredictable expansion.

This regulatory stance aligns with a broader bipartisan trend in the United States to scrutinize the impact of AI-driven energy consumption. Governors in New York, Texas, Pennsylvania, and Virginia have recently implemented measures or executive orders to manage data center growth, reflecting a political consensus that household electric bills must not rise to accommodate commercial power demands.

Ratepayer protection pledge cited in order

The ruling explicitly references the White House Ratepayer Protection Pledge, a document signed by Duke Energy and over 200 other utilities in March. The commission stated that to the extent Duke Energy seeks a permit to serve new data centers, it must demonstrate how the costs of the new capacity will remain consistent with the pledge’s requirement that residential customers not bear the burden of powering commercial data centers.

Duke Energy had previously received general approvals for fossil fuel infrastructure buildouts, but this specific permit denial marks a shift in how the commission evaluates individual projects. The order suggests that the company has not adequately proven that a gas turbine is the most cost-effective solution compared to alternatives like grid modernization, energy storage, or efficiency measures, especially when viewed against the state’s midcentury carbon zero mandate.

Regulatory surprise despite prior approvals

The decision was unexpected because the commission has frequently approved Duke Energy’s fossil fuel proposals in recent years, often without significant opposition from environmental or consumer groups. Will Scott, policy director at the Environmental Defense Fund, noted that permit proceedings were previously seen as foregone conclusions, making this denial a notable departure from the typical regulatory deference to the state’s predominant utility.

The ruling was supported by the three Republican appointees on the five-member panel, including Chair William Brawley, Tommy Tucker, and Donald Van der Vaart. Their vote highlights a growing emphasis on consumer protection and rigorous evidentiary standards for new generation capacity, even within a panel that has historically supported the utility’s broader infrastructure plans.