NC AG Proposes New Data Center Rate Class

North Carolina’s attorney general has formally requested the state Utilities Commission to establish a distinct rate class for data center customers. This move aims to ensure that the significant grid strain caused by these facilities is paid for by the data centers themselves, rather than being absorbed by typical residential electricity users.

The proposal arrives amid a complex legislative environment where two competing bills, one from each major party, are currently stalled in committee. According to The Wake Weekly, meaningful votes on these measures are unlikely to occur until after the upcoming Election Day, leaving the regulatory landscape in a state of flux.

Legislative proposals stall in committee

Lawmakers have introduced separate bills to address the issue. A Democratic proposal from April included a tiered rate schedule, while a Republican bill from June focused on recommending a new class through a study. Both measures have faced procedural hurdles, with the Republican bill stalling in the Senate and the Democratic bill resting in the House Rules Committee.

The political dynamics are complicated by the fact that the Republican bill passed the House with significant bipartisan support, yet it has not received a Senate vote. This legislative gridlock means that the specific rules governing how data center costs are allocated remain unsettled, creating uncertainty for both utilities and consumers.

Duke Energy seeks rate hike

Separately, Duke Energy is pursuing a rate increase that it describes as 6.8% for residential customers over the next two years. However, the state’s attorney general argues that this figure is misleading and should be calculated as 9.3%. The utility company states the increase is necessary to strengthen the grid against storms and improve power plant efficiency.

For the average customer using 1,000 kilowatt-hours per month, this increase would add roughly $5.36 to the first-year bill and nearly $10 by the second year. Duke Energy serves a substantial portion of the state’s population, making these rate changes a significant financial factor for millions of households across the Carolinas.

Cost allocation remains disputed

The core of the dispute lies in how costs are allocated. The attorney general’s proposal seeks to ensure that data centers bear the full burden of the infrastructure changes they require. This approach is designed to protect residential ratepayers from bearing the financial weight of industrial expansion that they did not directly request.

While the legislative bills propose rewriting state statutes to define these responsibilities, the attorney general’s action focuses on the specific terms of utility contracts and cost allocation. This dual-track approach highlights the lack of a clear, unified strategy for managing the economic impact of the data center boom on the state's energy system.