Duke Energy’s 15% rate hike request sparks debate over data center energy demand

CHARLOTTE — Electric bills in North Carolina have increased approximately 22% since 2020, according to a state task force report.

Duke Energy is currently seeking an additional 15% rate increase over the next two years as a debate grows over how data center expansion affects consumer costs.

Data centers, which house computer servers for digital storage and artificial intelligence, make up about 30% of upcoming development projects in the state.

While they currently represent a small portion of energy usage, they are projected to account for 80% of future energy demand in North Carolina.

Tejon Robinson, a resident of Charlotte, noted the increase in his recent bill following a cold snap.

Robinson lives alone and said his monthly costs have been rising steadily over the past few years. “That’s a noticeable jump,” Robinson said. “I would say it jumped about like $30, and I live alone.”

The Environmental Defense Fund attributes the rising costs to several factors, including increased energy demand and higher natural gas prices.

Will Scott serves as the North Carolina policy director for the organization. He expressed concern that the rapid expansion of energy-intensive data centers will require building expensive new power plants.

“You’re gonna have to build new power plants to support those data centers, and the cost of those power plants under our current system would be socialized across everyone who uses electricity in the system,” Scott said.

He suggested that state lawmakers should intervene by requiring large-scale customers to pay special fees or higher rates to cover their share of infrastructure costs.

Duke Energy spokesperson Bill Norton disputed the claim that data centers are the primary cause of rising utility rates.

Norton stated that data centers currently represent less than 1% of the energy system’s capacity. He attributed the majority of rate increases to the rising cost of infrastructure maintenance and equipment.

“For them to shoulder the blame really is misleading,” Norton said. “When you look at Transformers, Poles, power lines, material costs have really increased dramatically over the past few years.”

Norton also noted that the company’s proposed rate increase is primarily focused on improving the existing energy grid rather than serving large industrial customers.

Norton further argued that industrial growth in the Carolinas helps lower individual costs by expanding the customer base. He contrasted the region with other markets where a shrinking population must share the burden of upgrade costs.

“When you have a large amount of growth coming in that can spread costs over a larger customer base,” Norton said.

Duke Energy is currently seeking a 15% rate increase to be implemented over the next two years. State officials and advocates continue to weigh how large energy consumers should be billed for future grid expansion.

“We have to decide what we think is a good deal for our states,” said Scott.

VIDEO: Duke Energy seeks 15% rate hike in NC amid big investments to meet surging demand

Duke Energy seeks 15% rate hike in NC amid big investments to meet surging demand

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