Duke Energy settles with Amazon, Google, Meta, Microsoft on data center costs

What the settlement requires

The settlement involves Duke Energy's two North Carolina utilities, Duke Energy Carolinas and Duke Energy Progress, and the North Carolina Public Staff, the agency representing utility customers. Other parties include Amazon, Google, Meta, Microsoft, Carolina Industrial Group for Fair Utility Rates and the U.S. Department of Defense.

According to Duke Energy, the agreement memorializes and enhances customer protections the company put in place proactively in 2024 to make sure large-load customers pay the costs to serve them. Its summary lists three main elements:

• A nonrefundable, upfront payment for electric grid facilities that serve only that customer, such as a substation to connect to the grid.
• Upfront deposits and security guarantees for grid upgrades that serve all customers, such as transmission lines.
• A requirement that new large-load customers, including new data centers, take service under a High Load Factor rate schedule, described as a separate rate established for large loads.

Who is covered and when

Duke Energy had previously required data centers and other large loads of 100 megawatts or more to agree to contract terms that protect other customers from such costs. If state regulators approve the new agreement, it would apply to all large-load customers of 50 megawatts or more with an 80% load factor that sign an electric service agreement (ESA) in North Carolina after June 1, 2026.

ESAs signed before June 1 already contain what the company calls a full suite of similar customer protections.

"It's simple, data centers will pay upfront for all costs to connect to the grid," said Kendal Bowman, Duke Energy's North Carolina president, according to the company's release. She added: "We're shielding other customers from these costs in a way that protects reliability and ensures everyone benefits from the economic growth coming to North Carolina."

Link to Customer Protection Plus and next steps

In July, Duke Energy announced its Customer Protection Plus framework, which the company says outlines how data center growth will result in billions of dollars of future customer benefits and save money for existing customers. According to Duke Energy, the new agreement adds to that framework and specifically addresses issues raised by North Carolina regulators and customers.

The agreement is subject to approval by the North Carolina Utilities Commission, with a decision expected by mid-November. Duke Energy Carolinas serves about 2.3 million households and businesses in central and western North Carolina, including Charlotte, Durham and the Triad. Duke Energy Progress serves about 1.6 million customers in central and eastern North Carolina and in the Asheville region. The two utilities will be combined into a single utility as of Jan. 1, 2027.

What it means

The settlement matters because several of the largest technology companies that build data centers signed on alongside the agency that represents utility customers. If the commission approves it, large new customers in North Carolina would pay for connection costs upfront and take service under a dedicated rate, rather than relying on existing customers to cover those costs. Duke Energy says the approach protects reliability while allowing the state to benefit from economic growth tied to data centers.