NC Gov, AG call for data center owners to help pay for new power plants

North Carolina Gov. Josh Stein and Attorney General Jeff Jackson called on state regulators Tuesday to require prospective data center developers to shoulder more of the cost for the additional power they’ll need — or to produce more of it themselves through renewable energy.

The N.C. Utilities Commission has been working for months with Duke Energy and other stakeholders to iron out how data centers should be charged for the power they need. On Oct. 7, Duke announced the group had reached an agreement on a large-load tariff on data centers, as well as requirements that data centers pay for any grid upgrades needed, like transmission lines and substations.

According to the N.C. Department of Justice, Amazon, Meta affiliate Andale LLC, Google and Microsoft have all agreed to the deal, along with the United States Department of Defense and all other federal agencies.

The Utilities Commission still has to vote to approve the proposed agreement.

Stein called the proposal “a step in the right direction,” but said it’s inadequate because it doesn’t require data center owners to help pay for any new power plants the state will have to build to supply their needs.

“The overall rate of load growth projected in the next 15 years is at least five times what it was in the previous 20 years,” Stein said. ”Data centers make up about 80% of that future projected energy demand,” Stein said.

Stein said a new report produced by the state’s Energy Policy Task Force found that by 2050, the additional power that data centers will need is projected to cost North Carolina about $50 billion.

“If nothing changes, then we’re all going to end up having to pay for that in our electricity bills. It is absolutely unacceptable,” Stein said.

The governor also urged the commission to consider requiring data centers to “build or bring their own clean energy.” In other states, he said, tech giants like Meta, Google and Amazon have agreed to build or fund hundreds of megawatts of wind, solar and battery storage projects to offset their power needs.

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“If just half of the new large customers directly pay for or bring the clean energy that they need and operate that flexibly, it will save ratepayers $20 billion,” Stein said.  “There is no reason why the largest, wealthiest companies in the history of the world cannot be required to pay for the energy generation and transmission costs that they put onto the system.”

Jackson also urged the commission to approve the deal as a starting point. But he suggested that a large-load tariff might not be sufficient. He said regulators should consider creating an entirely new rate class for large data centers, which he said would better ensure they pay their share.

“We have residential, we have commercial, we have industrial, but really these data centers exist as a separate category because of the sheer amount of energy” they need, Jackson said.

“The Utilities Commission has not rendered a final judgment here yet. So while there is still time on the clock, the governor and I are making our case to the Utilities Commission to have strong defenses for families and your average ratepayer to make sure that costs are not shifted onto them,” Jackson said.

Asked for comment, Duke Energy spokesperson Bill Norton didn’t specifically address Stein’s and Jackson’s recommendations.

“Powering the demands of a growing state at the lowest possible cost requires balanced, diverse energy sources and is at the heart of the Carolinas Resource Plan and our recent settlement on a large load tariff,” Norton said in an email. “We look forward to continuing to work with Governor Stein, the North Carolina Utilities Commission, and other engaged partners on clean energy programs that can benefit all customers.”

No date has been set yet for the Utilities Commission to act on the proposed deal.