A pending Duke Energy rate case in North Carolina is testing a model that would let large electricity consumers like AI facilities self fund transmission infrastructure — and other states are watching closely.
A North Carolina household could see its monthly electric bill climb about 18% if state regulators approve Duke Energy's current request, and the case that decides it is becoming the first real test of who pays for the grid that will serve the data centers now being built across the Carolinas.
The proposal, pending at the North Carolina Utilities Commission, would raise the typical residential bill by roughly 18% over the rate case window, according to reporting by Elizabeth Ouzts at Canary Media. Duke says the increase is needed to harden a grid it expects to carry a far larger load by 2035, and to pay for the new plants and wires that come with that growth. Critics say Duke is using speculative data-center demand to justify a generational buildout that residential customers would shoulder even if those data centers never arrive.
The fight has crystallized around a single policy lever: a new "large load" customer class, a separate rate category for the biggest new electricity users, mostly AI and cloud data centers, that would require those customers to commit to paying for a fixed share of their projected demand for at least 20 years. Under the framework Southern Environmental Law Center attorney John Wilson laid out in expert testimony filed at the NCUC, the threshold would be 25 megawatts of demand and a commitment to pay for at least 85% of projected usage over a 20-year horizon, with the customer responsible for any grid upgrades needed to serve it. The North Carolina Attorney General's office and the NCUC's Public Staff have proposed versions of the same idea. Microsoft, which is building data centers in the state, asked the commission on June 8, 2026 to open a separate proceeding for the tariff rather than fold it into the general rate case, a sign of how much is at stake for the largest buyers.
The load forecast is the trigger. Duke added 8 gigawatts to its Carolinas demand projections to serve 43 anticipated large-load projects through 2035, a number Wilson cites in his testimony and that Duke has used to justify roughly 9.7 GW of new gas-fired generation inside the same horizon. A separate Canary Media report on Duke's recent generation planning shows the company pulling back on renewable additions in favor of gas as it sizes the system for that data-center demand.
Duke opposes carving out a separate class. A Duke spokesperson — identified by Canary Media as "Norton of Duke" without a title on the record — said the utility already negotiates electric service agreements with each data center on a case-by-case basis, and that the terms are confidential and vary by customer. Advocates counter that the very opacity of those bespoke deals is the problem: without a tariff on the record, neighbors of a data center cannot tell whether they are subsidizing it. A 2026 explainer from Canary Media on the same fight notes that Virginia, Texas, Georgia, and Ohio are all writing their own versions of this rule.
The dollars are not small. Duke's 2025–2029 corporate capital plan, covering 2025 through 2029 according to the NCUC filing and Duke's corporate disclosures, sits at $87 billion against roughly $190 billion in current assets — consumer advocates cite this framing to illustrate the scale of the expansion, though the specific percentage calculation is drawn from Duke's own corporate filings rather than an independent source. SELC, representing the Southern Alliance for Clean Energy, the NC Housing Coalition, Vote Solar, and others, is asking the commission to set Duke's allowed return on equity at 9.1%. Wilson calculates this would save customers about $370 million based on the differential between SELC's 9.1% request and Duke's own pending ROE request — a figure Wilson derived from that gap, though Duke's specific requested ROE percentage is not independently verified in the provided sources. The Attorney General is pushing for 7.4%. A lower allowed return would flow directly through to the rate base Duke collects on.
A second track could change what kind of power the new data centers actually run on. In a separate docket, Duke agreed earlier this year to reconsider a voluntary "clean transition tariff" that would let large customers contract with Duke as an intermediary for 24/7 carbon-free electricity. The mechanism would not change the bill, but it would let a data center, or any large buyer, require that the megawatt-hours it consumes come from new clean supply rather than the marginal gas plant. The data-center industry has pressed for access to that kind of contract in multiple states.
On the ground, the politics are moving faster than the docket. Counties across North Carolina have passed or considered moratoriums on new data-center construction, and the NCUC's recent public hearings have drawn overflow crowds over the companion energy-bill debates. The commission is expected to hear expert testimony in the rate case through the summer and to issue a decision in the fall.
What the commission writes down in that order will travel. Every state that hosts hyperscale data centers is wrestling with the same question: when a utility plans a transmission line or a gas plant for a single anchor tenant, who guarantees the money if the tenant leaves. North Carolina is among the first states to put a tariff shape for that question on the record, and the next 18 months of data-center permitting in Virginia, Texas, Georgia, and Ohio will be argued against whatever it decides.