Duke Energy Carolinas and Duke Energy Progress have reached a settlement with the North Carolina Public Staff, Amazon, Google, Meta, Microsoft, the Carolina Industrial Group for Fair Utility Rates (CIGFUR) and the U.S. Department of Defense that would set new terms for data centers and other large electricity users connecting to Duke's grid in the state. The agreement was made public on Oct. 6, 2026, and Duke announced it in a news release on Oct. 7. It takes effect only if the N.C. Utilities Commission (NCUC) approves it.

"It's simple – data centers will pay upfront for all costs to connect to the grid," Kendal Bowman, Duke Energy's North Carolina president, said in the company's announcement. "We're shielding other customers from these costs in a way that protects reliability," she added.

What the settlement would require

According to Duke, the terms would apply to large loads of 50 MW or more with an 80% load factor that sign an electric service agreement in North Carolina after June 1, 2026. The previous threshold for large loads was 100 MW or more, so the settlement would bring smaller projects under the terms.

Customers that meet the threshold would be required to:

  • make a nonrefundable upfront payment for grid facilities that serve only that customer, such as a substation;
  • post upfront deposits and security guarantees for grid upgrades that serve all customers, such as transmission lines; and
  • take service under the High Load Factor rate schedule, which Duke describes as a separate rate for large loads.

WFAE, in a report published by WUNC, reported that the settlement repurposes an existing tariff and makes it mandatory for customers that draw a lot of power most of the time. Data centers would pay upfront for dedicated facilities. Other transmission upgrades would first be spread across all customers and then repaid over the data center's contract with Duke. The station reported that this could raise rates in the short term and possibly lower them later, and that a data center leaving its contract early would pay only a fraction of its remaining balance. Some details of cost allocation are deferred to Duke's next rate case.

Which projects may fall outside it

WFAE reported that the tariff does not apply to companies that signed contracts with Duke on or before June 1, 2026. It listed Digital Realty's Moores Chapel project and the University City PowerHouse, both in Charlotte, and Amazon's Rockingham data center as possibly exempt. Duke said in its release that agreements signed before June 1 contain a similar set of protections.

Will Scott, N.C. policy director for the Environmental Defense Fund, told WFAE that the deal sets a "clear floor" for how much risk data centers take on compared with general ratepayers. He called it a step toward making data centers pay for the grid upgrades they cause, but said it does nothing for new power plants.

Context: Duke's merger and earlier framework

According to the company, the settlement adds to a "Customer Protection Plus" framework that Duke announced in July 2026. The agreement also comes ahead of the planned Jan. 1, 2027 combination of Duke Energy Carolinas and Duke Energy Progress into a single utility. The N.C. Department of Justice, in its statement on the proposal, said data centers and other large energy users would be subject to a large-load tariff for the first time in the state.

State officials: a starting point

On Oct. 14, Attorney General Jeff Jackson and Gov. Josh Stein issued a joint response. "This is a massive step forward in making sure data centers pay their fair share – but we're not done yet," Jackson said. "We're going to push for more transparency, more accountability, and more protections for ratepayers."

Jackson listed three things he says the proposal lacks. He wants large users to pay for the new power plants their demand requires, he wants data centers and other large users placed in their own rate class so the cost of serving them can be measured, and he wants an option for large users to build or bring their own clean power. Stein said, "While this action creates a new floor for what is possible, the Utilities Commission has more work to do," and added, "The Utilities Commission must require data centers to pay the full cost of their impact and bring their own clean energy."

Environmental and consumer groups object

The Southern Environmental Law Center (SELC) filed reply comments on behalf of the NC Justice Center, the NC Housing Coalition, the Southern Alliance for Clean Energy (SACE) and Vote Solar, according to an SELC press release. The groups argued that upfront payments for grid upgrades are too small, that large customers could leave by paying only a small fraction of upgrade costs, and that the settlement's minimum-bill protections are too lenient. They also argued that, unlike the commission's own proposal, the settlement does not create a separate customer class to track costs. They backed a mandatory large-load tariff to protect against stranded assets. In separate testimony in Duke's general rate case, expert witness John Wilson of Grid Strategies supported a customer class, stranded-asset protections and a "Clean Transition Tariff." The release also noted that the settlement had not been made available for public comment.

"The commission should adopt a stronger large load tariff," said Nick Jimenez, a senior attorney at SELC. Eddy Moore, SACE's decarbonization director, objected to what the release described as a last-minute "escape hatch" under which data centers "could pay only 25% of remaining electricity costs for years." Claire Williamson of the NC Justice Center said, "If the utility builds facilities for data centers, the data centers can't be allowed to walk away and leave North Carolina families and small businesses holding the bag."

What Happens Next

As of Oct. 20, 2026, the settlement is pending before the NCUC, which must approve it before it takes effect. Duke expects a commission decision by mid-November 2026. The commission's order will determine when and how the tariff is implemented. The remaining cost-allocation questions would go to Duke's next rate case, which WFAE reported could be about two years away.

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