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After weeks of negotiations, Duke Energy and several other groups have agreed on a new large load tariff — a set of standard contract terms that big energy users, including data centers, will have to follow.
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As data centers begin using massive amounts of energy from local electric grids, large load tariffs are seen as a way to make sure that big customers pay a fair rate for power. Currently, 36 other states have either approved or are considering a large load tariff.
The large load tariff that Duke and other industry groups have agreed on includes some guardrails meant to prevent large customers from passing electricity costs on to everyday households. It requires large sums of money upfront, and makes it expensive for customers to break a contract.
“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. “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.”
Yet the tariff doesn’t have support from any of the environmental or renewable energy groups that have been involved in discussions with Duke Energy for the past two months. Its biggest backers are data center developers.
Matt Abele, director of the North Carolina Sustainable Energy Association, said that public interest groups had wanted the tariff to incentivize data center customers to provide their own clean energy — a move that could encourage developers, rather than Duke ratepayers, to pay for new power plants that serve data centers. State regulators and data center developers had said they were interested in such a proposal, called a Clean Transition Tariff, but it never appeared in the final agreement.
“It’s incredibly disappointing, given the fact that we consistently see clean resources continue to be the most cost-effective generation assets for ratepayers, and also the most effective tools to provide speed to market for these large load customers that are looking to interconnect to the grid faster,” Abele said.
The tariff requires large customers to pay in full for any “dedicated facilities” — new electric infrastructure that will only support that project — and sets hefty fines for customers that terminate their contracts early, ranging from $25 million to over $587 million depending on the customer’s energy demand and length of contract.
It also requires them to deposit — through a letter of credit within 60 days of signing their service agreement with Duke — the full cost of other electric grid upgrades that are “necessary to serve the customer load.” While developers would ultimately get most of that deposit back, they would cede that money to Duke if they ended their contract early.
However, the Southern Environmental Law Center and other environmental groups argued in a Wednesday statement that these terms are still “far too lenient.”
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“Duke is realizing that North Carolinians will not accept the risk of building out the grid for speculative data center needs, and they know the commission is listening,” said Jake Duncan, senior Southeast regulatory director at Vote Solar. “The commission has already shown it is ready to place strong protections in place for regular customers and shouldn’t walk backwards to accept the weaker provisions in Duke and the hyperscalers settlement.”
The tariff doesn’t create a new category or set new electric prices for data centers specifically; instead, it applies to customers whose demand is over 50 megawatts of power and consistently operate close to their peak capacity over a 12-month period, as well as all customers whose demand is over 150 megawatts of power.
These customers will pay the same standard electric rates that Duke already charges for any customer with a demand over 1 megawatt. They’ll have to pay each month for at least 75% of their projected electricity demand, even if they use less.
For the past two months, Duke Energy has been leading discussions with around 20 energy industry groups about a potential large load tariff. Each participant has had the chance to come up with proposals about how they would want such a tariff to work.
All of these discussions have happened in private, but tariff proposals and comments have been filed publicly to the N.C. Utilities Commission.
In documents filed with the Utilities Commission on Tuesday, Duke and seven other groups signed onto a settlement agreement, pledging to support a specific version of the tariff.
The groups that supported the tariff include data center developers Amazon, Microsoft, Google and Andale, a subsidiary of Meta; the U.S. Department of Defense; CIGFUR, an industry group for large businesses; and North Carolina’s Public Staff, a state-run consumer advocacy group that’s part of the Utilities Commission.
In the coming weeks, the five members of the Utilities Commission will decide whether to approve this settlement. That will happen as part of Duke’s ongoing case, in which it’s seeking a rate increase for its customers in Charlotte and western North Carolina.
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This story was originally published October 7, 2026 at 11:06 AM.