As technology companies expand power-hungry data centers, North Carolina regulators face a consequential question: who should pay for the infrastructure?
Charlotte is entering a new era of electricity demand, driven partly by artificial intelligence and the data centers required to run it. For technology companies, the expansion offers enormous opportunity. For electric utilities, it promises substantial new investment. For North Carolina households, it raises a question: will families and small businesses help pay for infrastructure built to serve some of the world’s largest corporations?
Duke Energy’s proposed rate increase
Duke Energy Carolinas initially sought an approximately 18% residential rate increase. A proposed settlement reduced the figure to approximately 9.5%, but Attorney General Jeff Jackson declined to support the deal, arguing that the increase remained too high. The proposal is subject to regulatory approval; it should not be mistaken for a final approved rate.
For illustration, a uniform 9.5% increase on a $150 monthly bill would add $14.25 per month, or $171 annually. Actual impacts depend on consumption and the approved rate structure.
Large users drive projected demand growth
According to the North Carolina Department of Justice, more than 80% of Duke’s projected new electricity demand comes from data centers and other large energy users. That does not mean AI accounts for 80% of Duke’s current power use, or for 80% of the proposed residential rate increase.
Data centers can require dedicated substations, new transmission connections and additional generating capacity. Those investments are often planned years in advance. If expected demand fails to materialize, the resulting financial exposure becomes a major regulatory concern.
New protections, unanswered questions
In October, Duke reached a proposed agreement on a large-load tariff for exceptionally large customers. The framework would require qualifying customers to pay for at least 75% of contracted electricity demand each month and cover certain facilities built exclusively for their use. It would apply to qualifying new customers meeting specified demand thresholds.
These provisions could reduce the risk of utilities building infrastructure for projects that are subsequently abandoned. But the proposal does not explicitly require large customers to pay the full cost of new power generation their demand may cause. Shared transmission investments and customers with earlier contracts present additional questions.
Federal regulators have considered related transmission protections. The Federal Energy Regulatory Commission accepted a Duke proposal that includes revenue commitments based on at least 75% of planned large-load demand for 15 years. Commissioners nevertheless highlighted continuing concerns about stranded costs and potential impacts on existing customers. Federal transmission rules and North Carolina’s proposed retail tariff are separate regulatory matters.
The utility’s argument
Duke argues that investments are needed to maintain reliability and accommodate growth. Large customers can also bring substantial revenue to the electricity system, potentially helping other customers if costs and risks are allocated appropriately. Not every dollar of a rate increase is attributable to data centers: utilities also invest in aging infrastructure, reliability and broader system needs.
That is why a defensible accounting must distinguish infrastructure driven by new large-load demand from investments needed regardless of AI growth.
What Charlotte residents deserve to know
Before major investments are recovered through electric rates, regulators should establish how much new capacity is attributable to data centers, what binding financial guarantees those customers provide, who pays if demand forecasts fall short, and how costs are assigned to households and small businesses.
The emerging framework offers meaningful protections, but it has not established that households are fully insulated from the cost of AI-driven electricity expansion. The principle is simple: customers creating extraordinary new demand should bear the costs and risks directly attributable to that demand.
Sources and reporting note
- North Carolina Department of Justice: proposed large-load tariff
- WFAE: large-load tariff and unresolved costs
- FERC: Commissioner See’s concurrence
- Duke Energy: rate settlement announcement
- North Carolina Department of Justice: rate increase objections
Reporting note: This explanatory article draws on public regulatory statements, utility announcements and published reporting available through October 25, 2026. It does not establish that a specific portion of the proposed residential rate increase is directly attributable to AI data centers. No original interviews were conducted.