CHAPEL HILL, N.C.— Duke Energy’s business-as-usual approach to supplying energy to major new customers like data centers would largely rely on building expensive, polluting new gas-fired power plants, putting existing customers at risk of further bill increases and worsening climate-heating pollution. Worse, Duke Energy’s projection is likely based on inflated estimates, according to expert analyses submitted to the North Carolina Utilities Commission. The commission is holding a technical conference on October 14 and 15 to consider how the massive energy needs of new computer data centers will affect the grid and customers’ electric bills. The Southern Environmental Law Center requested the conference and represents clients Sierra Club, Southern Alliance for Clean Energy and Vote Solar in the proceeding before the commission.
“Holding this technical conference and addressing this challenge head-on is the type of leadership we like to see from the North Carolina Utilities Commission,” said Nick Jimenez, senior attorney at the Southern Environmental Law Center. “The crucial next step will be to turn the lessons from the hearing into action to save customers money and clean up the grid while allowing our economy to grow. I’m excited about the opportunity here.”
A recent expert report commissioned by SELC found that electricity demand forecasts tied to U.S. data center growth are plagued by uncertainty and systemic overstatement. Notably, the report, Uncertainty and upward bias are inherent in data center electricity demand projections”, revealed that utility company projections of data center load growth exceed the realistic availability of global semiconductor chip production capacities.
The clean energy advocacy groups sponsored Sierra Club expert Jeremy Fisher, who will present on these issues during the October 14 conference before the commission. “Regulators, utilities, and tech companies have an obligation to protect existing customers and households from the potentially massive impact of data center energy demand, and growing demand from other new energy-intensive businesses,” said Jeremy Fisher, Sierra Club’s Principal Advisor for Climate and Energy. “North Carolina has an opportunity to avoid the massive rate impacts unfolding in Virginia and Ohio, and protect existing utility customers from risks associated with speculative development.”
“Now is the time to put rules in place to serve the real needs and weed out the speculators,” said Eddy Moore of the Southern Alliance for Clean Energy. “And there is no reason not to let these big industries provide their own clean power instead of adding to the electric system costs that we all pay.”
Although more cost-effective and less risky solutions exist, Duke’s long-term resource plan proposes to build costly methane gas power plants, even though the core part of the power plant is facing supply chain backlogs and would be unavailable for about five years. The highly uncertain load growth and long lead time for the power supply mean that North Carolina customers are at risk of paying for expensive generation and transmission facilities that turn out to be unneeded or underused, for example, when built for data centers that do not materialize. In addition, customers would be even more exposed to the volatile gas prices that are directly passed through to customers and have driven the biggest increases in electric bills in recent years. Residential customers already pay a disproportionate share of power plant costs, and the commission urgently needs to make sure that data centers and other large energy users pay their fair share of the new round of power plant costs.
A better approach to both meet demand and lower the cost and risk to North Carolinians is a mandatory large-load tariff paired with customer protections, as detailed in a report prepared by the Rocky Mountain Institute for SELC’s clients in this proceeding, and no increase in net system pollution at a minimum. Better yet, the utilities commission could establish what SELC’s clients called a “Fast Forward” tariff, that would allow – or require – large customers to contribute to purchasing clean energy resources rather than the dirty methane generation that’s the core of Duke’s business-as-usual approach to serving their new demand.
About the Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with millions of members and supporters. In addition to protecting every person’s right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.
About the Southern Alliance for Clean Energy
Since 1985, the Southern Alliance for Clean Energy has worked to promote responsible and equitable energy choices to ensure clean, safe, and healthy communities throughout the Southeast. Learn more at cleanenergy.org.
About Vote Solar
Vote Solar is a nonprofit advocacy organization working to advance state-level policies that make solar and clean energy solutions accessible to all. Since 2002, Vote Solar has worked to build a just and equitable energy future by leveraging deep policy expertise, strategic partnerships, and public engagement. In the face of powerful opposition, Vote Solar champions bold solutions that expand clean energy access, drive investment in frontline communities, and accelerate the transition to 100% clean energy. For more information, visit www.votesolar.org.
Media contact: Kathleen Sullivan, SELC Senior Communications Manager (NC), 919-945-7106, ksullivan@selc.org
