North Carolina Regulators Reject Duke Energy's $584 Million Gas Plant Over Data Center Demand Doubts

The North Carolina Utilities Commission denied Duke Energy's request to build a $584 million gas turbine in Richmond County, ruling the company had not proven the data center demand it cited actually justifies the cost.

The commission's order, issued September 18 according to OneWorld Solar and reported by Utility Dive on September 22, rejected Duke's plan for a 255-megawatt hydrogen-capable combustion turbine at the Smith Energy Complex, near the South Carolina border. The site sits across the street from an incoming Amazon data center campus, according to WSOC-TV.

The commission's reasoning was blunt. Much of the growth Duke projected "appears to be based upon anticipated data center customer additions," the panel wrote, and that data was "insufficiently reliable for the Commission to act at this point," according to energycentral. One commissioner separately noted the $584 million price tag did not "provide reliability value."

Commission staff testimony called the cost "staggering" and "very expensive," per Utility Dive. That's notable because Duke's own Public Staff had initially opposed the project before reversing course, ultimately recommending approval on the grounds that Duke's "aggressive signing of new load" left no faster alternative, according to an errata sheet cited by Utility Dive.

Reporting on the count of turbines diverges. WSOC-TV described the plant as the "sixth gas-fired turbine" at the complex. Canary Media called it the "eighth smokestack." Utility Dive's account of the site's existing infrastructure, five F-class simple-cycle units plus two F-class combined-cycle units, backs Canary Media's number of seven existing units plus one proposed. Readers should treat WSOC's lower count as the outlier.

The commission specifically flagged Duke's participation in the White House Ratepayer Protection Pledge, a voluntary industry commitment not to stick regular customers with data center costs. The order said the record "does not adequately establish the specific extent to which the Proposed Facility is intended to serve the anticipated growth in data center customer demand," meaning Duke couldn't show it would actually honor that pledge on this specific project.

Commissioner Donald van der Vaart, in a concurrence reported by WSOC-TV, said he supports gas as a fuel source generally but wanted Duke to prove alternatives like battery storage couldn't meet the same timeline for less money. One commissioner dissented, siding with Duke's argument that delaying the project would ultimately cost ratepayers more.

Duke's position deserves a fair hearing here. The company told investors in February that its $103 billion capital spending plan is the largest on file for any regulated U.S. utility, driven by what it calls genuine, rapid growth in electricity demand. A Duke spokesperson said the company believes it "demonstrated that the Smith combustion turbine is part of a least-cost path to maintain reliable and affordable service for customers as energy demand continues to grow across North Carolina," and said Duke remains "committed to working constructively with regulators" on a path forward. If data centers like the Amazon campus next door actually materialize as forecast, and the grid comes up short on hot summer days, ratepayers could face blackouts or scramble for costlier emergency power. That's the same logic the dissenting commissioner used.

But the commission wasn't inventing skepticism out of thin air. Three weeks before the denial, the Department of Energy had to authorize Duke Energy Carolinas to direct backup generators and batteries at data centers to run before shedding firm load, during a forecast peak of 22,295 megawatts, according to OneWorld Solar. That's an emergency measure, not routine planning, and it shows the grid is already being stretched thin by exactly the kind of uncommitted, speculative load growth the commission now wants proven before authorizing a 30-year, ratepayer-funded asset.

The commission didn't kill the project outright. It deferred the application until the review of Duke's 2025 Carbon Plan and Integrated Resource Plan wraps up, which OneWorld Solar reports isn't expected before late 2026. Duke can refile if it addresses the cost concerns and demonstrates why this specific plant beats the alternatives.

This fits a broader pattern in North Carolina regulatory proceedings this year. The state Attorney General asked the commission in September to create a dedicated rate class for Duke's data center customers, publish template contracts, and move load forecasts to a 90-day review cycle, according to OneWorld Solar. Separately, a solar and storage procurement required under the Carbon Plan has been paused since April, with a ruling expected in early October.

Nationally, the stakes are larger than one turbine. Global Energy Monitor found U.S. gas-fired capacity under development has jumped 50% since January, from 252 gigawatts to 378 gigawatts, with roughly half tied directly to data center buildout, at a projected capital cost exceeding $647 billion if every project gets built. Jenny Martos of Global Energy Monitor warned that "building all of this gas for AI locks in decades of pollution and dependence on a volatile fuel cost, which will get passed down to rate payers." North Carolina's commission just became the first major test of whether regulators will actually make utilities prove that demand before signing off on the bill.