Duke Energy Carolinas residential customers would see their electricity rates rise approximately 9.5% over two years under a proposed settlement that substantially reduces the utility’s original request but has drawn criticism from Gov. Josh Stein and Attorney General Jeff Jackson.
Duke announced on July 17 that it had reached an agreement with the North Carolina Public Staff, the state agency that represents utility customers. The settlement must still be approved by the North Carolina Utilities Commission.
Under the agreement, residential rates would rise approximately 5.9% beginning Jan. 1, 2027, followed by another 3.6% in 2028. The average residential customer using 1,000 kilowatt-hours per month would see a $9.39 monthly increase in 2027, raising the bill from $156.81 to $166.20. Another $5.52 increase would follow in 2028, bringing the total increase to nearly $15 per month.
The settlement cuts the previously proposed residential increase nearly in half from what Duke originally sought. The utility had already reduced its request to 11.6% before reaching the latest agreement.
Duke describes the settlement as producing an average annual increase of 3.7%, or approximately 7.4% over two years, when residential, commercial, and industrial customer classes are combined.
While Stein and Jackson focused on Duke’s rate request and the potential costs of data-center growth, John Locke Foundation CEO Donald Bryson argued that state energy policy is a primary driver of the proposed increases.
Bryson said during the July 24 episode of PBS North Carolina’s “State Lines” that the rate debate should account for the cost of replacing existing coal plants and complying with the state’s carbon-reduction policy.
“Why doesn’t Attorney General Jackson understand that we passed a carbon law back in 2021 that is making Duke Energy change its resource plan?” Bryson said. “They have all of these coal power plants all around the state that are financed. They are paid for. And we’re saying you have to shut those down. You have to build more stuff. And Duke’s saying, well, that costs money.
“And if you look at the resource plan they put out, they’re trying to recoup $1.2 trillion in costs. More than 20% of that is just for battery storage that they otherwise wouldn’t have had to build had we not passed the carbon plan. If you want to change how we have electricity in the state, it’s going to cost some money.”
House Bill 951, enacted in 2021, directed the Utilities Commission to develop a carbon plan and initially required a 70% reduction in carbon dioxide emissions from certain electric generating facilities by 2030, compared with 2005 levels, and carbon neutrality by 2050. Lawmakers eliminated the interim 2030 requirement in 2025 but left the 2050 carbon-neutrality goal in place.
Stein said the settlement represents an improvement but continues to place too much of the burden on households.
“While this settlement improves upon Duke’s initial request, it still asks too much of North Carolinians struggling to make ends meet,” Stein said in a social media post. “To protect everyday ratepayers, the Utilities Commission needs to impose a large-load tariff that requires Duke to make the data centers pay their full share of the expensive electricity infrastructure investments they need. These are some of the largest and richest companies in the world. They can pay more to lower everyone else’s rates.”
Jackson declined to join the settlement, arguing that the reduction from Duke’s original proposal did not go far enough.
“Duke started this case, asking families for an 18% increase. We pushed back, and now it’s own filing shows 9.5%,” Jackson said in a press release. “That is movement in the right direction, but it is still too high. We are not joining this deal, and we will keep pushing for lower rates.”
Jackson’s office also argued for a lower authorized return on equity, which represents the profit Duke is permitted to earn for shareholders. Duke originally requested a 10.95% return, while the settlement proposes a 9.8% return. Jackson recommended 7.4%, which the attorney general’s office estimated would save customers $1.37 billion over two years.
Duke said the agreement balances customer affordability with the need to invest in the electric grid and power-generation system.
“In light of the cost pressures our customers are facing, along with continued conversations with other stakeholders, we felt we had to do more,” said Kendal Bowman, Duke Energy’s North Carolina president. “We appreciate our stakeholders’ engagement in finding a path that allows us to more cost-effectively serve the Tar Heel State. Our shareholders will also contribute $10 million to low-income bill assistance and weatherization programs — over and above our existing funding — which will make a real difference for customers who need help the most.”
Duke’s latest resource plan proposes a combination of natural gas, nuclear power, solar generation, and battery storage while extending the operation of some coal plants. Duke says the investments are also needed to meet rapidly growing electricity demand driven by population growth, manufacturing, and data centers.
According to the John Locke Foundation’s Jon Sanders, director of the Center for Food Power and Life, Duke Energy’s latest Carolinas Resource Plan filings show that by 2040 new natural gas capacity would be roughly twice as productive as the new solar capacity, while the new nuclear capacity would be nearly four times as productive as the new solar.
“While more than one-fourth (26 percent) of the capacity mix in 2040 will be solar, only about one-sixth (18 percent) of the generation will come from solar,” wrote Sanders. “In contrast, only one-sixth (17 percent) of the capacity mix will be nuclear, while the plurality (42 percent) of generation will come from nuclear.”
The Utilities Commission will make the final decision on the settlement. If it is approved as filed, the first round of new rates would take effect Jan. 1, 2027.
