Data Centers to Face New Power Billing in Duke Energy’s Region

The US utility said new customers will pay for a set amount of power even if they use less.

Bloomberg News

May 8, 2024

1 Min Read
Data Centers to Face New Power Billing in Duke Energy’s Region
Image: Bloomberg

(Bloomberg) -- Duke Energy Corporation has set up a new way to bill data centers and factories for electricity in the latest move by US utilities to deal with the massive growth in energy demand.

The US utility began putting the rate structures into place for new customers late in the first quarter after Duke’s “hyperscale team” studied how to make sure those users are shouldering their fair share of grid improvements and other costs, Chief Financial Officer Brian Savoy said in a Tuesday interview.

“The companies are looking for areas where there is capacity, but it’s not unlimited,” Savoy said after Duke released its first-quarter earnings. “They understand the scarcity of power supply and how important it is to lock it up.”

Parts of the new structure would make customers pay for a set amount of power over a certain period of time even if they use less. Another component is contributions in aid of construction, in which the customer pays for grid upgrades required by their development, Savoy said.

Electric utilities are confronting the largest increase in demand in a generation. Along with data centers to run artificial intelligence, the US grid is being stressed by new factories and wide-ranging electrification from cars to home heating. The question of how power companies should charge data centers and other large loads for electricity has been a common one this earnings season, with analysts pressing Southern Company and American Electric Power Company for details on their plans.

Related:Data Centers Now Need a Reactor’s Worth of Power, Dominion Says

Duke is one of the largest regulated providers of electricity and natural gas in the US.

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