NC denies Duke Energy request to expand gas turbine for future data centers
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In a rare move, North Carolina regulators will not allow Duke Energy to expand an existing natural gas power plant in Richmond County.
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Although Duke Energy said the project is necessary to provide power for expected data centers, members of the state Utilities Commission said they’re concerned that Duke is overestimating how much power these data centers will need, and that everyday customers could end up paying for the project.
Greenlighting the project at this point, commissioners wrote in a Friday decision, “will increase substantially the costs that ratepayers will need to bear and will impose a significant risk that new generation is approved before the need for that generation is determined.”
The Utilities Commission, a five-member group that oversees North Carolina’s utilities, rarely denies permits for major projects like this one.
The Sherwood H. Smith Energy Complex currently has five natural gas turbines and two other combined-cycle turbines, which generate over 2,200 megawatts in total — enough to power between 1.5 million and 2 million households. Duke Energy had requested a permit last year from the Utilities Commission to add a sixth natural gas turbine to the complex, which would’ve added about 255 additional megawatts of generation capacity.
To justify why it needs to expand the plant, Duke modeled how much power demand it expects to be added to the Eastern North Carolina grid, and estimated that it will need more than 25,000 new megawatts of power generation by 2035 to keep up with demand. Much of that demand will come from more data centers, which often require massive amounts of energy for their day-to-day operations.
However, state authorities haven’t finished independently reviewing and vetting Duke’s analysis to make sure it’s accurate. They’re set to complete that review in late 2026, but Duke told the Utilities Commission that they need a decision on this turbine before that review was over.
Waiting, a Duke Energy representative told the commission, “would inherently delay initiation of construction, and in turn, materially delay the in-service date” for this project of January 2030; it also “could increase construction costs.”
Building the expansion to the natural gas turbine would cost $584 million, a price tag that the Utilities Commission’s Public Staff called “staggering.” Yet Public Staff ultimately decided to recommend supporting Duke’s project.
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“Duke has continued to [add customers] at a rate that exceeds their ability to build generation, and so we’re in this position where we feel compelled to recommend approval of this facility simply because there’s no other options, even though this is a facility that costs half a billion dollars and you’re not getting a lot of value out of it for that amount of money,” an expert witness from Public Staff previously told the Utilities Commission.
Commission members, though, decided that they can’t yet confirm if the huge surge in electric demand that Duke projects is accurate.
Under a new state law that allows Duke Energy to charge customers for construction projects before they are completed, Duke’s existing customers would still pay for the expansion even if more data centers do not end up on the grid. The utility also profits from building new infrastructure — it currently has a state-set return on equity of 9.48%, meaning it will earn about that much back from any new capital investments it makes.
The Smith Energy Complex sits right next to the site of a proposed Amazon data center in Richmond County. The data center, which is still awaiting final approval, has faced pushback from local residents over its plan to use diesel generators for its first several months of operation, and as backup power once it’s connected to the energy grid.
“The Commission held today that Duke’s rush to gas to support speculative data center build-out in North Carolina is too rapid and too expensive,” said Will Scott, policy director of the Environmental Defense Fund, in a statement. “Clearly, Duke’s desire to satisfy short-term demand should not saddle customers with what are, over the long-term, likely to be inefficient, stranded assets.“
Duke has not yet responded to a request for comment.
Duke could still re-file its permit application for the turbine expansion, but would need to respond to several specific concerns from the Utilities Commission if it did re-file.
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This story was originally published September 18, 2026 at 2:29 PM with the headline “NC denies Duke Energy request to expand gas turbine for future data centers.”
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