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Utility giant Duke Energy may not be a household name, but it sits at the epicenter of the AI data center boom and affordability debate as it plans to spend an industry record of $103 billion for growth over just five years\u2014and CEO Harry Sideris isn\u2019t afraid to say he expects that eye-popping number to grow.<\/p>\n
\u201cOurs will probably go up as we move into the future because the growth is not slowing down,\u201d Sideris told Fortune in a sit-down interview recently, citing the AI surge. \u201cWe\u2019re only beginning. This thing is not just a blip; it\u2019s going to go on for a while into the foreseeable future.\u201d<\/p>\n
Charlotte-based Duke aims to add about 20 gigawatts of new power generation over a decade through gas-fired power plants, solar energy, battery storage, grid upgrades, and efficiency gains. That\u2019s enough to service about 15 million homes. Compare that to the nearly 17 million residents in the combined Carolinas. And that\u2019s not even counting the next-generation nuclear power that Duke aspires to add in due time.<\/p>\n
Duke counts Amazon, Microsoft, Google, and Meta as major data center customers and has some of the fastest-growing states in population in its Southern and Midwestern service area. Charlotte-based Duke\u2014the highest-ranking utility in the Fortune 500 at No. 144\u2014leads the regulated utility industry in power generation and grid scale. The 125-year-old company gets its name from the power and tobacco industrialist, James Buchanan \u201cBuck\u201d Duke, whose family also gave its name to Duke University.<\/p>\n
\u201cIt\u2019s a good time to be in the utility business. I say that we\u2019re the cool kids now,\u201d said Sideris, who just finished his first year as CEO following an entire career at Duke and predecessor companies. \u201cEverybody else has picked up on it.\u201d<\/p>\n
But despite Duke touting an emphasis on affordability and rate hikes below industry peers, its rates are still rising. Data centers account for only a fraction of the price increases, but the overall situation has sparked a feud with the Democratic North Carolina Gov. Josh Stein and others.<\/p>\n
Stein complained earlier in April that Duke is asking for both a 15% rate hike and an extra $800 million in fuel costs, arguing that Duke is shifting the \u201ccost of electricity from large industrial users onto the backs of regular people, making your utility bills more expensive.\u201d<\/p>\n
Sideris counters that Duke\u2019s data center deals require the hyperscalers to pay for their own infrastructure. Duke\u2019s rate hikes are needed, he said, because of population growth and grid upgrades, including hardening infrastructure to combat increasing severe weather events from climate change. In Duke\u2019s footprint, Florida and the Carolinas are three of the fastest-growing states in the country for population, while Ohio, Kentucky, and Indiana are showing more modest growth. And all of them are attracting more data center projects.<\/p>\n
\u201cThere are certain parts of the country where [data centers] are driving the cost higher in some of these markets. That\u2019s not in our territory,\u201d Sideris said, pointing to the Northeast and other parts of the Midwest.<\/p>\n
\u201cThat doesn\u2019t mean [rates] are not going to go up because there is so much to build. The data centers are paying for theirs, but there\u2019s so much to build for population migration. We have 200,000 people moving into our service territory each year. So that takes infrastructure that does get spread out amongst everybody,\u201d Sideris said. \u201cThen there\u2019s the other piece of that, which is hardening and making your system more resilient. That\u2019s adding value, but it does cost money to invest in that. We\u2019re replacing our wooden poles, like in Florida, with steel and concrete.\u201d<\/p>\n
The great power generation race<\/p>\n
Out of Duke\u2019s $103 billion capital spending plan\u2014and counting\u2014about 60% is dedicated to building new power generation, while the rest is going to grid expansions and upgrades\u2014essentially the poles and wires.<\/p>\n
Duke represents the single-biggest slice of the pie out of Investor-owned utilities nationwide aiming to spend at least $1.4 trillion through 2030, according to the nonprofit PowerLines. In doing so, utilities\u00a0requested a record high $31 billion in rate hikes in 2025\u2014more than twice the near record from 2024.<\/p>\n
And speed in spending those trillions is critical to meet the needs of the AI hyperscaler developers, who emphasize the race against China for global AI supremacy.<\/p>\n
Sideris argues that being a vertically integrated utility is an advantage in the AI game.<\/p>\n
\u201cThe hyperscalers tell us that,\u201d Sideris said. \u201cThey love to come to us because they know that there\u2019s one person to deal with, and you\u2019re going to be able to serve me from here to here.<\/p>\n
\u201cA lot of the issues that are in markets don\u2019t exist for us because we go from soup to nuts\u2014from the grid planning to the generation planning,\u201d he added. \u201cWe can tell exactly how long it\u2019s going to be.\u201d<\/p>\n
Another key advantage is the early adoption of so-called demand-side management\u2014essentially requiring data centers to rely some on their backup power on the hottest and coldest days of the year when demand peaks. Sideris said Duke was the first utility to require such curtailments from hyperscalers to get them onto the grid more quickly.<\/p>\n
\u201cWhat we found is 99.99% of the time, we have plenty of power, but it\u2019s those really cold mornings or those really hot afternoons,\u201d Sideris said. \u201cIn our contracts, we have 50 hours (per year) that we can curtail them.<\/p>\n
\u201cTheir first and foremost objective is speed, so this allows them to come online now versus having to wait\u2014just for that short period of time\u2014for an upgrade on a transmission line or a transformer to come in.\u201d<\/p>\n
To meet the power demand, Duke is adding a lot of gas power. Duke contracted with GE Vernova for about 20 new, gas-fired turbines. Duke also is investing heavily in solar and batteries. And, with a large legacy nuclear fleet, Duke is extending the lifelines of its nuclear plants and upgrading them to produce more power.<\/p>\n
And, yes, the plans involve keeping some of the dirtier coal-fired plants on life support beyond the previous goal of phasing out coal by 2035.<\/p>\n
\u201cWe have always said that we\u2019ll make sure that we keep things reliable and affordable first and foremost, and then increasingly clean,\u201d Sideris said. \u201cSo, as this new load has grown so much, it has actually moved some of those (coal) dates out.\u201d<\/p>\n
Part of the feud with Gov. Stein involves a law approved in North Carolina last year\u2014overriding the opposition of the governor\u2014to eliminate certain state mandates for carbon emission reductions by utilities, and to allow for more flexibility on certain rate hikes.<\/p>\n
Critics saw this as bad for ratepayers and for the environment, while supporters said it was necessary for grid reliability and growth\u2014both for population and data centers.<\/p>\n
After all, out of the $1.4 trillion in nationwide utility capital spending, the bulk of spending is in the South\u2014from Texas to Maryland\u2014where $572 billion in spending is planned. Next up is the Midwest with $272 billion in spending on the books.<\/p>\n
Climate change and \u2018bananas\u2019<\/p>\n
The spending costs will rise much higher if the utilities are reactive instead of proactive in their efforts to support growth and harden the grid, Sideris said.<\/p>\n
The Duke service area has taken hard hits of late from Hurricane Helene in 2024 to Winter Storm Fern in January.<\/p>\n
\u201cWe take a very data-driven approach. We do know that storms are getting more frequent and stronger, and we\u2019re seeing impacts in places that we usually didn\u2019t see impacts,\u201d Sideris said, citing repeated weather-related outage problems in the western Carolinas, typically more immune from weather events than Florida and the coastal regions.<\/p>\n
\u201cWhere are the issues? Florida and on the coast of the Carolinas. That\u2019s where we\u2019ve been hardening things,\u201d he said. \u201cBut then we have the storm that just completely destroyed western North Carolina, so we\u2019re having to rethink what we need to do there.\u201d<\/p>\n
After decades of limited or flat electricity growth nationwide, the industry is dealing with record growth at the same time the grid needs major upgrades and repairs. All of that costs a lot of money.<\/p>\n
And, when it comes to the AI boom, Sideris says there\u2019s a range of views: Some welcome data centers and the added tax revenues, while others put up a fight. So communication is key. \u201cAnytime you want to build infrastructure anywhere, there are going to be questions,\u201d he said, and those questions deserve honest answers from Duke stakeholders who live and work in the same communities.<\/p>\n
On the other hand, he said, some people simply oppose everything that\u2019s new\u2014well beyond NIMBYism, \u201cnot in my backyard.\u201d<\/p>\n
\u201cI call it BANANAs now. Build absolutely nothing anywhere [near anything],\u201d Sideris said. \u201cIt used to be not in my backyard, but now even people who don\u2019t live there don\u2019t want it.\u201d<\/p>\n
#Utility #giant #Duke #Energy #plans #spend #industry #record #billion #growth #data #centers #boom<\/p>\n","protected":false},"excerpt":{"rendered":"
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