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FERC approves Duke large-load tariff that shields ratepayers from data center costs

FERC approves Duke large-load tariff that shields ratepayers from data center costs

Rule Changes

FERC's 4-1 ruling requires 100 MW loads to pay 75% of planned transmission for 15 years, while North Carolina weighs a 50 MW threshold

October 15th, 2026: FERC discusses large-load cost allocation at open meeting

Overview

Updated Oct 26

A data center that asks Duke Energy Carolinas for grid upgrades must now commit to paying at least 75% of its planned transmission service for 15 years, even if usage falls short. The Federal Energy Regulatory Commission approved the revised tariff on a 4-1 vote, its first ruling since June orders told grid operators to justify their large-load rules.

The next round is in North Carolina. Duke, the state Public Staff and technology companies have filed a settlement covering loads of 50 megawatts or more, with a ruling expected by mid-November. FERC's lone dissenter, Judy Chang, said the 15-year promise is backed by as little as a month of transmission revenue.

Why it matters

When data centers request grid upgrades and then underuse them, residential ratepayers get the bill. This rule shifts that risk back to the large loads.

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Key Indicators

75%
Committed revenue contribution
Large loads must pay at least 75% of planned transmission service value for 15 years, even if actual usage is lower.
15 years
Commitment term
Payment obligation runs from the in-service date of the network upgrades built for the load.
100 MW
FERC large-load threshold
The federal rules apply to new or transferred loads of 100 megawatts or more.
50 MW
North Carolina threshold
The state settlement Duke has described would cover large-load customers of 50 megawatts or more with an 80% load factor.
4-1
FERC vote
Commission approved the tariff with one dissent, from Commissioner Judy Chang.

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People Involved

David Rosner
David Rosner
FERC Commissioner
Voted to approve Duke's tariff; urged broader national protections
 Judy Chang
Judy Chang
FERC Commissioner
Dissented from Duke tariff approval
CS
Commissioner See
FERC Commissioner
Concurred with the majority

Organizations Involved

Duke Energy Carolinas
Duke Energy Carolinas
Investor-owned electric utility
FERC large-load tariff approved; North Carolina settlement awaits a ruling

Electric utility subsidiary of Duke Energy serving customers in North Carolina and South Carolina.
Federal Energy Regulatory Commission (FERC)
Federal Energy Regulatory Commission (FERC)
US federal regulator
Approved Duke tariff; overseeing national large-load review

Independent federal agency regulating interstate electricity, natural gas, and oil transmission.

Timeline

May 2026 October 2026

7 events Latest: October 15th, 2026 · 4 weeks ago
Tap a bar to jump to that date

  1. FERC discusses large-load cost allocation at open meeting

    Latest Regulatory Meeting

    Commissioners discussed large-load cost allocation alongside PJM interconnection orders and pending permitting reform at the October 15 open meeting.

  2. FERC approves Duke's large-load tariff

    Regulatory Decision

    FERC approves Duke's 15-year, 75% committed revenue contribution for loads of 100 MW or more, 4-1.

  3. Ohio Supreme Court weighs challenge to AEP data center tariff

    Legal

    The court is considering an industry group's challenge to the American Electric Power data center tariff that Ohio regulators approved in 2025. RTO Insider called the case one with national ramifications.

  4. Duke, Public Staff and tech firms file North Carolina large-load settlement

    Settlement

    Duke, the North Carolina Public Staff and technology companies filed a settlement on large-load tariffs; regulators are expected to rule by mid-November 2026. The deal Duke has described would cover customers of 50 megawatts or more with an 80% load factor.

  5. Walmart challenges Duke large-load deal in North Carolina

    Legal

    Walmart objected to provisions in Duke's large-load settlement, including one that would require customers forecasting demand of 150 megawatts or more to take service under a high-load-factor tariff, regardless of their expected load factor.

  6. FERC issues show cause orders on large-load rules

    Regulatory Action

    FERC orders RTOs and ISOs to show their large-load interconnection rules adequately protect existing customers.

  7. Duke proposes large-load tariff revisions

    Regulatory Filing

    Duke Energy Carolinas files NITSA revisions adding large-load cost-shift protections.

Scenarios

1

RTOs and ISOs adopt Duke-style large-load protections

Likely Resolves by Aug 1, 2027

Discussed by: FERC show cause orders; Commissioner Rosner's concurrence; Utility Dive

FERC's June orders require RTOs and ISOs to file large-load rule responses by November 2026. If those filings are inadequate, Rosner's concurrence signals FERC is prepared to order committed revenue contributions or equivalent protections across the country.

2

Duke tightens financial security requirements after FERC signal

Possible Resolves by Q2 2027

Discussed by: Commissioner Chang's dissent; Commissioner See's concurrence

Both commissioners flagged the mismatch between Duke's 15-year payment commitment and the thin security backing it. FERC's order encourages Duke to enter individual agreements or add further protections. A revised filing adding explicit security requirements would address the gap Chang identified.

3

State regulators extend protections to 50 MW loads

Likely Resolves by Q2 2027

Discussed by: Duke Energy news release

Duke has proposed a separate state-level agreement covering loads of 50 MW or more with an 80% load factor, below FERC's 100 MW threshold. If Carolinas state regulators approve it, cost-shift protections would reach smaller data centers than the federal rules cover.

4

Ohio Supreme Court rules on AEP data center tariff

Uncertain

Discussed by: RTO Insider

The court is weighing an industry group's challenge to the AEP data center tariff state regulators approved in 2025. A decision either way could influence how other states and FERC approach data center cost-shift protections.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

July 2023

FERC Order 2023 interconnection overhaul (2023)

FERC issued Order 2023, overhauling generator interconnection rules after queues ballooned into multi-year waits. The order set deadlines, required cluster studies, and made generators post financial commitments to stay in the queue.

Then

Reduced speculative projects; generators now face stricter deadlines and commercial readiness requirements.

Now

Established the precedent that new grid entrants bear more of the cost and risk they create.

Why this matters now

Same agency using tariff reform to fix cost allocation. Duke's large-load rules apply the same logic to the demand side — new loads must commit to paying for upgrades.

2023-2025

Data center load boom pressures utility planning (2023-2025)

Utilities from Virginia to Texas sharply raised load forecasts as data centers requested hundreds of megawatts each. The requests overwhelmed interconnection studies and raised questions about who pays for resulting grid upgrades.

Then

States and utilities began debating cost-recovery mechanisms; some proposed dedicated data center tariffs.

Now

Pushed FERC to examine large-load rules, leading to the June 2026 show cause orders.

Why this matters now

This demand surge is the direct backdrop for Duke's tariff and FERC's broader large-load review.

Sources

(12)
+6
Utility Dive Federal Energy Regulatory Commission RTO Insider Duke Energy News Center The Duck Curve Daily Energy Insider Data Center Feed The North State Journal The Inference Energy Central Federal Energy Regulatory Commission RTO Insider