North Carolina regulators have denied Duke Energy’s request to construct a $584 million natural gas turbine near Hamlet. The North Carolina Utilities Commission stated that Duke has not demonstrated the necessity of the project or provided sufficient information on cost protections for customers.
This denial halts the planned expansion of the Sherwood H. Smith Energy Complex, although Duke can reapply with more substantiated evidence on electricity demand forecasts, costs, and alternative solutions for meeting that demand.
The proposed turbine would generate around 255 megawatts of electricity by 2030 and is close to Amazon’s planned $10 billion data center in Richmond County, though the commission clarified that the turbine was not specifically for Amazon.
The commission highlighted that much of Duke’s projected growth is associated with future data centers. They expressed concerns about approving the turbine before establishing its necessity, which could lead to customers bearing costs for a project that might not deliver sufficient value.
While the Public Staff recommended approval of the turbine, describing its costs as “staggering,” one commissioner disagreed, asserting that the project is essential for grid reliability amid increasing electricity demand.
Duke has previously indicated that large customers, such as data centers, cover the direct costs of connecting to their system, while the overall power plant costs are distributed among users based on their electricity consumption. The company also has agreements with these large customers that include provisions for financial security of other users in case the project does not succeed.
The commission emphasized that Duke failed to clarify how these protections would apply to the turbine and sought a detailed explanation in any future application regarding financing, demand related to data centers, and the possibility of utilizing less expensive resources for reliable power supply.
