Dive Brief:
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Regulatory Decision: North Carolina regulators denied Duke Energy’s request for constructing a 255-MW natural gas-fueled simple cycle combustion turbine at the Smith Energy Complex, citing concerns over load growth uncertainty and high cost.
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Price Concerns: The North Carolina Utilities Commission (NCUC) deemed the proposed $584 million project “staggering” and questioned its necessity and value to customers.
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Load Growth: While Duke’s model anticipates significant load growth, much of it relies on projected data center customer additions, which the commission deemed unreliable. Duke expressed disappointment over the decision and is reviewing potential next steps.
Dive Insight:
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Capital Spending: In February, Duke stated its $103-billion capital spending plan is the largest for any regulated U.S. utility, aiming to benefit from the data center boom.
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Commitment to Protection Pledge: Duke maintains that the proposed turbine is vital for reliable service as energy demand continues to grow. The commission referenced Duke’s commitment to the White House Ratepayer Protection Pledge to avoid burdening other customers with data center costs.
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Hydrogen Capable Turbine: The proposed turbine was a hydrogen-capable F-class unit initially estimated at 240 MW, later confirmed to be 255 MW. The Smith Energy Complex houses existing F-class generating units, and the new generator could potentially be online by January 1, 2030.
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Public Staff Support: Despite their initial opposition, the public staff ultimately supported the turbine proposal, indicating a recognized need for capacity.
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Planning Reserve Margin Concerns: There are worries that Duke might violate a required 22% planning reserve margin by 2031. Public staff emphasized the urgency of developing new resources to meet reliability concerns.
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Evaluation Parallelism: The commission’s decision reflected a need to evaluate Duke’s demand modeling in the context of its broader planning efforts, including the Consolidated Carbon Plan and the Integrated Resource Plan (CPIRP). The commission expects a decision on Duke’s CPIRP by late 2026.
Duke maintains this gas project could expedite new capacity deployment, but the regulatory path remains uncertain.
