House Democrats are focusing on data centers and Duke Energy as part of a series of legislative proposals they say are meant to focus on affordability in North Carolina.
House Bill 1063, dubbed the Ratepayer and Resource Protection Act, mandates that all data centers operating in North Carolina publicly report information about their electricity consumption, peak demand, water consumption, cooling systems and any emissions-free electricity generation they're using.
It would also mandate all data centers that use more than a billion liters of water annually or that have a peak electricity demand of more than 40 megawatts generate at least a quarter of their power using generation sources that don't emit carbon dioxide.
Rep. Lindsey Prather, D-Buncombe, pointed to the roughly dozen North Carolina local governments that have passed moratoriums pausing data center development in their jurisdictions while they work to determine local land use regulations around the facilities.
"North Carolinians want us to get ahead of this. ... If a company wants to build a data center in North Carolina, they can. They must simply pay their own way and stop shifting the cost onto you, me and families like ours," Prather said during a Monday afternoon press conference.
North Carolina is drawing increased attention from data center developers, who are drawn by the state's relatively low electricity costs, abundant amounts of vacant land and tax incentives that are among the country's most attractive for the projects.
House Bil 1063 proposes making changes to those tax incentives, repealing exemptions to state sales and use tax for things like construction costs, replacement of servers and electricity.
"North Carolinians can end up footing the bill twice, through incentives and subsidies that never contemplated projects like these," Prather said.
Gov. Josh Stein, a Democrat, has asked a bipartisan state energy task force to study the exemptions and recommend either repealing them or tweaking them, potentially to add a sunset clause. North Carolina does not have data about how much sales tax data centers are exempt from paying, but N.C. Department of Commerce estimates place it somewhere between $45 and $57 million, a number the department says could climb to about $450 million in the coming years.
The bill would also prevent both state and local governments from providing incentives to data centers, including infrastructure grants on the state side and property tax abatements or grants on the local government side.
The legislation is a long-shot, sponsored solely by a quartet of Democratic lawmakers who are in the minority in the State House.
Asked if the lawmakers had discussed the bill with their Republican counterparts, Rep. Vernetta Alston, D-Durham, indicated they had not.
"This is the agenda that we feel addresses the crises that are in front of us, that are in front of working everyday North Carolinians. And if folks want to come to the table and help us pass these bills, we're open to a conversation," Alston said.
Proposed changes to ratemaking
House Democrats are also calling for changes to the Utilities Commission's performance-based regulation standards. Under performance-based regulation, Duke Energy can raise utility rates as long as it meets certain agreed-upon incentives that are intended to provide broader value to ratepayers.
For example, a performance-based regulation in a rate case can include encouraging utility-scale clean energy and storage; reducing energy burdens for low-income customers; or encouraging reductions in carbon dioxide emissions.
"Our bill says that if a utility wants to be rewarded for performance, it will show real results in lowering our customers' and our energy bills, reducing shutoffs, improving efficiency, cutting peak demand and keeping overall costs under control," Rep. Monika Johnson-Hostler, D-Wake, said Monday.
Duke Energy reported earlier this year that it earned more than $4.9 billion company-wide during 2025. Democrats are proposing requiring that any performance-based rate case include at least two measures, both tied to the company's earnings or revenue.
The first would focus on affordability, requiring the Commission to tie reductions in energy burdens or arrearages to Duke Energy's revenue or earnings. The second would focus on energy efficiency, tying reductions in energy used at peak times to Duke's revenue or earnings.
Democrats' proposal would tweak the performance ratemaking structure approved as part of landmark 2021 energy legislation, updating the number of performance-based regulations required in a rate case from one provision to two. It would continue to require the Utilities Commission to consider reliability of the grid when considering a performance proposal, as well as whether it could favor one class of customers over another.
