NORTH CAROLINA — Duke Energy has agreed to cut its proposed rate increase roughly in half, striking a settlement with regulators, consumer advocates, and major corporate customers. It raises residential bills 9.5% over two years instead of the 18% Duke originally sought.
After a settlement with the North Carolina Utilities Commission Public Staff, representing customers, and business and environmental groups, Duke Energy negotiated operational costs, which further exacerbates rate reductions for energy customers than what was floated previously this year. The agreement still must be approved by the North Carolina Utilities Commission; though, the state attorney general still opposes the agreement and could take it to court should it pass.
The proposal is for Duke Energy Carolinas customers, representing the triangle and western portion of the state. Though the utility company has agreed for a similar deal with Duke Energy Progress customers, making up residents in the coastal region, including the tri-county areas. Duke plans to merge the two entities by Jan. 1, 2027; the $143-million deal is expected to save customers anywhere from 1.6 to $3.2 billion through 2038, according to varied analyses.
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In the agreement Duke rate hikes will be around 9.5% for residents only — 5.9% the first year and 3.6% the second year. It breaks down to an average monthly increase of $9.39 in 2027 and $5.52 in 2028 per 1,000 kilowatt-hours.
When looking at all customer rate classes — inclusive of residential, commercial and industrial — the total increase is 7.4%, with 4.3% coming monthly in 2027 and 3.1% monthly in 2028 (this comes out to $6.53 in 2027, followed by another $4.66 in 2028 on monthly bills).
Originally, Duke was proposing an 18% rate increase and deduced it to 11.6% voluntarily last month. Gov. Josh Stein spoke out at the time that the savings was a start but didn’t think it went far enough. Neither did Attorney General Jeff Jackson, an intervenor in the case.
Earlier this week, Jackson expressed displeasure with the current settlement and the impact it would have on customers, saying he would reject the proposal.
“That is movement in the right direction, but it is still too high,” he wrote in a statement. “We are not joining this deal and we will keep pushing for lower rates.”
According to Kendall C. Bowman, the president of Duke Energy Carolinas and Duke Energy Progress, the settlement balances “customer affordability with the investments needed to ensure continued reliability, resilience, and economic growth.” Duke also says it keeps rates competitive.
The company is the primary energy provider in North Carolina, which proposed its rate plan in fall 2025; by statute, the Utilities Commission has to approve any rate increases by September 2026, 10 months after the plan was put forth. The agreement includes a profit rate return of 9.8%, rather than 10.1% equity previously suggested, with operations funded by 53% from shareholder equity and 47% from debt.
Currently, Duke Energy Progress households pay roughly $165 a month. Around 13% of the average bill goes to shareholders, which comes out to around $21.
Jackson said the 9.8% equity return remains above what he supported in his expert testimony, which was 7.4%. By his account, it would save customers $1.37 billion over the next two years.
Around $21.8 million revenue is anticipated to come from new customers, though individual utility payers have protested against some of them. Data centers have been at the forefront of discussion as of late, with residents worrying they’re subsidizing corporations, or “large load customers.” Some infrastructure projects for connecting large-load customers are not resolved in the agreement due to a “potential large load tariff,” according to Duke.
Gov. Stein also spoke to this on social media Tuesday: “These are some of the largest and richest companies in the world. They can pay more to lower everyone else’s rates.”
But the utility has agreed to be part of a process that will establish new rules for data centers or other large utility users. Jackson supported the parallel proceeding but said its aftereffects and protections on families really depend on details that come from the collaboration.
“The Attorney General’s Office will participate in the separate proceeding and press for rules that require data centers and other large users to bear the costs of the new power plants, transmission lines, and other infrastructure needed to serve them,” Jackson told the press.
Certain large-load interconnection facilities are removed, helping the settlement agreement shrink Duke’s rate base by $173.2 million.
Cosigners of the agreement include Public Staff, North Carolina Sustainable Energy Association, the Carolina Industrial Group for Fair Utility Rates, Carolina Utility Customers Association and corporations, such as Microsoft and Andale.
Some stipulating parties, like Microsoft and Andale, have growing industries in North Carolina. For instance, Microsoft is developing two data centers in Catawba and Person counties, in an effort to support increased AI and cloud computing demands. Andale is a subsidiary of Meta (Facebook), which has a data center in Forest City, North Carolina.
“We appreciate our stakeholders’ engagement in finding a path that allows us to more cost-effectively serve the Tar Heel State,” Bowman said in a statement. “Our shareholders will also contribute $10 million to low-income bill assistance and weatherization programs – over and above our existing funding – which will make a real difference for customers who need help the most.”
The Utilities Commission is hearing expert witness hearings and testimonies in Raleigh through August. Should the commission approve of the agreement, new rates would take effect Jan. 1, 2027.
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