Key facts
- North Carolina regulators rejected a proposed 250-megawatt gas plant for an Amazon data center.
- GOP commissioners cited concerns over cost recovery and compliance with a voluntary agreement for utilities to ensure tech companies pay for grid upgrades.
- Duke Energy stated the project was part of a least-cost path for reliable and affordable service.
- Amazon secured permits for 57 temporary non-emergency diesel generators and nearly 600 backup diesel-fired generators.
- Residents expressed concerns over emissions from the data center and generators.
North Carolina regulators on Friday rejected a proposed 250-megawatt gas plant that would have supplied power to a massive Amazon data center, citing concerns over cost recovery and compliance with a voluntary agreement championed by President Donald Trump. The Republican commissioners on the panel stated that if Duke Energy reapplies, the utility must offer cost recovery mechanisms aligned with the White House's pledge for utilities to ensure tech companies, not everyday customers, bear the costs of grid upgrades needed for AI data centers.
Duke Energy, which signed the pledge, expressed disappointment and said it would evaluate its next steps. A spokesperson for the utility, Craig Wilson, stated that the project was part of a least-cost path to maintain reliable and affordable service as energy demand grows.
Amazon has secured permits from the state's Department of Environmental Quality for 57 temporary non-emergency diesel generators to operate for a year while the facility connects to the grid. The company also obtained a second permit for nearly 600 diesel-fired backup generators. These permits have faced opposition from local residents in Hamlet, North Carolina, who are concerned about increased emissions of fine particulate matter.
Caroline Cress, senior attorney at the Southern Environmental Law Center, criticized the reliance on diesel generators, stating, "Amazon, one of the wealthiest companies in the world, and Duke Energy, a regulated monopoly, can and should do better than belching deadly soot pollution into the air North Carolinians breathe from a whopping 649 diesel-fired generators powering a massive data center."
Commission staff noted that rejections of Duke Energy gas projects are rare, with only one similar instance in the past 35 years. The Republican commissioners also took issue with approving new gas generation before Duke's long-range energy plan and questioned whether alternatives like battery storage were adequately evaluated. Commissioner Tucker expressed concern about the plant's cost and the potential for stranded assets, stating, "Given the size of this expenditure and the associated possibility for stranded assets, I believe that the Commission requires more evidence supporting the need for the Proposed Facility."
Will Scott, North Carolina policy director for the Environmental Defense Fund, described the commission's denial with such strong language as "very rare." He noted that while the commission is developing a large load tariff to assign data center energy costs to operators, the costs of the rejected gas project would have fallen on ratepayers.