Duke Energy, the electric utility that controls nearly all of North Carolina’s power generation, is pushing forward with a natural gas buildout intended to support a deluge of new data centers.
The utility checked off a crucial step in that process Monday evening, when the Davidson County Board of Commissioners approved a rezoning request from Duke to build a liquified natural gas storage facility along the Yadkin River near Lexington.
The county board split over the zoning change, which passed on a 4-3 vote. A grassroots group, fueled in part by public skepticism of data centers, led opposition to the project in partnership with several environmental advocacy organizations.
One of those organizations, the Southern Coalition for Social Justice, sent the Davidson commissioners a 17-page letter last week arguing that the proposed project conflicts with the county’s land use policies.
Aiswarya Murali, a staff attorney for SCSJ, explained that state statute requires counties to assess whether a rezoning request is consistent with its adopted land development plan.
“Based on our analysis, it is a clear ‘no,’” Murali told Carolina Public Press.
“The land development plan very clearly commits to preserving agricultural land, protecting natural resources, as well as locating industrial development in appropriate places.”
Murali cited air and water pollution, industrial noise, light pollution and burden to neighboring property owners through easements and land acquisitions as potential consequences of the project.
Ultimately, the commissioners narrowly sided with Duke, which assured them of the safety of liquified natural gas and touted the jobs and taxes the facility would bring. Board chair Karen Watford referenced recent power outages in Thomasville as a reason for her aye vote.
“I think about that little old lady down the street, your grandmother on the other side of the county, them losing power for long periods of time and possibly dying because of it,” Watford said.
“I think we need this.”
Commissioner Tripp Kester disagreed.
“The way I look at it is, ‘Is this in the public interest?’” Kester said.
“From everything I’ve heard in the last week … obviously they ain’t interested, and they don’t want it. And I can’t support it.”
Power plants await scrutiny from NC regulators
The rezoning request was for 1,600 acres of land that previously had been designated as a rural agricultural area. Duke Energy has owned the land for decades but hasn’t done much with it other than lease it out to a hunting club.
Now, Duke sees that parcel as a crucial part of a project it's calling the Davie-Davidson Energy Complex. The company is currently seeking approval for two gas-fired power plants in Davie County. In neighboring Davidson County, it wants to build a liquified natural gas storage facility to support those power plants.
Davie and Davidson are bisected by the Yadkin River. Duke plans to connect the power plants and the storage facility with a pipeline which will run under the river. But before any of those proposed facilities can be built, they need to be approved by state regulators.
If recent history is any tell, approval is far from guaranteed.
The North Carolina Utilities Commission, which consists of five appointed members, must give the go-ahead when it votes later this year to finalize Duke’s integrated resource plan. That’s the biennial document that lays out how much new power generation Duke is permitted to build based on projected demand.
In September, the Utilities Commission blocked Duke’s attempt to build a separate gas-powered power plant in Richmond County, calling its permit application “premature” given that the commission was still reviewing the utility’s integrated resource plan.
Duke had tried to circumvent the traditional timeline and get approval for the power plant before its resource plan had been finalized. The company said it did so because any delay in getting new power plants approved could result in higher construction costs and difficulty meeting increased demand from “large-load” users such as data centers.
The Utilities Commission didn’t buy the argument, writing in its order that potentially higher construction costs didn’t necessitate expedited approval of a project that was certain to raise customers’ rates.
The commission also questioned the accuracy of Duke’s projections, which suggested that electricity demand would spike in the coming years. Approval of the Richmond plant would “impose a significant risk that new generation is approved before the need for that generation is determined,” the commission wrote.
Clean energy advocates criticize pivot to natural gas
The Davie-Davidson and Richmond projects are part of a larger push by Duke to increase its power generation through natural gas. It is currently building gas-fired facilities in Catawba County and Person County, which are expected to come online by 2029 and 2030, respectively.
Natural gas is primarily methane, a greenhouse gas. It is generally considered a cleaner energy source compared to other fossil fuels, such as coal, but it isn’t “zero emission.”
According to Shelley Robbins of the Southern Alliance for Clean Energy, the reason for Duke’s shift to natural gas is simple.
“Money, money, money,” Robbins said.
Of course, that is not Duke’s position. The company has told regulators that electricity demand is rising in the era of artificial intelligence, and it is merely trying to keep up.
Duke is statutorily obligated to go carbon-neutral by 2050, but renewable energy sources like wind and solar aren't far along enough to meet the short-term needs. In the interim, it has ramped up development of natural gas facilities and delayed the sunsetting of its coal-fired plants.
New data centers make up most of the increased demand for electricity, but Duke has also been upfront about its efforts to recruit these projects to North Carolina. That makes for a sort of chicken-and-the-egg problem, Robbins said.
Organizations like the Southern Alliance for Clean Energy have criticized Duke for prioritizing its business interests over its customers. Ratepayers are facing a 9.5% increase in their electric bills next year, and that price hike didn’t even account for the potential cost of proposed projects like the ones in Davie and Davidson.
Earlier this year, Duke proposed a “large-load tariff,” which would lock in data centers and other large-load consumers into long-term contracts and require them to pay for any upgrades needed to connect them to the electric grid. The tariff, Duke said, was intended to shield ordinary consumers from having to pay for the energy costs associated with data centers.
However, Robbins pointed out that the proposed tariff doesn’t cover the cost of new power generation, only upgrades to the electric grid.
“These two plants (in Davie County) would not be built but for data centers,” Robbins said.
“The rest of us, we will be paying for data center generation in the form of these large combined cycles.”
This article first appeared on Carolina Public Press and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License. 