The North Carolina Utilities Commission decided in September 2023 to reject the $500 million Duke Energy gas plant project, which was designed to provide electricity for a data center being built near Charlotte. The project faced criticism regarding a lack of transparency in construction costs and its impact on consumer bills.
Increase in Natural Gas Production and Consumption in the United States
Natural gas production in the United States is expected to reach its highest levels in 2026 and 2027. According to data from the U.S. Energy Information Administration (EIA), dry gas production will increase from 107.6 billion cubic feet per day in 2025 to 111.7 billion cubic feet per day in 2026 and 115.9 billion cubic feet per day in 2027. Additionally, domestic gas consumption is projected to rise from 91.9 billion cubic feet per day in 2025 to 92.2 billion cubic feet per day in 2026 and 94.3 billion cubic feet per day in 2027.
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Concerns About Consumer Costs
The North Carolina Utilities Commission concluded that Duke Energy failed to adequately demonstrate how consumers would be protected from the construction costs of this project. The commission referred to the Ratepayer Protection Pledge, under which companies are required to cover energy costs and infrastructure related to data centers without increasing prices for consumers. If Duke Energy wishes to reapply for a construction permit, it must provide cost recovery mechanisms in accordance with this agreement.
This decision comes amid rising concerns about increasing energy costs for American consumers. According to a recent Bank of America report, energy service costs for Americans have significantly increased since Trump took office, and this increase has outpaced inflation rates.
Despite the rejection of the project, the United States is currently constructing a record-breaking natural gas pipeline project that is expected to make the country a dominant global producer and supplier of gas. This development is largely related to the rapid construction of data centers across the country. However, the rejection of the Duke Energy project indicates that some U.S. officials are under pressure from consumers to limit developments that do not have clear cost recovery guarantees.
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