AG Jeff Jackson says Duke Energy should lower rate hike and earn less profit
Attorney General Jeff Jackson is urging state regulators to slash Duke Energy Carolinas’ proposed rate increase, arguing the utility’s request would cost North Carolina customers nearly $1.4 billion more than necessary over the next two years.
The filing, submitted to the North Carolina Utilities Commission as part of Duke Energy Carolinas’ ongoing rate case, marks the latest push by state officials to challenge the utility’s request to raise residential electric rates. Jackson and Gov. Josh Stein have previously opposed the proposal, arguing additional increases would tighten family budgets already strained by growing housing, grocery and utility costs.
“This proposed increase is too high for families, and it’s more than Duke needs to meet our growing demand for energy,” Jackson said in a news release Monday. “We can bring that number way down, save families money, and still build everything we need to keep up with growth. That’s what I’m fighting for.”
In testimony filed Friday, attorneys and consultants representing the Department of Justice argued Duke should not be allowed to earn the 10.95% return on equity it requested from regulators. Instead, they contend the utility could continue providing reliable service while earning a 7.4% return. Duke currently earns a 10.1% return on equity.
Jackson’s office estimates the lower return would reduce customer costs by about $1.37 billion over two years, equal to roughly $435 for the average residential customer.
A return on equity is the profit rate regulators allow utilities to earn on investments such as power plants, substations, transmission lines and other infrastructure. Utilities argue those returns are necessary to attract investors and finance major construction projects, while consumer advocates contend excessive returns unnecessarily drive up customer bills.
Duke spokesperson Bill Norton said the company remains confident investments included in its proposal are necessary to serve a rapidly growing state and maintain reliable electric service. He said Duke disagrees with many of the arguments by Jackson and other parties in the case.
“We’ve listened to our customers and know they’re dealing with higher bills across the board – we are carefully reviewing the testimony and evaluating opportunities to refine our request,” Norton said.
Norton pointed to support from the Public Staff, the state agency charged with representing utility customers, for Duke’s proposal to return hundreds of millions of dollars in nuclear, solar and hydroelectric tax credits to customers.
Duke’s profit + data centers
The disagreement over return on equity is one of the central concerns customer advocates and ratepayers have in the case.
Daniel Cassara, energy expert witness for Jackson’s Office, testified Duke Energy Carolinas’ reported $2.1 billion in net income and an 11.22% return on equity in 2025. Cassara described the utility as one of the nation’s most profitable electric utilities.
“It strains credulity to believe that hundreds of millions of dollars in additional profits are needed to attract capital and maintain credit for one of the most profitable and well-resourced utilities in the country,” he said.
The testimony also takes aim at how Duke plans to serve rapidly growing electricity demand from data centers and other large energy users.
Jackson argues regulators should require Duke to create a separate rate class for data centers and similar customers. That way the costs associated with serving those facilities are more directly assigned to the companies creating the demand. According to the filing, Duke’s current approach could leave residential customers paying a portion of the costs associated with infrastructure needed to serve large new users.
The issue has become increasingly prominent as North Carolina experiences a boom in data center development and other energy-intensive projects.
Duke has repeatedly pointed to population growth, economic development projects and planned data centers as reasons it expects electricity demand to increase substantially in the coming years. Meeting that demand could require billions of dollars in new investments, including power plants, transmission lines and other grid upgrades, the utility says.
Jackson’s office argues regulators should take a closer look at how those costs are allocated and whether Duke’s projections for future demand are realistic.
“The large load customers currently proposed and under construction represent new loads of unprecedented size that require unprecedented system upgrades to serve,” Justin Brant, an energy expert witness for the attorney general’s office, testified.
Jackson’s office also argues North Carolina could save money if some large customers were allowed to generate more of their own electricity rather than relying entirely on utility-owned generation and infrastructure.
Duke, however, argues large energy users such as data centers not only cover the costs required to serve them but also provide benefits for other ratepayers. The company said its analysis shows those customers will generate billions of dollars in benefits for other customers over time and reduce residential bills.
“We appreciate that the Attorney General and others are actively engaged on this important policy question, and we will carefully evaluate the specific proposals filed in the rate review docket,” Norton said.
Duke already under scrutiny
The testimony comes as Duke faces increasing scrutiny over electricity costs.
Earlier this year, tens of thousands of customers signed an online petition calling for an independent audit of Duke Energy after many households reported unusually high winter power bills. The company attributed those increases largely to colder-than-normal temperatures and higher electricity usage for heating.
During hearings held across North Carolina, residents told regulators additional increases could force difficult decisions involving groceries, medical care, transportation and housing costs. Others questioned whether residential customers are being asked to shoulder too much of the cost of North Carolina’s rapidly expanding energy system.
The Utilities Commission will begin an evidentiary hearing in the case July 7 before deciding later this year whether to approve, modify or reject Duke’s request. If approved, new rates would begin taking effect Jan. 1.
