Citing Trump, GOP regulators reject gas plant for Amazon data center

Por Arianna Skibell — POLITICO – TOP Stories

Republican regulators on Friday threw a wrench in Amazon’s plan to power a $10 billion data center project in North Carolina — citing President Donald Trump’s Ratepayer Protection Pledge.

The GOP-controlled North Carolina Utilities Commission rejected a half-billion-dollar natural gas project sought by Duke Energy, the state’s largest utility, to primarily serve a 21-building Amazon facility under construction near Charlotte.

Republican commissioners on the five-member panel said Duke did not adequately demonstrate how consumers would be shielded from paying for the peaker plant. GOP members William Brawley, Tommy Tucker and Donald van der Vaart said Duke failed to explain how it would “adhere to its commitments under the Ratepayer Protection Pledge” — a voluntary agreement brokered by the White House.

The denial comes amid the growing backlash to data centers and artificial intelligence. And it underscores growing skepticism among state regulators towards energy projects designed to meet the facilities’ massive electricity needs.

The 250-megawatt gas project in south-central North Carolina was slated for the existing Smith Energy Complex, home to five other units. The GOP commissioners said if Duke plans to reapply, the utility would need to offer cost recovery mechanisms that comply with the White House’s voluntary agreement.

Duke Energy is one of hundreds of utilities that have signed Trump’s pledge to ensure tech companies — not everyday customers — pay for the massive electricity and grid updates needed for AI data centers.

Duke spokesperson Craig Wilson said the utility was disappointed by the commission’s decision and would assess next steps.

“We believe we have demonstrated that the [project] is part of a least-cost path to maintain reliable and affordable service for customers as energy demand continues to grow across North Carolina,” Wilson said in an email.

A spokesperson for Amazon did not respond to a request for comment.

Of the two Democrats on the panel, one was not present and the other dissented on procedural grounds.

Commissioner Floyd McKissick took issue with his colleagues basing their decision on who would pay for the project — a reference to the invocation of Trump’s ratepayer protection pledge, which is not legally binding.

The commission’s rejection Friday is not permanent, and Duke will have a chance to refile its application. In the meantime, Amazon secured permits from the state’s Department of Environmental Quality to run 57 temporary non-emergency diesel generators for a year while the hyperscale facility connects to the electric grid.

Amazon broke ground on the project last year. The 21-building campus is slated for completion in 2029 or 2030.

In addition to the non-emergency generators, Amazon secured a second permit to run nearly 600 diesel-fired backup generators.

The permits have drawn opposition from the local community in Hamlet, a small town in Richmond County, which already contends with industrial air pollution from other energy projects. During a heated hearing in July attended by nearly 200 people, residents expressed concern over new emissions of fine particulate matter, which is linked to cancer.

“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,” Caroline Cress, senior attorney at the Southern Environmental Law Center, said in a statement.

Commission staff could recall only one other time over the past 35 years that the commission had rejected a Duke natural gas project, said Lucy Edmondson, chief counsel for the commission’s public staff, which represents ratepayers before the panel. A decade ago, the panel greenlit two combined-cycle gas plants but denied a third combustion turbine.

The Republican commissioners also took issue with approving new gas generation before approving Duke’s long-range energy plan, slated for this winter. They likewise said Duke failed to evaluate reasonable alternatives to the plant.

Commissioner van der Vaart, who previously has voiced opposition to solar energy, said Duke had not considered whether a battery storage project would meet power needs more cheaply.

Tucker, another Republican commissioner, said he worried the price tag was too high for a plant that ultimately may not be needed.

“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,” he wrote.

Will Scott, the Environmental Defense Fund’s North Carolina policy director, said he’s never seen the commission deny a project before with that kind of “strong language” about not creating a stranded asset.

“It’s very rare for one of these to be denied,” he said.

Scott noted the commission is in the process of putting a large load tariff in place, which would clearly assign data centers’ energy costs to the operators. But as it stands, the costs of this gas project would be borne by ratepayers.

Fonte: POLITICO – TOP Stories