Duke Energy Progress has agreed to shrink its proposed rate increase for customers across eastern North Carolina and the Asheville area, cutting its original ask from a 15.1% hike over two years down to 9.3%. Under the deal, residential customers will still pay $9.62 more per month starting in January, with an additional $5.89 monthly increase kicking in come January 2028.
The settlement, filed August 5 with state regulators, was reached between Duke Energy Progress, the North Carolina Public Staff, and other stakeholders, according to the News & Observer. It promises Duke Energy Progress up to a 9.8% return on equity, down from the utility's initial request of 10.95%. The company originally proposed the steeper 15.1% bill increase in November 2025, citing heavy grid investment and capital costs, part of a broader financial picture that includes Duke Energy reporting $5 billion in profits for 2025 and more than $1 billion in second-quarter net income this year.
How the Numbers Got Smaller
Several financial mechanics account for the reduced ask. The settlement extends the amortization schedule for deferred coal ash cleanup costs from five years to eight, and it triples the flow-back of federal production tax credits to customers, from $40 million to $120 million annually in 2027 and 2028, according to the settlement terms reported by Barchart. Duke Energy shareholders also committed $10 million toward low-income bill assistance and weatherization programs in North Carolina, adding to a separate $10 million shareholder pledge tied to the Duke Energy Carolinas settlement reached in July.
The settlement also trims what ratepayers fund on the corporate side. It cuts 75% of expenses tied to Duke's five highest-paid executives, 50% of board of directors expenses, and 50% of aviation expenses from rate-case funding, per the News & Observer's reporting. The deal further requires refunds to customers for delayed new construction projects.
State Officials Split on the Deal
Not everyone is satisfied with the reduced number. North Carolina Attorney General Jeff Jackson's office does not support the scaled-back Duke Energy Progress plan, according to the same News & Observer report. Jackson filed formal testimony in July opposing the utility's original 15.1% request, arguing per the North Carolina Department of Justice that state experts found Duke could complete necessary grid investments while saving consumers roughly $960 million. He has also called on Duke to lower its return on equity request to 7.4%.
Governor Josh Stein similarly opposed Duke's rate hike proposals earlier this year, urging regulators to establish a mandatory large load tariff so that data center operators help cover grid infrastructure costs rather than shifting the burden to residential customers, as reported by Port City Daily. Sue Sturgis said Duke cannot simply request what it wants and get it from the Utilities Commission, underscoring the pushback the company has faced this year. The sister case for Duke Energy Carolinas, covering the western part of the state, was separately lowered to a 9.5% increase over two years this past July.
Data Centers Loom Over the Rate Fight
Running alongside the rate case is an unresolved fight over how much AI data centers and other massive electricity users should pay toward grid expansion. Bill Norton said Duke Energy has had constructive discussions about a potential large load tariff, and that large load customers would pay their own service costs while contributing additional revenue that lowers costs for other customers. Industrial trade groups, environmental groups, data center operators and the North Carolina Public Staff have agreed they do not oppose further discussion of such a tariff, according to the News & Observer.
Microsoft has moved to open a Utilities Commission case concerning a large load tariff, following a June filing in which the company backed the Public Staff's call for urgent action, according to Canary Media. Consumer and environmental groups have proposed requiring industrial customers with 25 megawatts or more of demand to cover at least 85% of projected usage over a minimum 20-year contract, per the same outlet's reporting. Duke plans to ask stakeholders to submit large load tariff proposals by August 17, share summaries of those proposals by August 28, seek comments by September 11, and collect reply comments by September 25 — all before the January 1 merger deadline that hearings must accommodate.
What Happens Next
The North Carolina Utilities Commission will begin questioning expert witnesses about the Duke Energy Progress case starting Tuesday, and a decision is expected in fall 2026, per the News & Observer. The proposal is not yet final. Duke Energy Progress and Duke Energy Carolinas are set to merge into a single combined utility by January 1, 2027, a consolidation federal regulators approved and that the company estimates will yield $2.3 billion in customer savings between 2027 and 2040, according to Power Systems Technology.
Duke Energy Progress currently serves roughly 1.5 million residential, commercial, and industrial accounts across 69 counties in central and eastern North Carolina and the Asheville area, part of the company's approximately 3.8 million total customers statewide. The North Carolina legislature and state treasurer choose some members of the Utilities Commission, and upcoming elections this November could shape the commission's composition going forward. The rate fight also follows a NC court ruling against Duke in February, when the Court of Appeals found the commission had improperly let Duke recoup nearly $1 billion in 2022 fuel costs, though a state law update blocked any customer refunds.
