Florida utility regulators denied Duke Energy’s proposal for how it would handle the costs of data centers, saying its plan failed to adequately protect consumers from potential hikes to their electric bills as required by a new state law.
Last week’s vote by the state utility board, called the Florida Public Service Commission, was unanimous, making it a striking rebuke of the company.
Gabriella Passidomo Smith, the chairperson of the commission, said she understood Duke’s argument that data centers could lower residents’ electric bills “in theory,” but said that wasn’t enough.
“That theoretical scenario does not address the statute we have before us,” she said.
The commissioners’ staff had also determined Duke’s plan was insufficient and recommended that they deny the proposal. Still, that finding hardly guaranteed the outcome.
The business-friendly commission has defied its own staff before — such as in 2024, when it allowed Tampa Electric to charge residents more so that large corporations could pay less. Last month, two of the commissioners faced criticism for attending an all-expenses-paid utility industry retreat in West Palm Beach.
Duke Energy spokesperson Ana Gibbs said the company appreciated the “careful review” by regulators.
“We remain focused on getting this right for Florida by supporting economic growth and new jobs while protecting customers and ensuring that data centers pay their full cost of service,” Gibbs said in an email.
Consumer advocates celebrated the decision. For months, they’d lambasted Duke’s data center plan, saying it skirted the law and could saddle Floridians with billions of dollars’ worth of bill increases. The exact dollar figure of the potential costs, though, was redacted from public view because of confidentiality requests from Duke.
The state data center law requires regulators to “reasonably ensure” that each data center “bears its own full cost of service and that such cost is not shifted to the general body of ratepayers.” But Duke Energy proposed to largely treat data centers like other large, corporate power users, a class of customers whose bills are already subsidized by residents and small businesses. Duke said it would propose a more data center-specific structure in 2027, when it plans to return to regulators to ask for another hike to base rates on all electric bills.
Bradley Marshall, an attorney representing the affordability group Florida Rising in the case, said the vote was a big win for consumers.
“The commission has sent a strong message to Duke, that Duke has to come forward with a proposal that protects their existing residential and small-business customers,” he told the Tampa Bay Times. “Duke was far off the mark, and we hope that they will come with a real proposal that makes data centers pay the actual cost to serve them.”
Duke will likely file a new petition, though the deadline for that next step is unclear. Asked by the Times, Gibbs did not comment on the timing of any new filings.
This vote was the first big test of the new state data center law, backed by Gov. Ron DeSantis, who signed it earlier this year. He also appointed all five members of the utility board.
The data center issue has shifted the typical dynamics of Florida politics, where top Republican leaders are usually aligned with the interests of the powerful utility industry. But as voters of all political stripes revolted against data centers, particularly in Florida’s rural counties, DeSantis called for the state to enact guardrails to ensure they didn’t drive up residents’ electric bills. That put him at odds with utilities, which have a profit incentive to make their service areas as attractive as possible for the electricity-hungry warehouses.
In explaining their votes, almost all of the utility commissioners cited the new law. Commissioner Mike La Rosa said he went back to reread it “more times than I ever planned to.”
“I’ve double-, triple- and quadruple-checked everything, and I just don’t feel that this meets the standard that the Legislature has set forth,” he said.
Brooke Ward, Florida director for the environmental group Food & Water Watch, said the implications of those remarks were clear.
“The only reason that utility regulators denied Duke’s plans to pass data center costs to families and small businesses is because of legislation preventing them from doing so,” she said in a statement. That makes it a “testament to the importance of laws that put people above corporations.”
Regulators will have to evaluate the law’s requirements again soon, when they weigh in on separate plans submitted by Tampa Electric and Florida Power & Light. Each proposes to handle data centers in different ways.
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