By Merrilee Gasser, The Center Square
In Summary:
The Florida Public Service Commission heard arguments over Duke Energy Florida’s proposed tariff for large load customers. The case is the first test of Senate Bill 484, which requires large customers such as data centers to bear their own service costs. Consumer advocates say Duke must establish a separate rate schedule, while the utility argues its long-term contracts, financial assurances and minimum monthly bills provide sufficient protections.
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A new Florida law protecting customers from paying the costs of large-load data centers is getting its first test with Duke Energy Florida.
Related: Florida's data center boom sparks bipartisan backlash.
During a hearing this week, the Florida Public Service Commission heard arguments on Duke’s proposed tariff for large load customers.
The proposal responds to Senate Bill 484, which passed the legislature earlier this year, and is the first case to decide how the bill's provisions will play out in practice.
“This is a case of first impression, and the commission must get this right,” said Bradley Marshall with Florida Rising. “We have an affordability crisis in this state, and now we have a new law that quite sensibly requires that data centers pay their full cost of service. Duke’s proposal doesn’t come close and must be rejected.”
The bill requires minimum tariff and service requirements that reasonably ensure each large-load customer bears its own cost of service and that those costs are not shifted to the general body of ratepayers.
All electric investor utilities must file tariffs that comply with the new requirements by October 1, 2026.
While Duke has proposed tariffs, it fell short of proposing a rate schedule for large load customers, which Walt Trierweiler with the Office of Public Counsel said made Duke’s proposal non-compliant.
“DEF’s non-compliant tariff proposal doesn’t attempt to comply with the most basic provisions of SB 484, because Duke claims it doesn’t have to. Because they can’t raise rates in the immediate future because of a settlement agreement. OPC points out that there’s no settlement agreement exclusion or exemption from the statutory requirements,” said Trierweiler.
Dianne Triplett with Duke Energy said their proposal meets the new standards with protections that include a 20-year minimum term, “significant” financial assurances, early termination obligations, monthly minimum bills, and two years’ notice before termination.
“You may hear that you cannot and should not approve the tariff because DEF is not proposing a specific large load rate schedule today,” said Triplett. “You may also hear large cost estimates and allegations that those costs will be imposed on existing customers, but no party has identified a mechanism by which approval of this tariff could increase any customer rates before the end of 2027, which is DEF’s settlement term.”
Duke has plans to file a large load customer rate schedule at a future rate proceeding, Triplett added.
“At that time all parties, including the commission, will have the full opportunity to address cost allocation, rate design, and cost recovery on a complete evidentiary record,” said Triplett.
Marshall said despite Duke’s plans to file new rates for data centers, it would not charge them the incremental costs to serve them. Worse, he said, is the data center boom could bust.
“If there’s a bubble and it bursts, the general body of customers will be left holding the bag for billions and billions of dollars of infrastructure in the form of generation and transmission that it does not need,” said Marshall.
Key Points:
- Senate Bill 484 seeks to prevent data center infrastructure costs from being shifted to other utility customers.
- Duke Energy Florida’s proposal is the first tariff the law has reviewed.
- The Office of Public Counsel argues Duke’s filing is noncompliant because it lacks a separate large load rate schedule.
- Duke says its proposal includes a 20-year minimum term, financial assurances, termination obligations and minimum monthly bills.
- Consumer advocates warn ratepayers could inherit billions of dollars in unnecessary infrastructure costs if the data center boom collapses.
