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A new state law seeks to ensure that ratepayers at large aren\u2019t handed the tab for utilities\u2019 data centers required to serve the boom in artificial intelligence. Credit: Del Harper \/ Shutterstock<\/p>\nA new state law seeks to ensure that ratepayers at large aren\u2019t handed the tab for utilities\u2019 data centers required to serve the boom in artificial intelligence. Credit: Del Harper \/ Shutterstock<\/p>\n
One of the country\u2019s largest energy holding companies is probing just how closely Florida will regulate data centers and the massive costs they could pass down to electric customers, in a key first test of what advocates have called a \u201chistoric\u201d consumer protection law<\/a>.\u00a0<\/p>\n The case before Florida\u2019s Public Service Commission is weighing whether Duke Energy plans to do enough to shield customers from the costs of data centers \u2013 probing how state regulators will enforce a law intended to ensure that the energy-intensive facilities and not regular ratepayers are the ones covering the data center costs.\u00a0<\/p>\n Duke was the first investor-owned utility to submit a proposal under the new Florida legislation known as Senate Bill 484<\/a>, which went into effect last month, giving the PSC the chance to set guardrails for massive electric consumers known as large load customers.<\/p>\n \u201cHopefully out of all of this we will get a template for what does meet the requirements,\u201d said Walt Trierweiler, the statutorily authorized consumer advocate for Florida\u2019s millions of public utility customers.\u00a0<\/p>\n \u201cWhat does prevent the cost-shifting from data centers to the current body of ratepayers? And what protects those customers from subsidizing loads that don\u2019t show up?\u201d he added.<\/p>\n Data centers have become a political lightning rod across the country, galvanizing a bipartisan outpouring of opposition from residents alarmed by the sheer scale of the energy and water needed to run the facilities, which are used to power artificial intelligence and cloud computing. In calls with investors, utility company executives<\/a> have touted the state as a prime market for data center expansion, with Duke anticipating billions of dollars<\/a> in new investments in Florida and Indiana over the next five years, driven by the data center boom.<\/p>\n Under SB 484, public utilities must \u201creasonably ensure that each large load customer bears its own full cost of service and that such cost is not shifted to the general body of ratepayers.\u201d That cost of service includes: connection, operations, and maintenance expenses, incremental transmission, incremental generation, and other infrastructure costs, and \u201cany other costs required to serve a large load customer.\u201d\u00a0<\/p>\n The PSC, which regulates public utilities, heard about five hours of testimony Tuesday from utility representatives and expert witnesses, with commissioners largely remaining mum on Duke\u2019s proposal for how to support large load consumers. The board did not take a formal vote, although a written order is expected after the parties submit post-hearing briefs.\u00a0<\/p>\n Some commissioners had previously voiced concerns about the plan, with one saying Duke appeared to be on \u201creal shaky ground,\u201d and another \u2013 a former legislator \u2013 saying the proposal doesn\u2019t comply with the new law.\u00a0\u00a0<\/p>\n \u201cIn my view, the petition appears facially noncompliant with the mandatory statutory requirements of Senate Bill 484 and falls outside the intended scope of the mechanism contemplated under Senate Bill 484,\u201d Commissioner Mike La Rosa wrote in an order issued by the panel.<\/p>\n Attorneys for Duke have defended the proposal, saying its consumer protections ensure large load consumers will bear their full cost of service.\u00a0<\/p>\n \u201c[Duke Energy Florida\u2019s] proposal protects customers today, preserves the commission\u2019s authority tomorrow, and satisfies the Legislature\u2019s directive,\u201d said Dianne Triplett, an attorney for Duke.<\/p>\n Duke does not currently have any large load data center customers, though the utility is slated to power what could become the state\u2019s first hyperscale facility, in Fort Meade<\/a>, though that project faces further regulatory hurdles before it\u2019s officially greenlit.<\/p>\n While Duke\u2019s large load proposal sets a minimum 20-year contract term, minimum monthly bill provisions, and mandatory fees for early termination of contracts, the plan did not set specific new rates for large load customers like data centers, which advocates argued was a violation of the state law.\u00a0<\/p>\n In Trierweiler\u2019s view, Duke\u2019s proposal \u201cdoesn\u2019t attempt to comply with the most basic provisions of SB 484,\u201d and leaves the commission \u2013 and customers \u2013 in the dark about the full projected costs of data centers, which can consume as much energy as a city<\/a>.<\/p>\n \u201cThe potential for prosperity, economic development that uplifts the small, rural communities where they target these data centers is great. However, the converse is also great,\u201d Trierweiler said. \u201cThe risk of devastating economic loss in subsidization is huge should any one of these data centers fail to materialize, or fail to be used throughout its life.\u201d<\/p>\n Attorneys for Duke have maintained that the company wouldn\u2019t be able to set new rates for large loads now because of the terms of its current PSC-approved rate agreement, which runs through the end of 2027. At that point, Duke said, it would be able to set new rates for large loads, with far more information about what the actual needs of the massive customers would be.\u00a0<\/p>\n \u201cWe have committed to filing a large load customer rate at a future rate proceeding, supported by a complete cost-of-service study. At that time, all parties, including the commission, will have the full opportunity to address cost allocation, rate design and cost recovery on the complete evidentiary record,\u201d Triplett said.<\/p>\n But consumer advocates found those claims unpersuasive. A staff attorney for the PSC also pointed to a provision in Duke\u2019s current rate agreement stating that the company can recoup costs if it has to make changes to comply with new government regulations.<\/p>\n Backgrounding all the legal arguments and technical jargon are Floridians\u2019 concerns that the artificial intelligence and data-center booms could go bust, leaving regular ratepayers on the hook if state regulators don\u2019t adequately enforce consumer protections.<\/p>\n \u201cIf there is a bubble and it bursts, the general body of customers will be left holding the bag for billions and billions of dollars in infrastructure,\u201d said attorney Bradley Marshall, representing the advocacy group Florida Rising, which is challenging Duke\u2019s proposal. \u201cThis is a case of first impression and the commission must get this right.\u201d<\/p>\n Kate Payne is The Florida Trib\u2019s state government reporter. She can be reached at [email\u00a0protected]<\/a>.<\/p>\n This article<\/a> first appeared on The Florida Trib<\/a> and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License<\/a>.![](\"https:\/\/www.newsbeep.com\/us-fl\/wp-content\/uploads\/2026\/09\/cropped-FlTrib_favicon.png\")
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