Duke, Amazon Data Center Faces Challenges Over Environmental Concerns
Over the past two Fridays, Amazon’s data center in Richmond County and Duke Energy’s dirty Smith Energy Complex gas plant—that will ultimately be used to power it—both faced setbacks.
First, the North Carolina Utilities Commission (NCUC) denied Duke’s application to add a sixth fossil gas turbine to the Smith Energy Complex, which already has five. The NCUC said that Duke had not yet demonstrated that the power was needed or that the cost of providing power for data centers would not be passed to other ratepayers.
The NCUC is currently evaluating Duke’s projected growth in the coming years as part of the biennial Carbon Plan process. In that process, Duke projects 70% of its growth will come from data centers. The commissioners found that Duke failed to prove that the new turbine is necessary until they fully evaluate Duke’s projected growth.
Additionally, the NCUC cited Duke’s recent pledge to not pass the cost of powering data centers onto residential customers. Finally, the NCUC determined Duke failed to offer “sufficient evidence” to allow commissioners to evaluate whether other power sources, including grid modernization, energy storage, and efficiency, “would establish or maintain a more cost-effective and reliable generation system.”
Duke Profits No Matter What
Under a new state law that allows Duke Energy to charge customers for construction projects before they are completed, Duke’s existing customers would still pay for the expansion even if more data centers do not end up on the grid. The utility also profits from building new infrastructure — it currently has a state-set return on equity of 9.48%, meaning it will earn about that much back from any new capital investments it makes.
“The Commission held today that Duke’s rush to gas to support speculative data center build-out in North Carolina is too rapid and too expensive,” said Will Scott, policy director of the Environmental Defense Fund. “Clearly, Duke’s desire to satisfy short-term demand should not saddle customers with what are, over the long-term, likely to be inefficient, stranded assets.“
Air Permits For Duke and Amazon’s 649 Diesel Generators Challenged
On Friday, the Southern Environmental Law Center (SELC), representing the Richmond County Coalition for Justice and Black Empowerment, challenged minor source air permits for Duke Energy and Amazon to operate 649 highly-polluting diesel-fired generators at a massive, hyperscale data center in Hamlet, North Carolina. The petitions filed in the N.C. Office of Administrative Hearings say that the two permits to operate the generators paid for by Amazon and located on the same Amazon property illegally evade Clean Air Act requirements for the combined air pollution, which poses significant health risks for nearby communities.
“One of the wealthiest companies in the world can and should find ways to limit its harmful pollution of the air we breathe instead of trying to evade the law to power a massive data center,” said Caroline Cress, senior attorney at SELC. “Significant amounts of harmful air pollution from data centers and regulated monopoly utility, Duke Energy, are not welcome additions to North Carolina’s communities.”
Duke, Amazon Trying to Evade Stringent Reviews
NCLCV’s Director of Clean Energy Campaigns Michelle “Meech” Carter testified at the recent hearing where the permits were approved. Carter pointed out that Duke and Amazon are trying to evade more stringent review by applying separately for permits. Duke is applying for 57 diesel-fired non-emergency generators on Amazon’s property to provide primary power for the data center for up to one year, while Amazon is applying for installation and operation of 592 diesel emergency generators. Collectively, the generators will emit massive amounts of air pollution and greenhouse gasses.
Amazon’s plans for the data center include 21 buildings, about 200,000 square feet each, on nearly 800 acres at full buildout. When fully operational, this facility will be Duke Energy’s largest customer. The site in Hamlet, N.C., is across the street from Duke Energy’s Smith Energy Complex gas plant.
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