T-Bone, a very vocal pig, rooted around the grass outside Sheila Sherrick's home in Lee County in early March. She'd discovered a pile of corn and found it more enticing than the metal trowel of corn that Sherrick was using to lure her back into her pen.
"She's stubborn," Sherrick said.
T-Bone oinked.
Sherrick's home is about half a mile away from the Deep River and seven miles downstream from Butler Well No. 3, a natural gas reserve that, like the rest of North Carolina, has never been fracked. That could change as data center developers get increasingly creative about powering their energy-hungry servers.
Deep River Data, a company with ties to cryptomining, has expressed interest in fracking this area for natural gas to power data centers, according to reporting by Inside Climate News.
Sherrick worries about the impact this will have on her groundwater and her energy bills.
"We'd be sitting in the dark if it goes up any higher," Sherrick said, who lives with her two youngest children on a fixed income.
It's a common refrain on the frontline of the data center boom. Most data centers aren't going to mine their own fuel — even Deep River Data's project would likely purchase some power from utilities.
And these data centers need a lot of power.
A single data center can require as much energy as an entire power plant produces in a year, notes a report by the Electric Power Research Institute. North Carolina's largest utility has proposed the country's most ambitious capital plan to meet the projected demand from these power-hungry facilities.
Duke Energy tracks the energy needs of incoming businesses — only about a third of those projects are data centers, yet they account for 80% of the projected demand from new economic growth in North Carolina.
That raises the question: Who's paying for all that power?
'You asked for 100, we built 100'
When it comes to ensuring data centers pay their way, many utilities across the country are instituting something known as a large-load tariff, according to Jeremy Fisher, the Sierra Club's principal advisor for climate and energy.
"A large-load tariff is a blanket requirement and agreement that says any customer coming into our system above a certain threshold of size ... needs to both meet these criteria and abide by these contract terms," Fisher said.
Basically, a tariff ensures that the utility doesn't build more than it needs and uses what it ultimately builds.
Dominion Energy's Vice President of Regulatory Affairs Scott Castle gives an example for a 100 megawatt data center:
"You asked for 100 (megawatts), we built 100 worth of infrastructure. You're going to pay the greater of your either metered usage or 85% of your contracted capacity," Castle said.
That means the data center would always pay at least 85% of what it asked for.
If North Carolina implemented a similar large-load tariff, energy rates could go down as construction costs are spread over a larger rate base — provided that rates are set equitably. Last October, state regulators held a technical conference, during which Duke Energy pushed back against adding new tariffs, arguing that existing rate schedules already allocate those costs.
"Our fear is basically that that makes sense in principle, but that that's not going to play out, in fact, in the way that our rates are currently structured," said Nick Jimenez, a senior attorney with the Southern Environmental Law Center.
That's partly because right now, industrial customers are treated equally — regardless of how long they run their facilities. Many data centers want power nearly 24/7, an inflexible demand that imposes different restrictions on grid operators than facilities that can shift their load during peak times.
"If we get the cost allocation right, there is an argument that these large-load customers could help bring down rates for everybody, but it won't just happen," Jimenez said.
Duke Energy spokesperson Bill Norton said data centers could, in theory, pay for a bigger, more reliable grid. The utility is currently negotiating its 2025 resource plan with state regulators. While a high-demand scenario — one in which the data centers arrive, thrive, and buy up a bunch of power — would drive down costs for Duke's ambitious capital plan, the inverse is also true:
"If those data centers were not realized, you have less economic development, costs actually go up for implementing the plan," Norton said.
In this 6-part series, BPR, the NC Newsroom, WFAE, and WUNC explore North Carolina's accelerating data-center boom and its real impact on local communities.
Through on-the-ground reporting, document reviews, and conversations with residents, the series examines how Big Tech is reshaping small towns, consuming vast amounts of power, and striking deals that aren't always clear. It explores who benefits, who bears the cost, and why North Carolina has become an appealing target for server farms despite modest public scrutiny. By following the money, the energy demands, and the promises made to communities, the project aims to reveal what's at stake as the cloud moves into the state’s backroads.
In lieu of a tariff, Duke Energy has a boilerplate contract it sends to large customers, such as data centers. Norton said it includes many of the hallmarks of a large-load tariff, such as a minimum contract length and penalties for ducking out early.
But it's not a state-regulated tariff, and some energy experts worry that this leaves the door open for a reverse Field of Dreams scenario: what if we build it, and they don't come?
Data centers are fueling a changing energy mix
Utilities have many tools in their toolbox to tackle incremental load growth. They can upgrade the state's transmission, which would build a more efficient, resilient highway for electrons to travel along. A utility can implement demand-side management, incentivizing customers to curb demand during peak hours, such as a toasty summer afternoon.
Duke Energy already does some of this. The utility's PowerPair program gives customers money toward home solar and battery systems, which helps the utility reduce residential energy demand when the grid is stressed.
But a large, inflexible load, such as a data center, limits the utility's options. Duke Energy is falling back on fossil fuels to meet that projected surge in demand. During the 2023 resource planning proceedings, Duke Energy proposed building nearly 9,000 megawatts of new natural gas generation by the early 2030s. The utility has asked, in recent filings, to increase natural gas use over the next decade and to delay the retirement of coal plants.
"That gas plant is getting rate-based to everybody when it's really being caused by this small set of customers," Jimenez said.
A utility's rate base equals the value of its property plus the rate of return its owed on the investment. What Jimenez is talking about is cost causation, or allocating the rate base to the customer classes that benefit from that asset. It's the reason why residential energy rates are substantially higher than industrial rates. Renters and homeowners pay for the infrastructure that moves electrons from that energy highway into their neighborhoods — investments that don't benefit wholesale customers.
"Distribution upgrades, largely, frankly, driven by climate-driven disasters, have been the driver of rate increases from here to California," Jimenez said.
According to a Duke Energy spokesperson, the majority of the utility's current rate hike request covers grid investments, such as steel transmission poles along the Swannanoa River and new outage-reduction measures. Energy distribution makes up nearly 40% of the rate hikes — a cost that doesn't apply to wholesale customers who connect more directly to the grid.
"You're seeing the cost causation argument there: 'We don't really use the distribution system, so we shouldn't need to pay for it.' That's fair enough," Jimenez said. "But that same principle applies to these gas plants that they've triggered."
Some experts also worry that an increased reliance on natural gas puts ratepayers on the hook for volatile fuel prices.
"Even if the data center or large load customer is paying for all of the costs of a, say, gas plant, the overall utility is now more heavily exposed to fuel cost risk," Fisher said.
Hitting the pause button
While state regulators deliberate, residents are pumping the brakes on new development. In mid-March, Sherrick and over 100 other Lee County neighbors packed Sanford's McSwain Center to address their county commissioners.
"We need to vote for what's right for the community. The community we all live in, the community that you live in," Sherrick said. "So, please, consider a moratorium. Thank you."
The commission voted to start drafting language on a moratorium that would give the county time to ensure Sherrick and her neighbors aren't footing the bill for new data centers.