Regulators' own staff says deny Duke's data center plan as filed

Staff says the plan falls short of the new law

The Florida Public Service Commission's staff, its own economists, engineers and lawyers, says Duke Energy Florida's data center plan should be denied as filed. A new state law says data centers and other giant power users must pay their full cost. That cost must not land on the two million customers Duke already serves. Staff would let Duke fix the plan and file it again.

The story so far: On April 22, Duke asked regulators to approve its terms for serving giant power users, saying they meet the new law. The law took effect July 1. The commission refused to throw out Duke's request, and it heard the case Aug. 25.

Why it matters: Duke testified it can serve only one such customer, of 55 megawatts, before the end of 2027. That is when its 2024 rate settlement, which freezes its base rates, runs out. A megawatt measures how much power a site draws at once, and the law calls a customer whose expected peak use reaches 50 megawatts a large user. Thirteen would-be customers have asked Duke to study what connecting them would take, Duke says, and the smallest wants 160 megawatts. So staff says Duke would likely need more power plant capacity.

What's new: Staff filed its recommendation Oct. 22. It would let Duke refile, and it lays out a path to approval if the commissioners disagree with its main finding.

What's next: The five commissioners take it up Nov. 3, and the written order is due Nov. 23.

Who's who

Duke Energy Florida supplies electricity to two million customers in Florida. The Florida Public Service Commission is the five-member state board that regulates power companies: Chairman Gabriella Passidomo Smith and Commissioners Gary F. Clark, Mike La Rosa, Bobby Payne and Ana Ortega. Its staff are the commission's own economists, engineers and lawyers. The Office of Public Counsel is the state office that represents utility customers. Florida Rising is a group that intervened against Duke's plan.

What staff found

Staff recommends denying Duke's proposed terms as filed, with leave to refile, on two grounds. First, the terms leave out customers who meet the law's definition of a large user but do not ask for firm service. Second, Duke has not adequately shown that its existing rates and its proposed protections "reasonably ensure" each large user bears its own full cost.

Duke relies on its 2024 rate settlement, which freezes base rates through 2027. Staff wrote: "DEF cannot rely on the settlement as a reason to defer an otherwise necessary rate modification until 2028." It added that "the rate freeze only addresses half of the statute," and that "No evidence was provided by the utility to establish that these rates affirmatively cover the cost of serving each large load customer."

Staff also found that one clause, which lets Duke negotiate "non-material" terms the plan never defines, does not comply with a separate state law. Customers could get service on terms the commission never approved, staff wrote.

"This docket is a case of first impression," staff wrote. The law "went into effect on July 1, 2026, and has never been interpreted by the Commission."

What the plan would do

Duke's plan covers customers forecast to use 50 megawatts or more at one site. Large users already on its system at the end of 2025 would be exempt; staff says one that raises its peak load should lose the exemption. New users would pay a $150,000 study fee up front, which they cannot get back, and the full estimated cost of connecting them.

No new rate is on the table. Staff wrote that "no rates are at issue in this proceeding": large users would go on Duke's existing general service rate schedules. Duke chose to wait to create a new rate class until its 2027 rate case.

Thirteen customers above 50 megawatts have asked Duke for system studies, and the smallest asks for 160 megawatts, Duke said in discovery. Staff says Duke's own analysis shows its substations and lines can absorb up to 200 megawatts of new load. Above that, upgrades are needed that the plan's connection charges do not cover, staff wrote.

Duke said it had been approached by data center companies about sites of up to 1,400 megawatts, the Tampa Bay Times reported. The Times wrote that would be among the biggest in the world. A Duke executive said none had signed an agreement.

If the commissioners disagree

Staff offers an alternative. If the commission finds that Duke's existing rates and protections meet the law's full-cost and no-shifting rules, it could approve the cost framework. Duke would still have to widen the plan to every customer the law covers.

Only on that path does staff list three more changes. It would drop the word "firm," base a customer's security deposit on two months of minimum bills and let Duke make only purely administrative changes without commission review.

Who stands where

Duke says its terms are fair "because they establish rates large load customers can take service under now, while the existing settlement ensures no rate increase to existing customers." It asks the commission to record its commitment to file a new large-user rate for Jan. 1, 2028.

On rebuttal, a Duke witness testified that if existing rates fall short before then, "those costs will fall to the bottom line and be borne by DEF shareholders." Staff wrote that this "provides protection to the general body of ratepayers." But it added that "shareholder absorption of a shortfall does not itself demonstrate that the large load customer pays its full cost."

The Office of Public Counsel argues that serving large users on existing rates "would give those customers undue or unreasonable preference or advantage." Florida Rising argues that Duke's plan forces ordinary ratepayers "to subsidize large load customer costs." Three big industrial users, the Florida Industrial Power Users Group, Nucor Steel Florida and PCS Phosphate, say Duke's filing complies with the law.

By Oct. 20 the commission had received more than 4,400 consumer comments in the case.

Their side

Duke spokesperson Ana Gibbs said in August that if a large user's revenue did not cover its costs before 2028, "that gap will fall to shareholders, not existing customers." She said: "Our company is committed to filing a new (large load) rate to be effective by January 1, 2028." Commissioner Gary Clark earlier told Duke its proposal was on "real shaky ground," the Tampa Bay Times reported. Duke has not responded to the staff recommendation in anything we read.

What's next

The commission takes up the case at its Nov. 3 conference. First comes a motion by the Office of Public Counsel to reconsider letting the industrial users' group take part, which staff says should be denied. Then comes the decision on Duke's plan. All five commissioners are assigned. The written order is due Nov. 23.

Sources we read

Florida Public Service Commission: staff recommendation in docket 20260064-EI, filed Oct. 22 (Document No. 07477-2026) and its agenda version; the Nov. 3 conference agenda; the docket schedule, revised Oct. 20; the commission letterhead (Document No. 07482-2026). State Affairs Pro, Oct. 22, by Jim Saunders. Tampa Bay Times via Yahoo Finance, Aug. 26. WUSF, Aug. 25. FOX 35 Orlando, Nov. 5, 2025. OFM's earlier story on the commissioners' retreat and this vote, Oct. 21.