Duke Energy’s Rate Hike Is a Landlord Problem, Not Just a Utility Story

Duke Energy wants to raise residential electric rates by roughly 18% over the next two years, which would add about $34 a month to the average North Carolina household bill by 2028. The company says rising demand, infrastructure upgrades, and grid hardening justify the increase. What they are not emphasizing is that residential bills in this state are already up approximately 22% since 2020, well before the current geopolitical pressures that now dominate the headlines. If you own rental property in the Carolinas, this is not background noise. It is a direct cost pressure on your residents and, in many cases, on your property if utilities are included in the rent.

The Rate Hike Timeline Does Not Match the Excuse

The current framing in a lot of news coverage ties the utility cost surge to the war in Iran and its effect on energy prices. That may be contributing to near-term pressure, but it does not explain what was already happening. North Carolina residential electric bills climbed 22% between 2020 and 2024, a period well before the current conflict. Nationally, residential electricity prices rose 6.1% between August 2024 and August 2025 alone, more than double the rate of general inflation over the same period, according to data analyzed by the National Energy Assistance Directors Association. The cause was not a single geopolitical event. It was a combination of high interest rates driving up the cost of financing new power plants, reduced federal clean energy incentives, aging infrastructure, and rising natural gas costs for generation.

Duke Energy reported $4.4 billion in net profits last year and $1.4 billion in a single quarter, up 11% year-over-year. The company is now seeking to increase its allowed return on equity above the current approved rate of 10.1% for Duke Energy Carolinas, which is already above the national utility average of 9.75%. This is the context in which over 71,000 North Carolina residents have signed a petition demanding an independent audit of billing practices. Governor Josh Stein and Attorney General Jeff Jackson have both formally opposed the rate increase request.

Who Is Actually Paying for the Data Center Boom

Here is the piece of this story that should concern every average ratepayer in North Carolina. The state is experiencing explosive growth in data center development, driven by the same tech giants that have been publicly pressured to secure their own power. In response to that pressure, North Carolina quietly passed Senate Bill 266 this past summer. Under the revised structure, residential customers could shoulder a greater share of fuel and purchased power costs, while large commercial customers pay proportionally less. A state task force studying the issue has heard from other states facing the same dynamic. Indiana, for example, enacted rules requiring large users to cover the majority of costs for new generation built specifically to serve them. North Carolina has not done the same.

The practical result is that when Google or Meta or any major data center operator needs 500 megawatts of new capacity, the infrastructure to build that capacity gets financed in part by the residential customer base. The tech companies get the power. The households in Raleigh, Charlotte, and Wilmington get the bill. Duke has warned that electricity demand from data centers, manufacturing, and electrification could grow far faster than previously forecast. The question regulators have not fully answered is who pays for growth and whether it should be the people growing or the people who were already there.

What This Means for Property Owners in the Carolinas

If your leases pass utilities through to residents directly, the near-term impact is primarily on resident affordability and, by extension, on their ability to pay rent on time and renew. A household already stretched thin absorbs a $34 monthly utility increase the same way it absorbs any unexpected cost: by cutting something else. That creates downstream risk for property owners, particularly in working-class and middle-income rent bands. This is not abstract. North Carolina has the second-highest number of utility disconnections in the country among reporting states, surpassed only by California. Between 2019 and 2024, more than 6.75 million disconnections occurred in this state. These are not numbers that exist independently of the rental market.

For property owners who bundle utilities into rent, the exposure is more direct. Flat-rate utility arrangements made sense when power costs were stable. In a market where residential electricity is rising at twice the rate of general inflation, that math deserves a hard look at every lease renewal. If you have not adjusted utility allowances or converted to pass-through arrangements in the last two to three years, you are likely absorbing losses that were not part of your original underwriting assumptions.

The Only Leverage Residents Have Is Organized

Duke Energy is a regulated monopoly. You cannot take your business elsewhere. The North Carolina Utilities Commission has the authority to reject, modify, or approve rate increases, but it does so in a process that is heavily influenced by what it hears from the public. The current schedule includes public hearings continuing through spring 2026, with a commission decision expected in fall 2026 and new rates potentially taking effect January 2027. That window is open now. The 71,000-person petition, the governor’s statement, the attorney general’s formal intervention, these are meaningful inputs into a regulatory process that is not a foregone conclusion.

Individual customers cannot outbid Google for power plant capacity. That is simply true. But the regulatory structure exists precisely because monopoly utilities are supposed to serve the public interest, not maximize returns to investors at the public’s expense. When Duke reports $4.4 billion in annual profit and simultaneously requests permission to raise rates while also seeking above-average return on equity, the argument that this is about serving customers rather than enriching shareholders becomes difficult to sustain. The rate case process is the mechanism designed to test exactly that argument. It only works if people show up.

The Practical Steps

For property owners, the near-term actions are straightforward. Review every lease that includes utilities and understand your exposure at current and projected rates. If you have residents whose affordability is already marginal, this is one more data point in a decision about renewal terms and pricing. If you manage properties in the $1,200 to $1,800 monthly range, where residents already face the tightest affordability squeeze, a $34 utility increase is not trivial relative to their monthly budget.

For the rate case itself, the public comment window is active and the commission does read what it receives. The next public hearing in the Charlotte area is scheduled for April 29. Written comments can be submitted to the NC Utilities Commission directly. This is not a situation where individual participation is futile. The regulatory record matters and the commission’s job, legally, is to find rates that are just and reasonable. Whether this increase clears that bar is genuinely in question, and the process is still open.

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