LAS VEGAS — Harry Sideris is little more than a year into his role as CEO of Duke Energy, one of the nation’s largest investor-owned utilities.
The 30-year company veteran has set a frenetic pace during that time, as he steers the utility through an unprecedented surge in demand growth and increasing public and political pressure over rising utility bills. Duke Energy claims the industry’s largest capital plan, with $103 billion in expected investments over the next five years, including the addition of 14 gigawatts of new electric generation.
In an interview Tuesday, Sideris said the investments are necessary to meet rising power demand from fast-growing Southeast economies, new manufacturing plants and, of course, data centers. Duke has signed electric service agreements with data center customers representing 7.6 GW of demand, he said, with 15 GW in the “late stage pipeline.”
“We’re really focused on what’s going to come to fruition over the next 12 months, and really focusing on executing on those” agreements, he said.
Duke has faced blowback over rising bills in the six Southeast and Midwest states where it supplies electricity to 10 million customers. In its home state of North Carolina, Gov. Josh Stein (D) has criticized the utility for seeking to pass on to customers $800 million in fuel costs at the same time it seeks an electric rate increase.
Sideris said the utility’s electric rates are below the national average and rising at a pace slower than inflation. He also pointed to the company’s plans to cut costs by $5 billion through the sale of federal energy tax credits and the merging of its utilities in the Carolinas.
POLITICO’s E&E News sat down with Sideris on the sidelines of the Edison Electric Institute’s annual conference to discuss data center demand, rising grid costs and the future of clean energy.
This interview has been edited for length and clarity.
You’ve been CEO for a little over a year at a very extraordinary time for the industry. What’s been the biggest challenge so far?
I’ve done almost every job in the company — 20 different roles in 30 years — so nothing surprises me in terms of the business. But it’s the external environment, how fast things are moving. We went from just a few years ago 0 to 0.5 percent load growth to 5 percent load growth, 10 times that. We were always good at planning, and we planned like 10 years out. Now it seems like every time we plan, we have to re-plan by the time it comes off the printer. It’s a little bit different pace than we’ve had in the past.
In terms of the demand growth from data centers, what was the moment when you said, “OK, we’re entering a new era for the electric power industry?”
It was a few years ago when we started getting all these requests. They go to different people in the company. But somebody decided to aggregate them, and it’s like, “Oh, my goodness, this is a lot.” Doing that really brought to light what the challenge was.
Your company’s $103 billion capital spending plan over the next five years is 63 percent higher than five years ago. Is the increase just data centers?
A lot of it is large loads, but it’s also [population growth] in our service territories. We’re blessed to serve some of the fastest-growing areas. South Carolina is the fastest-growing state. Charlotte [in North Carolina] is the fastest-growing city — 157 people move there every day. So we have a lot of population migration from up north. Indiana is seeing population growth. We’re also seeing other manufacturing electrification. We’re also continuing [grid] hardening and resiliency work. Over the last decade, we’ve seen a lot more storms and a lot more impactful storms, so we really focused on using data to make sure that we’re addressing and building a resilient system [in regions] prone for hurricanes, replacing wooden poles with concrete steel poles that just helps the system survive.
Much of the new generation you’re adding is natural gas. Is there a point at which fuel price risk becomes a concern, where you become overleveraged on gas?
We model that in all the data. We use every source we can get our hands on. [It] shows that, you know, the country has plenty of gas, there’s plenty of people extracting it. So I think the prices for the foreseeable future are pretty constant. You’ll have your short-term spikes when winter weather or something happens, but those are anomalies. It’s been pretty consistent. Everybody was worried about the Iranian war, and actually natural gas prices have gone down because we’re producing so much oil and gas as a byproduct.
Can you still hit net zero in 2050 with all the demand growth you’re seeing and all the new generation that’s required to meet that growth?
That’s still our aspiration. We’ve always said that, you know, we’re going to focus on reliability, affordability and increasingly clean [energy]. When we looked at the original plans for that, we knew it wasn’t going to be linear. We also didn’t have the load growth that we have now, right? But we’re very proud of the progress we’ve made so far. We’re at 43 percent carbon reduction [compared to 2005], and we run the largest nuclear fleet in the regulated space, that’s carbon-free. We’re looking at getting more megawatts out of [nuclear plants], we’re looking at extending the licenses of those, so they can run an additional 20 years. We’re investing in solar, we’re investing in batteries, and we’ll continue to look for new technologies as well.
