Consumers bracing for rate hikes from Duke Energy, Duke Carolinas
(The Center Square) – North Carolina regulators will hold a hearing on Duke Energy Progress’ proposed 17.7% rate increase this week, though the company is touting a “significant and positive” partial settlement on some aspects of the request.
A partial settlement between Duke Energy Progress and the North Carolina Public Staff that advocates for ratepayers was filed last week with the North Carolina Public Utilities Commission that addresses cost recovery of historical capital investments, depreciation for coal plant retirements, and multiple operational items and accounting adjustments. The settlement also addresses capital projects and related costs in the company’s three-year rate plan proposal.
“We are pleased that we were able to find common ground with the Public Staff on several key issues and develop a settlement agreement that prioritizes the needs of our customers, advances grid reliability and resiliency across the state, and maintains the financial health of the company,” Duke Energy North Carolina President Kendal Bowman said. “This is a significant and positive step in these proceedings.”
In December, Duke Energy Progress filed a rate hike request with the North Carolina Utilities Commission that would increase the company’s revenues by $623.5 million over three years, with most of it going toward improvements to align with the state’s forced transition to clean energy.
The three-year phase in would be partially offset the first year “by a $8.5 million refund of excess deferred income taxes resulting from the 2017 Federal Tax Cuts and Jobs Act and a reduction in North Carolina’s state-corporate tax rate,” according to the company.
The proposal would increase Duke’s current $3.4 billion in revenue by $227.6 million through a 6.6% general base rate increase, and by another $106.7 million or 3.1% rate increase in the first year, bringing the total first-year rate increase to 9.7%.
Another 4.3% increase in year two would generate $150.8 million for Duke, while the third year increase of 4% would bring in another $138.3 million. In total, the proposal would generate $623.4 million over three years with a total rate increase of 18%, though the $8.5 million refund would lower the total increase to 17.7%.
The proposal would increase the monthly bill for a typical residential customer using 1,000 kilowatt-hours per month by $14.72 to $141.15 on Oct. 1, followed by a $5.62 increase in October 2024 and a $5.21 increase in October 2025.
Duke contends the increases are necessary to cover costs for distribution and transmission projects to modernize the electric grid, improvements to reliability for clean energy, closure of coal ash basins, new billing and customer information systems, maintenance of the Duke nuclear fleet and Duke’s COVID-19 response.
While the settlement last week resolves some of those costs, matters that remain unresolved include equity, capital structure, and COVID-19 cost recovery. Those items will be considered at a public hearing before the utilities commission on Thursday.
Duke Energy Carolinas is seeking a similar 17.9% rate hike for the same reasons, as well as a 16.6% rate hike to cover fuel prices. The proposals come as parent company Duke Energy faces increased scrutiny following Christmas Eve blackouts that left thousands in the cold, and pressure to meet the state’s carbon reduction goals.
Duke Energy Carolinas serves homes and businesses in western North Carolina, including Charlotte, Durham and the Triad. Duke Energy Progress serves about 1.5 million customers in central and eastern North Carolina and in the Asheville region.
Duke Energy last requested rate increases in 2019.
