Partial rate increase approved for Duke customers
By Rochelle Moore
Published in News on February 28, 2018 5:50 AM
The N.C. Utilities Commission approved a partial rate increase for Duke Energy Progress that is half the amount requested by the power agency last year.
The commission, which issued a decision late Friday, will allow Duke Progress Energy to increase its basic monthly residential customer fee from $11.13 to $14. Duke Energy sought to increase the fee to $19.50, an amount that was scaled back following a November settlement between the company and the public staff of the Utilities Commission.
Duke Energy Progress is also required to make a $2.5 million contribution, from shareholder funds, to the Helping Home Fund, which will be used to provide low-income energy assistance to customers in need.
The Utilities Commission has not ruled on an overall electric rate increase for Duke Energy Progress, which provides service to 1.3 million customers in central and eastern North Carolina and the Asheville region.
The power agency originally sought a 14.9 percent rate increase in 2017, an amount that was later reduced to 9.5 percent, said Meredith Archie, Duke Energy spokesperson.
"We are currently evaluating the North Carolina Utilities Commission's order and its exact impacts on customer rates, which will remain below the national average even after new rates go into effect," Archie said.
The commission's order on Friday details what costs can be included in an electric rate increase, which Duke Energy Progress will request within 30 days, Archie said.
"We will now calculate the update revenue and rate impact amounts and submit them to the NCUC for final approval," Archie said. "New rates may be effective one day after the commission approves this compliance filing, currently estimated by mid-March."
Duke Energy Progress initially sought to charge customers an additional $477.5 million, reflected in a requested 14.9 percent increase. The request was reduced to $419.5 million in September. The commission order cut the $419.5 million revenue request by more than 50 percent Friday.
The commission, in its decision, acknowledged that "the rate increase ... will be difficult for some of DEP's customers to pay, in particular the company's low-income customers."
On Friday, the Utilities Commission imposed a $30 million management penalty on Duke Energy Progress for its handling of coal ash, which it said "placed its consumers at risk of inadequate or unreasonably expensive service," according to the commission order.
The penalty will be paid for by the company and not rate payers, according to the commission.
The Utilities Commission found that Duke Energy Progress admitted to system-wide shortcomings, such as improper communication among those responsible for the oversight of coal-ash management. The company also paid too much for coal ash removal at its Asheville coal-burning plant, which led to the commission denial of recovering $9.5 million from its customers, the commission said.
Ongoing coal-ash remediation costs will be reviewed by the commission at a later date.
"This transparent and thorough process with the NCUC and other stakeholders appears to have produced a result that balances the needs of customers and the company," Archie said. "Our investments over the past several years have helped transition to cleaner energy sources, while we safely close ash basins in ways that protect people and the environment."
The Southern Environmental Law Center, which represented a coalition of consumer and clean energy organizations, including the N.C. Justice Center, advocated against the rate increase but praised the commission decision to require a $2.5 million contribution to the Helping Home Fund, a federal weatherization assistance program.
"We are disappointed that the commission did not stand up for customers -- especially those struggling to pay their bills, which are now more than 1.4 million households," said Gudrun Thompson, senior attorney at the Southern Environmental Law Center. "While Duke is enjoying record profits, the commission undercut customers ability to reduce their energy use and lower their bills with cost-effective energy efficiency."
Duke Energy Progress last sought an 11 percent increase in 2012 and was approved to increase rates by 5.5 percent.