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News State / Region Duke Energy asks for 9.7 percent rate hike

Request to the NCUC makes the third since 2009.

Duke Energy Carolinas’ customers were hit with another proposed rate hike earlier this month, as the company announced plans to seek permission to raise electric bills on its nearly two million North Carolina customers by almost 10 percent.

The request to the North Carolina Utilities Commission would be the utility's third since 2009, which Duke says will help pay for building and upgrades to power plants, transmission lines and pollution controls.

Duke Energy plans to make its case for a 9.7 percent rate increase, or $446 million, to the North Carolina Utilities Commission in July. If approved, the higher rates would go in effect in September.

The most recent proposal would force residential rates to go up 11.8 percent under the proposal, which would raise the monthly bill for a customer who uses 1,000 kilowatt-hours from $102.72 to $116.99.

The request calls for commercial rates to increase by 9.6 percent and industrial rates by 5.3 percent.

"Even with the proposed increase, Duke Energy Carolinas' rates would remain well below the national average," Paul Newton, who oversees Duke's North Carolina operations, said in a statement.

Newton said capital spending is driving the request, noting that Duke has already spent almost $2.2 billion to build or modernize power generation plants in the Carolinas.

North Carolina Attorney General Roy Cooper is still fighting a 7.2 percent rate increase that the Utilities Commission awarded to Duke a year ago, saying that the agency should have placed more weight on the recession's impact on consumers in reaching its decision. The North Carolina Supreme Court has yet to rule on Cooper's challenge.

Macon County Board of Commissioners have been vocal against the company's rate increases, making its position known by sending a resolution to the state when the company requested a 17 percent increase last year, in which the NCUC only approved 7.2 percent.

“I feel about this the same way I did before; I have said that I would be unwilling to raise taxes in Macon County – that we need to live within our current rate so as to not increase expenses on folks in these continued tough economic times,” said Commission Chair Kevin Corbin. “When we do our revaluation, I am certain that we will adopt a revenue neutral budget that keeps the county income from property taxes the same. In other words, no increase in the amount of taxes paid. That is living within the same budget. With that parallel in mind, I understand Duke’s request to pay for infrastructure, but their timing on these increases is less than ideal.”

According to Corbin, the company's timing is not the only thing that is off with the most recent request.

“I would suggest to Duke that they do everything possible to trim their budget and attempt to live within their current means. Our county has achieved this, and I think it is the right thing to do. If my fellow commissioners agree, I will be happy to sign another resolution opposing the increase. We have a pretty good relationship with other county commissioners across the state and I am sure we will be talking to others to see if they plan to follow suit. We were pretty outspoken in opposing the increase before and I suspect we will be again. If we raised local taxes 9.7 percent that would be pretty tough to justify. The Duke increase would be the same type impact. People would not have a choice but to take the increase. They cannot go down the street and hook up to another power company.”

With the stagnant economy, residents in Macon County have been struggling to keep the power on as it is, and don't believe they will be able to keep their heads above water if hit with another increase.

“They just got a raise last year and no one can afford their stockholders to get richer while we get poorer, get real Duke,” wrote Lorrie Deal on the Macon County News Facebook page.

According to Candice Crisp, another increase would be just enough to put her over the edge. “It's absolutely ridiculous,” she wrote. “I already pay $200 a month, dear lord, if it goes up anymore I will just be working to pay my power bill.”

Christian Pruitt argued that other businesses who seek improvements, do so within their own budget, without causing additional costs to customers.

“I think that they don't realize that a business does its own improvements with its own profit,” wrote Pruitt. “They already make millions in profit and they claim that it is not enough. They should look at the businesses that have to abide by the laws and make improvements that don't have a monopoly. They were already given a raise in rates and it went to bonuses. They need to back off and just be happy with the profits they make now.”

One argument made by county commissioners when opposing the company’s rate increase last year, was the burden it would place on individuals on a fixed income. Susan Jones agrees that the most recent increase would continue to place a financial burden on them.

“It's hard to afford them now,” she said. “Don't take advantage of people just because they need electricity to live. That is awful, unfair and inhumane. They are especially affecting the elderly and the very young when you make hikes like this. Don't take advantage of N.C. just because you think you can. It's immoral.”

CareNet of Macon County is responsible for distributing heating assistance provided by the Macon County Department of Social Services Emergency Heat Assistance fund, as well as other pockets of money such as CareNet funds and Duke Energy's own “Share the Warmth” program. According to CareNet Director Shaina Adkins, to date, the organization has provided Macon County residents with $194,376.45, which is 733 approved applications for assistance through DSS' Crisis Intervention Program. An additional $82,500, or 336 applicants have been helped through DSS’ Low Income Energy Assistance Program.

A combined $44,028.93 was provided to residents through Share the Warmth and CareNet funds, making a total of $320,905.38 being distributed through CareNet to local residents who needed help keeping the power on so far this winter.

According to Senator Jim Davis, state lawmakers may not be able to prevent the rate increase, as that is a decision left up to the NCUC, but they can introduce other legislation that would cut operating costs for the company, which would result in lower costs for customers. “Our goal in the legislature is to reduce the regulatory burden on Duke,” said Davis. “The cost of regulations and taxes that are imposed on businesses are passed on to the customers. We can reduce those regulations.”

Davis said another approach lawmakers have been considering is placing a cap on the company's renewable resource operating percentage. “We need to look at legislation that caps the allotted amount of renewable resources such as solar and wind energy, because those types of electricity are too expensive to obtain,” said Davis. “Duke Energy has projected in the next few years to expand its renewable resources to 12.5 percent or 1/8 of the electricity they offer; we need to cap it there because those types of energy are not economically viable in the current economic environment.”

Duke Energy is not expected to make a case before the NCUC before July, but in the meantime, hearings are being scheduled across the state to hear from residents regarding the increase.

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