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News State / Region Duke Energy rate increase hearing set for May 21 in Franklin

The North Carolina Utilities Commission has announced public hearings across the state to solicit input over the Duke Energy rate increase proposal. Franklin will host a hearing for the increase for Macon and surrounding counties on May 21 at 7 p.m. at the Macon County Courthouse.

The public hearing in Franklin will mark the second time that the Utilities Commission has used Macon County as the host for the only public hearing in far western North Carolina, the first being last year regarding Duke Energy's first increase proposal.

The hearing will allow the public to voice their opinions regarding Duke Energy's recently filed 9.7 percent rate hike, which would increase the typical residential rates by about $14 per month.

The hearing in Franklin is one of six in a series of public hearings, starting in late May, in cities throughout the western half of the state for customers and interest groups to comment on the rate increase.

The overall 9.7 percent request will allow Duke Energy to increase electric rates by approximately $446 million.

According to Duke Energy, more than 90 percent of the request is driven by capital investments that Duke Energy Carolinas has made in the electric system that serves 1.9 million households and businesses in North Carolina.

“As part of our ongoing fleet-modernization plan, we have recently built and put into service two new state-of-the art power plants that will provide cleaner air and serve our customers reliably for decades to come,” said Paul Newton, Duke Energy state president – North Carolina.

“The new natural gas plant at Dan River does the job of three older, less efficient coal plants that we will now retire,” Newton said. “And it does so with significantly lower emissions. Advanced technology at the Cliffside Steam Station in Mooresboro, completed at the end of 2012, removes more than 99 percent of sulfur dioxide emissions and 90 percent of nitrogen and mercury emissions.”

In addition to the 9.7 percent increase, Duke Energy filed a separate request with the Utilities Commission last week that would increase typical residential bills $2.86 a month to pay for energy efficiency programs.

A separate part of customer bills, for fuel costs, will remain unchanged. The proposed increase to energy efficiency rates includes amounts related to Duke Energy Carolinas’ Save-a-Watt pilot program, which ends in December 2013. The rates also include amounts for the company’s proposed energy efficiency programs and cost recovery mechanism that will go into effect Jan. 1, 2014.

“We are continually working to refine our energy efficiency offerings for customers,” said Paul Newton, Duke Energy president – North Carolina. “The new programs we are rolling out beginning in 2014 will expand these offerings and provide more options for our customers to take control of their energy use and their bills.”

The fuel portion of the company's rates is adjusted annually by the NCUC to reflect the actual cost of fuel the utility uses to produce electricity to meet customer demand.

By law, the fuel charge is a direct pass through and Duke Energy Carolinas does not make a profit from this charge. New fuel charges take effect on Sept. 1 each year.

The company also files annually to recover the costs of implementing programs designed to help reduce energy consumption and save customers money on their energy bills. These filings, and their subsequent proceedings, are separate from the base rate increase proposal currently filed with the NCUC.

Duke Energy Carolinas will make a separate filing next week regarding the portion of customer rates that pays for renewable energy investments required to comply with state law. The filing is not expected to result in a significant change to customers’ bills.

Macon County Commissioners have become leaders in establishing momentum on the local level to oppose the rate hikes. During a meeting last week, commissioners approved a resolution opposing the rate hike and the adverse affect it stands to have on citizens in Macon County. “ Duke was granted a 7.2 percent rate increase by the Utilities Commission last year, and; Whereas, there are many residents in Macon County on a fixed or low income who are in no position to absorb yet another significant rate increase, and; now, therefore be it resolved by the Board of Commissioners for the County of Macon as follows: That the Board of Commissioners is deeply opposed to the proposed rate increase as filed by Duke Energy Carolinas and will strongly encourage the N.C. Utilities Commission to reject this increase.”

According to County Manger Jack Horton, Cherokee County was the first county to follow suit with Macon, and other counties are expected to join soon.

Last month, Commissioner Chairman Kevin Corbin noted that while he understood Duke Energy's need for infrastructure improvements, the timing of the proposal places an undue hardship on families in Macon County. “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 Corbin last month. “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. 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.”


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