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News State / Region Duke Energy agrees to 5.1% rate increase

The saga of the Duke Energy rate hikes will continue when the North Carolina Utilities Commission hears expert testimony on July 8 in Raleigh.

Two weeks ago, Duke proposed a settlement of an overall 4.5 percent rate increase that will grow to 5.1 percent in two years, about half of what was originally requested. The higher rate would result in an increase in residential power bills, averaging about $7 a month.

This will be the third increase since 2009 and according to the group, Consumers Against Rate Hikes (CARH), the latest increase would bring household rates to a level 30 percent higher than in 2009; 25 percent higher for small and medium businesses, while the largest industrial customers would only see an increase totaling around three percent. The North Carolina Utilities Commission still has to approve the increase.

At a public hearing held in Franklin on May 21, Duke officials pointed to its ability to keep rates low for large customers like Apple, Google, and others like those companies as a way to bring companies in to N.C. and provide jobs to its citizens. CARH contends that Duke shifts the costs of new power plants needed as a result of this business migration to its smaller customers. By offering extremely low rates and other incentives, Duke entices high-load, low-jobs data centers into the state, driving up demand for even more power plants that otherwise would not be needed—raising small customer rates.

Officials at the organization are also asserting that Duke Energy and Progress Energy have begun to push state politicians to enact legislation that would “make customers pay years in advance for power plants that aren't needed and might never be built.”

The state of Florida recently enacted a similar bill that would increase rates yearly which led to Florida Senator Mike Fasano (R) to pen a letter to N.C. legislators expressing his opinions of such a bill.

“We've learned the hard way here in Florida that allowing utilities to recover the costs of a new power plant before [it is built] is unfair to consumers and bad public policy,” he said.

Citizens have been turning out all across the state to give their opinions on these increases. Some have attended meetings to voice their support while the majority has fervently opposed the increases and cited a variety of reasons.

"I don't think it's fair to the residents of North Carolina," said Chris Evans, a native of Franklin. "There's still people who are struggling throughout the state from the economic downturn, not to mention older people who may be on fixed incomes. I'm just not convinced that Duke is considering these people."

AARP-NC has long opposed these rate increases while pointing to older customers, who, while paying higher energy bills, have yet to see an increase in Social Security that can compensate the rising costs for power.

“For older customers, many of which are on fixed incomes, Social Security increases have not kept pace with the size of the rate increase proposed,” said AARP State Director, Doug Dickerson. “Older and limited-income consumers pay a higher percentage of their income for electricity than do other households. With the seventh highest poverty rate in the nation, programs that provide energy assistance cannot keep up with the demand for assistance. Funds established by Duke Energy for further assistance are appreciated, but will only make a tiny dent in the true need.”

Dickerson is referring to the offer that Duke officials made saying that the company will contribute an additional $20 million to help low-income customers in the state pay their energy bills and provide training that improves worker access to jobs and increases the quality of the workforce.

“We understand there is never a good time to increase rates,” said Newton. “However, we believe this [settlement] will allow us to keep the rate increase to customers as low as we reasonably can, and still recover the investments we've made to modernize our system and to ensure safe, reliable and increasingly clean electricity in the future.”

Another dialogue that has been fueling the public hearings is the concern that many people have about the environment.

"It's the 21st century and they are still focusing on producing energy from fossil fuels," said Corey Picklesimer, another Franklin resident. "I think it's time that they quit throwing money towards these damaging fossil fuels and nuclear plants and start looking to cleaner alternatives like wind and solar."

On Monday, Attorney General Roy Cooper, who has taken on previous rate increases in the past, filed with the N.C. Supreme Court to appeal a 7.5 percent rate hike by Duke.

"Many people are already hard pressed to pay their bills, and now isn't the time to ask them to pay more so utilities can make bigger profit," said Cooper.





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published: 10/18/2013
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