Energy costs across the state are once again increasing as Duke Energy Carolinas was awarded another overall 4.5 percent rate increase by the North Carolina Utilities Commission. The rate increase, which stands as Duke Carolinas’ third since 2009, will increase to 5.1 percent after two years. That increase will allow the utility to make a 10.2 percent shareholder profit and a capital structure of 53 percent equity in a challenging economic climate.
“I feel the same why about this increase as I have about all the others,” said Macon County Commissioner Ronnie Beale. “In this environment, we have to do what is best for our citizens and they cannot afford another increase. We have a large population of elderly residents and people on fixed incomes. I don't know of any other business that has gotten to raise rates three times in two years.”
A typical residential electric company bill will go up around $7.60 a month in 2015, which will take an average bill to $110. Serving nearly two million customers predominantly in the western portion of the state, Duke Energy asked for the most recent rate hike because the funds are “critical to the company’s modernization plan to address increasingly stringent environmental regulations, and also to retire and replace aging power plants.”
Like other rate increases in the past, the 4.5 percent increase is expected to cover the cost of infrastructure improvements such as a new coal-fired unit at Duke’s Cliffside power plant west of Charlotte, and for a natural gas-fueled plant in Eden.
North Carolina Attorney General Roy Cooper announced that he plans to appeal the rate hike because he says the increase fails to adequately consider the impact it will have on the average consumer.
“The order approving this rate hike talks a lot about consumers but doesn’t really consider their interests,” Cooper said. “Just paying lip service to the challenges North Carolinians face in tough economic times is not enough.”
Commissioner Beale agrees with Cooper. “I would have to agree with our state Attorney General in saying that they are not considering the impact this would have on consumers,” said Beale. “I would hope that Duke would pull the request.”
Cooper previously appealed Duke’s 2011 7.2 percent rate hike and won, with the N.C. Supreme Court sending it back to the utilities commission for reworking. The court said the commission didn’t fully assess the impact of Duke’s profit margin on low-income customers.
In the April 12 ruling, the North Carolina Supreme Court agreed with Cooper’s assessment that state law (NCGS § 62-133) requires the Utilities Commission to determine the impact on consumers before setting an allowable profit margin and agreeing to raise rates.
“The law requires the commission to set rates as low as possible, and they haven’t done that here,” Cooper said. “The top court in the state agreed with us that consumers must be taken into account when deciding the utility’s profit margin.”
Cooper is also fighting a 7.5 percent rate increase from Duke Energy Progress, the portion of the company formed when Duke Energy acquired Progress Energy.