Advocating for NC’s Electric Consumers in the Duke Energy Progress Rate Case: Recap

As you know, NCSEA is actively engaged in both Duke Energy subsidiaries’ rate cases to pursue issues that matter to our members and further the best interests of North Carolina electric consumers through more clean energy options. (For a recap of the Duke subsidiaries’ rate increase requests, read more on our blog.) NCSEA’s regulatory team and our extended team of expert witnesses spent the first two weeks of the month attending the Duke Energy Progress evidentiary hearing in Raleigh, where we expressed our concerns with certain aspects of the utility’s proposed 10.8% rate hike and promoted clean energy considerations in their rate structure. Below are 5 takeaways from the DEP hearing:

1. The proposed higher “fixed rate” will hit rooftop solar customers hard. Duke is seeking a 26% increase for the fixed-rate “basic customer charge” imposed on every residential rate payer. NCSEA pointed out that this increase means net metering customers, including rooftop solar adopters, will pay higher bills every month – even if they have a net consumption of zero kWh. This negatively impacts the return on investment for rooftop solar, requiring longer timeframes to recoup an investment. As others pointed out in the hearing, the proposed higher fixed rate also disproportionately impacts low-income customers. Read more on the fixed rate proposal here.
2. True grid modernization isn’t included in the currently proposed rate structure. Grid modernization – a multi-BILLION dollar issue – warrants consideration outside of the rate case. Accordingly, NCSEA asked the Commission to pull DEP’s “PowerForward” grid modernization proposals out of the rate case and open a separate docket dedicated to this issue. This would enable NCSEA to argue proactively for more resilient, reliable, and advanced clean energy options for our state’s future energy portfolio, rather than settling in the short-term for more buried power lines. Read more about our issues with grid modernization in the context of the rate cases here.
3. Coal ash, coal ash and more coal ash. Unfortunately, the lion’s share of discussion at the hearing circulated around coal ash – namely, how Duke will recover about $300 million already spent on complying with new environmental rules for treatment of coal ash and $129 million a year they want built into rates for future compliance costs. During questioning on the issue, the utility was pegged for “egregiously failing its environmental mission” and asked about its insulation from financial consequence, regardless of the outcome of Duke’s lawsuits against its insurers regarding coal ash cleanup: DEP’s customers will pay the costs of the litigation and coal ash cleanup, and will only receive a refund if Duke succeeds in its lawsuits. Read more about the coal ash discussions from the rate case here.
4. Duke couldn’t explain why they don’t have better rate design. Put simply, Duke’s current rate design is outdated, to the detriment of NC electric consumers. It especially does not encourage clean energy adoption: In addition to increasing the residential fixed rate in the rate case, DEP had proposed to reduce the price differential between on-peak and off-peak rates, which would effectively reduce the financial incentive for homeowners to embrace clean energy choices. NCSEA and our team of expert witnesses argued for better rate design that encourages continued clean energy adoption. During questioning on rate design, Duke couldn’t explain why they didn’t have a more innovative structure by now. Read more on why rate design is a timely issue for NC and beyond, here.
5. They will have the data. But we won’t have access (yet). DEP is seeking hundreds of millions of dollars to install smart meters and upgrade software to “help consumers more actively manage their energy consumption.” The problem is, Duke wants to restrict data access to their own proprietary smart phone app, rather than allowing consumers to choose data analytics software that best meets their needs. NCSEA supports true data access that would give consumers the raw data to have more visibility into their energy usage and allow them to partner with third parties for conducting analysis. During cross examination by NCSEA at the hearing, DEP admitted that it had no plans to improve consumer access to this data or to engage stakeholders on the issue. Read more about our issues with Duke’s proposed data access plans here.

The NC Utilities Commission is expected to rule on Duke Energy Progress’s rate proposals in February. Stay tuned to our Insights newsletters, social media and biweekly call for business members for updates in the meantime. As a reminder, the Duke Energy Carolinas rate case will pick up speed in mid-January with three public hearings and the evidentiary hearing on February 19. Read more about the hearings schedule here.