Over the summer, both Duke subsidiaries operating in North Carolina filed applications to increase their retail rates with the North Carolina Utilities Commission. Duke Energy Progress, LLC ("DEP") filed their application on June 1 in Docket No. E-2, Sub 1142, and Duke Energy Carolinas, LLC ("DEC") filed theirs on August 25 in Docket No. E-7, Sub 1146. While the applications are in two separate proceedings, many of the same issues present themselves in both dockets, and NCSEA is engaging in both dockets to pursue issues that matter to our members.

DEC is seeking a 13.6% average rate increase, and DEP is seeking a 14.9% average rate increase. For the average residential consumer, this means a $18.72 per month increase for DEC customers and a $17.80 per month increase for DEP customers. Much of this increase is driven by the utilities' investments in new generation. Combined, the utilities seek to recover $340 million for utility-owned solar, but that amount is dwarfed by the $973 million they have invested in natural gas. DEC also seeks to recover $353 million from North Carolina ratepayers for its investment in the Lee Nuclear plant, which it is now seeking to abandon. The largest costs, however, come from coal ash cleanup. DEC seeks to recover $457 million and DEP seeks $311 million for coal ash cleanup costs incurred through the end of 2016. However, the filings note that the two companies are expecting the total cleanup costs to be over $2.6 billion for DEC and $2.5 billion for DEP, meaning that coal ash cleanup costs will be a driver of rate increases for years to come. The utilities' grid modernization plans also have the potential to impact rates for years to come. Their proposal, which is short on specifics, is expected to invest $13 billion over the next ten years, a cost that is more than double the coal ash cleanup costs.

Other interesting tidbits contained in the filings include full smart meter deployments by both utilities, new back-office billing software that better integrates rate schedules such as net metering, and increased residential fixed charges of $17.79 for DEC and $19.50 for DEP.

Stay tuned on our blog for more updates on the rate case proceedings in the coming months. NCSEA members receive regular updates on this and other regulatory issues through our monthly Insights newsletter and biweekly member calls. Not a member? Join us today.

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