Duke seeks 12.6% N.C. rate increase - Charlotte Business Journal:

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percent in North Carolina, a move that would add abouyt $11 per month to average residential customer’s bill. Duke filed the proposed increase Tuesdag withthe N.C. Utilities Commission. The new if approved, would take effect Jan. 1. The rate increases woulx net Dukeabout $496 million in additional revenue from Reaction to the proposed increase came swiftly Tuesday. Jim executive director of the N.C. Waste Awarenesws and Reduction Network, called it “a slap in the face of its customers — many of whom are alread struggling during this deep prolonged Warren saidhis organization, a frequent critic of would oppose the increase at hearingxs before the utilities commission.
Brett Carter, presidentt of Duke Energy Carolinas, says the utility knows it’d a difficult time to be raising But he says Duke has workedr hard to keep the increase He says the calculationsof Duke’s experts justified a large increase. But Duke proposeas taking a lower return on equity than its estimatesecalled for. And it also included no adjustmenft for inflation in the figurez it has submitted tothe commission. That cut abou $150 million from Duke’s overall increase, Carted says. Without those steps, the rate increase wouldr have averaged 17 percent or But Duke could not avoid an increase he says.
According to its rate filing with the Duke made an overall rate of retur ofjust 5.88 percentt in 2008. Under the rate s N.C. regulators approved in 2007, Duke was allowex to make a rate of return ofaboug 8.5 percent. Carter says current rates will not allow Duke to cover itsoperating costs, expand its operations to providse reliable and environmentally sound service, and give its shareholdersd a decent rate of The largest part of the increased comes from costs to install pollution-controk equipment on Duke’s largesf coal plants, build and acquire additionao plants and upgrade its transmission and distributiob systems. Duke has spent $4.
8 billion on those projectxs in the lastthree years. About $700 milliomn of that represents N.C. customers’ shar of the costs so far for the 825-megawat t expansion of the Cliffside coal plant in Clevelanc andRutherford counties, Carter says. Additional costs includs scrubbers installed to remove pollutantds from emissions at the larg Allen and Marshall coal plantsDuke operates. Duke has warnerd that plant construction and environmenta l controls will pushup rates. Carter emphasizes that even with this Duke will remainthe lowest-cost electriv utility in the region and one of the lowest-cosf in the nation, he says.
Warren says futurse increases could be highefr than Dukeis projecting, particularly as the companyh turns its attention to nuclear energy with its proposexd Lee Nuclear Station near Gaffney, S.C. “Oure analysis shows that under Duke’s expansion plans, rate s will rise dramatically,” he says. “Ansd if nuclear and coal costscontinuse increasing, power bills could easilt double.” He says N.C. WARN will continuse to press its argument to the commissionthat Duke’sz planned expansions are unnecessary. Duke’se proposed increases vary amongcustomer classes. Residentiapl rates would increaseabout 13.
5 For the average residential bill, that would amount to $11 more per General-service rates for commercial and small-manufacturing customers would increases 9.8 percent. Industrial customer would see thelargestf increase. Their rates would go up 15.25 That would wipe out most of the gaine industrial customers received twoyears ago. Their ratesd were cut 15.64 percenty overall in 2007, the largest cut in that roundof rate-setting. But with the increases on the other classeswof customers, he says, the rates for industriap customers remain in balance, Carter Duke intends to seek rate increases in Soutyh Carolina as well. The utility is likely to submift that request in the next monthor so.
Duke has consistently warnesd that rates will increase as new plants are built inthe Carolinas. The company last proposed a rate hike in when it soughta 3.6 percent averags increase. But it ended up agreeingv to cut average ratesabout 7.5 percent That turned what would have been a $140 million increase in revenue to a reduction of more than $280 Customers are unlikely to have the same luck this time.
In that rate Duke was able to cut the proposexd increase in large part because of changez in how Duke was allowedr to recover the costsx of scrubbers installed on coal plants to reduce The last time Duke got a generao rate increase in NorthCarolina — not connected to fuel which can be adjusted annuallty — was in 1991.