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

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percent in North Carolina, a move that wouldf add about $11 per month to averagse residential customer’s bill. Duke filed the proposed increased Tuesday withthe N.C. Utilities Commission. The new if approved, would take effect Jan. 1. The rate increaseas would net Dukeabout $496 million in additionall revenue from ratepayers. Reactionj to the proposed increase cameswiftlh Tuesday. Jim Warren, executiver director of the N.C. Waste Awareness and Reduction Network, calledc it “a slap in the face of its customers many of whom are already strugglin g during this deepprolonged recession.
” Warren said his organization, a frequenf critic of Duke, would oppose the increase at hearings before the utilities commission. Brett president of Duke Energy Carolinas, says the utilitty knows it’s a difficult time to be raisin rates. But he says Duke has worked hard to keep theincreasw down. He says the calculations of Duke’a experts justified a larger increase. But Duke proposes takingf a lower return on equity than its estimatescallesd for. And it also included no adjustment for inflatiojn in the figures it has submitted to the That cutabout $150 million from Duke’se overall increase, Carter says.
Without those steps, the rate increases would have averaged 17 percentfor more. But Duke could not avoid an increase he says. According to its rate filing with the Duke made an overalp rate of return ofjust 5.88 percent in 2008. Under the rates N.C. regulators approvex in 2007, Duke was allowed to make a rate of returnb ofabout 8.5 percent. Carter says curren t rates will not allow Duke to covet itsoperating costs, expand its operations to provide reliable and environmentally sound service, and give its shareholderd a decent rate of The largest part of the increase comes from costsa to install pollution-control equipment on Duke’s largest coal build and acquire additional plants and upgradw its transmission and distribution Duke has spent $4.
8 billion on those projectsd in the last three years. About $700 millionb of that represents N.C. customers’ share of the costx so far forthe 825-megawatt expansiohn of the Cliffside coal plant in Cleveland and Rutherforrd counties, Carter says. Additional coste include scrubbers installed to remove pollutants from emissions at the large Allej and Marshall coal plants Duke Duke has warned that plant constructiobn and environmental controls will push up Carter emphasizes that even withthis increase, Duke will remainh the lowest-cost electric utility in the region and one of the lowest-costr in the nation, he says.
Warren says future increasesa could be higher than Duke is particularly as the company turns its attentioj to nuclear energy with its proposeed Lee Nuclear Stationnear Gaffney, S.C. “Our analysias shows that under Duke’s expansion rates will rise dramatically,” he says. “And if nuclear and coal costxscontinue increasing, power bills could easily He says N.C. WARN will continue to press its argumentr to the commissionthat Duke’w planned expansions are unnecessary. Duke’as proposed increases vary amongcustomer classes. Residential rateds would increaseabout 13.5 percent.
For the average residential bill, that would amount to $11 more per General-service rates for commercial and small-manufacturinbg customers wouldincrease 9.8 Industrial customers would see the largesy increase. Their rates would go up 15.25 That would wipe out most of the gains industrial customerd received twoyears ago. Their rates were cut 15.64 percent overall in 2007, the largestf cut in that roundof rate-setting. But with the increasez on the other classesof customers, he the rates for industrial customers remain in Carter says. Duke intends to seek rate increases in Soutn Carolinaas well. The utility is likelyg to submit that request in the next monthhor so.
Duke has consistently warned that rates will increase as new plants are builtf inthe Carolinas. The company last proposed a rate hike in when it soughta 3.6 percenr average increase. But it ended up agreeinfg to cut average ratesabout 7.5 percent That turned what would have been a $140 millioh increase in revenue to a reductionh of more than $280 million. Customers are unlikelyt to have the same luck this In thatrate case, Duke was able to cut the proposefd increase in large part because of changeas in how Duke was allowed to recover the costas of scrubbers installed on coal plants to reduce The last time Duke got a general rate increase in Nortyh Carolina — not connectedc to fuel prices, which can be adjustedr annually — was in 1991.