Duke Energy Carolinas today filed a request with the North Carolina Utilities Commission (NCUC) to increase electric rates by approximately $446 million, for an overall increase of 9.7 percent.
More than 90 percent of the request is driven by capital investments that Duke Energy Carolinas has made in the electric system that serves 1.9 million households and businesses in North Carolina.
“As part of our ongoing fleet-modernization plan, we have recently built and put into service two new state-of-the art power plants that will provide cleaner air and serve our customers reliably for decades to come,” said Paul Newton, Duke Energy state president – North Carolina.
“The new natural gas plant at Dan River does the job of three older, less efficient coal plants that we will now retire,” Newton said. “And it does so with significantly lower emissions. Advanced technology at the Cliffside Steam Station in Mooresboro, completed at the end of 2012, removes more than 99 percent of sulfur dioxide emissions and 90 percent of nitrogen and mercury emissions.”
Today, a residential customer who uses 1,000 kilowatt-hours (kWh) of electricity per month pays $102.72. If the company’s rate increase is approved as filed, that bill will increase by $14.27.
“Electric service for our customers is an excellent value. For our typical customers, the daily cost of powering their homes is somewhere between the price of a gallon of gas and a latte from a coffee shop,” Newton said. “Even with the proposed increase, Duke Energy Carolinas’ rates would remain well below the national average. When adjusted for inflation, our customers are still paying less for electricity than they did in 1991.”
Why Raise Rates?
The proposed rate increase is needed to begin paying the company back for money it has already invested in new cleaner, more efficient power plants and equipment and to comply with increasing state and federal regulations.
Examples of Duke Energy’s electric system investments include:
Dan River Combined Cycle Station in Eden, N.C. — This 620-megawatt unit uses cleaner, lower-cost natural gas to replace a similar amount of older, less efficient coal-fired generation. The capital cost included in this rate case is $673 million.
Cliffside Steam Station Unit 6 in Mooresboro, N.C. — This 825-megawatt coal plant employs state-of-the-art emission controls to remove 99 percent of sulfur dioxide, 90 percent of nitrogen oxides and 90 percent of mercury. The high-efficiency technology burns less coal per megawatt-hour of electricity generated than most other coal units in the nation. The capital cost included in this rate case is $863 million.
Oconee Nuclear Station, Oconee County, S.C. — New safety and security measures have been installed to continue to protect the plant from extreme conditions or a natural disaster. The Oconee plant is a safe and efficient source of carbon-free electricity generation. The capital cost included in this rate case is $448 million.
McGuire Nuclear Station, Mecklenburg County, N.C. — Upgrades have been made to the facility to make it more efficient and increase the amount of carbon-free electricity it produces. The capital cost included in this rate case is $203 million.
In addition to the investments in new generation, the rate request also seeks to pay items such as a new storm reserve fund and industrywide security upgrades.
“We are committed to minimizing the impact of increased costs on our customers,” Newton said. “We offer a number of energy-efficiency programs and assistance for low-income customers. Since 1985, our Share the Warmth Program has given more than $33 million to low-income customers for heating bills during the winter season.”
Since the company’s 2011 rate case, Duke Energy Carolinas and its customers, employees and shareholders have provided total funding of approximately $1.5 million to these programs through the Duke Energy Foundation, in addition to an $11 million donation stemming from the company’s last rate case.
Customers can help control their energy costs with efficiency programs. Learn more at http://www.duke-energy.com/youtility/
The company’s request proposes an allowed return on common equity (ROE) of 11.25 percent (the current allowed ROE in North Carolina is 10.5 percent) with a 53 percent common equity component. The allocation of North Carolina retail rate base is expected to be approximately $12 billion through the date of the hearings.
For more details on the company’s request to increase rates, visit duke-energy.com.
The testimony filed in support of the company’s request can be viewed at the NCUC website (search using Docket No. E-7, Sub 1026).
Photos of some of the capital investments made in the Carolinas electric system can be downloaded from Flickr.
Duke Energy Carolinas owns nuclear, coal-fired, natural gas and hydroelectric generation. That diverse fuel mix provides 20,292 megawatts of electricity capacity to approximately 2.4 million customers in a 22,000-square-mile service area of North Carolina and South Carolina. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at duke-energy.com.