Duke Energy Ohio Reaches Agreement on Electric Distribution Rate Case March 31, 2009
Duke Energy Ohio announced today that a settlement agreement has been reached with most intervening parties, the Staff of the Public Utilities Commission of Ohio (PUCO) and the Ohio Consumers' Counsel on its Electric Distribution Rate Case that affects the rates to deliver electricity to customers. The distribution rate is but one component of a typical residential customer's electric bill. Distribution charges cover the cost of building, operating and maintaining the system that delivers electricity to customers' homes and businesses.
The agreement, which establishes distribution rates, must be approved by the PUCO.
Under the terms of the settlement, the base cost for distribution service will increase by approximately three percent of the total bill annually for residential customers. The settlement resulted in an agreement that is 64 percent of the company's original filing and approves a mechanism for Duke Energy to recover costs related to last September's wind storm, but does not approve a specific amount. Duke would have to file a separate application to recover storm costs.
"This agreement establishes reasonable prices for distribution services while allowing us to continue to make investments in the delivery and maintenance of our system. We have made every effort to cut operating costs by freezing non-union salaries, renegotiating supplier contracts and cutting employee travel. This funding is essential for us to continue to deliver electricity in a safe and reliable way," said Julie Janson, president of Duke Energy Ohio.
Since its last electric distribution rate case in 2005, Duke Energy Ohio has invested more than $235 million for reliability improvements and in expansion of its system to meet new customer demands, including new substations and distribution circuits. The requested rate change would recognize the additional investment.
Under the terms of the settlement, the typical monthly cost for a residential customer using 1,000 kilowatt-hours will be $119.87, compared with the current monthly bill of $116.70. Duke hopes the rate plan can be implemented by the end of the 2nd Quarter of 2009.
Under the terms of the settlement, Duke Energy will contribute $480,000 annually to reduce low-income residential bills. The details will be announced at a later date. People Working Cooperatively will receive $200,000 per year for four years to design and manage advanced home energy efficiency programs for low-income and elderly residents. Also, the Ohio Partners for Affordable Energy will receive $50,000 per year for four years to administer and advance low-income assistance programs.
Duke Energy Ohio recognizes the impact of higher electric prices on its customers and offers energy efficiency programs, bill management assistance and energy usage information for both residential and non-residential customers, which are available on its web site, www.duke-energy.com.
Duke Energy Ohio's operations provide electricity to approximately 690,000 customers and natural gas service to approximately 425,000 customers.
Duke Energy is the third largest electric power holding company in the United States, based on kilowatt-hour sales. Its regulated utility operations serve approximately 4 million customers located in five states – North Carolina, South Carolina, Indiana, Ohio and Kentucky - representing a population of approximately 11 million people. Duke Energy's commercial power and international business segments operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.
Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.