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North Carolina Utilities Commission approves rate increase for Duke Energy Progress' North Carolina customers May 30, 2013

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RALEIGH, N.C. -

The North Carolina Utilities Commission (NCUC) today approved Duke Energy Progress’ proposed settlement in the company’s request to increase electric rates for its North Carolina customers.

Major Components

  • A total $178.7 million, or 5.5 percent average, increase for North Carolina customers to be implemented over two years.
  • The approved rates include a return on equity (ROE) of 10.2 percent and a capital structure of 53 percent equity and 47 percent debt.
  • Duke Energy Progress will contribute an additional $20 million to help low-income customers in North Carolina pay their energy bills and to provide training that improves worker access to jobs and increases the quality of the workforce. Additionally, the company will be allowed to reduce its cost of removal liability by $20 million.

"We are pleased the N.C. Utilities Commission has approved our settlement in this case. We believe that the settlement reflects a balance between the needs of our company and those of our customers," said Paul Newton, Duke Energy state president – North Carolina.

"We understand there is never a good time to increase rates. However, we believe this approved settlement will allow us to keep the rate increase to customers as low as we reasonably can, and still recover the investments we’ve made to modernize our system and to ensure safe, reliable and increasingly clean electricity for the future."

Under the terms of approval, the total rate increase will be implemented over two years. Electric rates will increase by $147.4 million, or an average of 4.5 percent, beginning June 1, 2013. Rates will increase by an additional $31.3 million, or 1 percent, beginning June 1, 2014. The total increase in rates over the two-year period will be $178.7 million, or an average increase of 5.5 percent for all customers.

The year two increase accounts for $31.3 million in costs associated with the construction of new natural gas combined-cycle generation at the Sutton Plant in Wilmington, N.C. 

The following chart illustrates the proposed net rate increases by customer type:


Average net rate
increase percentage

Retail

Residential

Small General Service

Medium General Service

Large General Service

Year 1

4.5 percent

6.5 percent

4.2 percent

3.5 percent

2.7 percent

Year 2

5.5 percent

7.5 percent

5.1 percent

4.5 percent

3.6 percent

This table shows the average impact of the proposed changes for each customer class. The specific increase or decrease for individual customers will vary depending on the rate they pay and other factors.

The bill for an average residential customer using 1,000 kilowatt-hours (kWh) of electricity per month would increase to $111.39 from the current $104.06. That includes an increase in the basic customer charge to $11.50 per month from the current $6.75.

Even with the approved rate increase, the company’s rates remain below the national average.

The entire rate order can be viewed at the NCUC website (NCUC Docket # E-2, Sub 1023).

The approved settlement was agreed upon by Duke Energy Progress and the N.C. Public Staff, which represents the public interest in a rate proceeding. Duke Energy Progress originally requested an average increase in retail revenues of 11 percent, or $359 million.
July 8.

Modernizing the system, investing for the future

Since its last rate case in 1987, Duke Energy Progress has invested $11 billion to modernize the power plants that generate electricity and update the electric system.

These improvements have helped Duke Energy Progress achieve a reliability rate of 99.97 percent, while reducing emissions and generating electricity more efficiently than ever before. Investments in advanced emission-control technologies have helped lower nitrogen oxide emissions by more than 62 percent and sulfur dioxide emissions by more than 50 percent, since 2005.

The approved rate increase will be used to recover investments already made to modernize the system and ensure safe and reliable service for customers every day.

Additional information on the Duke Energy Progress rate case can be found at www.duke-energy.com/ncrates.

Helping customers manage their energy costs

Duke Energy Progress is committed to helping customers mitigate the effects of increased electricity costs through energy efficiency programs and assistance for low-income customers.

The company has developed more than a dozen new energy efficiency programs over the last three years, helping customers save more than 357 million kWh since 2009 (the equivalent annual energy consumption of 25,000 households).

The company also helps customers with payment plan options and has provided more than $21 million since 1982 to help families in economic crisis through the Energy Neighbor Fund.

As part of the approved settlement, Duke Energy Progress will contribute an additional $20 million to help low-income customers in North Carolina pay their energy bills and to provide training that improves worker access to jobs and increases the quality of the workforce.  Additionally, the company will be allowed to reduce its cost of removal liability by $20 million. Customers can learn more about saving energy and money on their bill at www.duke-energy.com/save.

Duke Energy Progress

Duke Energy Progress, a subsidiary of Duke Energy (NYSE: DUK), provides electricity and related services to nearly 1.5 million customers in North Carolina and South Carolina. The company is headquartered in Raleigh, N.C., and serves a territory encompassing more than 34,000 square miles including the cities of Raleigh, Wilmington and Asheville in North Carolina and Florence and Sumter in South Carolina. More information is available at www.duke-energy.com.

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 at: www.duke-energy.com

Media Contact: Jeff Brooks
24-Hour: 800.559.3853

Analysts Contact: Bob Drennan
Office: 704.382.4070

Analysts Contact: Bill Currens
Office: 704.382.1603


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