Duke Energy Carolinas Seeks First Base Rate Increase Since 1991 May 30, 2007
CHARLOTTE, NC -
Duke Energy Carolinas announced today that it will ask permission to increase revenues from North Carolina customers by 3.6 percent.
The requested rate increase, to be filed with the North Carolina Utilities Commission on June 1, varies by customer class. In the proposal, residential customers will see an average increase of 6.8 percent, or about $7.20 on a typical monthly bill (using 1,000 kwh). General service and industrial customers would see average increases of 2.0 percent or less.
“This proposed rate increase helps ensure Duke Energy Carolinas’ ability to provide safe, reliable and economic electric service to our customers while adding to and modernizing the electric infrastructure we need to support North Carolina’s continued growth,” said Ellen Ruff, president, Duke Energy Carolinas.
Such modernization will require significant capital expenditures over the next several years. Duke Energy Carolinas believes the rate increase is essential for the company to maintain a strong financial profile and attract the capital necessary for these large-scale projects.
Customers have seen increases in their bills over the years as they use more electricity and as annual adjustments are made for fuel costs. However, this is the first proposed change in base rates in 16 years.
Costs other than fuel are recovered through base rates. Since 1990, the company has invested more than $9 billion in power plants and equipment to serve customers in the Carolinas without asking for an increase in those rates.
The company has held the line on electric prices primarily by reducing operating and maintenance expenses, increasing system efficiency and adding revenue from new customers. However, today the utility’s costs continue to rise and exceed growth in customer revenue.
“While the price of just about everything has gone up, Duke Energy Carolinas’ base rates have not changed since 1991 and are more than 27 percent below the national average,” said Ruff. “Even with the requested increase, our prices will still be very competitive and lower than they were 16 years ago, when adjusted for inflation,” she said.
In the rate review, Duke Energy Carolinas will also address the manner in which the cost of service is assigned to various customer classes. Currently, some customer groups bear a greater share of that cost than is appropriate. The proposed new rates attempt to address that by allocating a larger portion of this proposed increase to certain customer classes.
Duke Energy Corp., one of the largest electric power companies in the United States, supplies and delivers energy to approximately 3.9 million U.S. customers. The company has nearly 37,000 megawatts of electric generating capacity in the Midwest and the Carolinas, and natural gas distribution services in Ohio and Kentucky. In addition, Duke Energy has more than 4,000 megawatts of electric generation in Latin America, and is a joint-venture partner in a U.S. real estate company.
Duke Energy's Carolinas operations include nuclear, coal-fired, natural gas and hydroelectric generation. That diverse fuel mix provides nearly 21,000 megawatts of safe, reliable and competitively priced electricity to more than 2.3 million electric customers in a 24,000-square-mile service area in North and South Carolina.
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.
- View more information on the North Carolina Rate Review.