Public Utilities Commission of Ohio Approves Settlement Agreement for Duke Energy's Electric Security Plan Dec. 17, 2008
Duke Energy Ohio announced today that the Public Utilities Commission of Ohio (PUCO) has approved the settlement agreement on its electric security plan under Ohio's new energy law. The agreement establishes generation rates for 2009 through 2011.
The settlement agreement was reached with most intervening parties, the Staff of the PUCO and the Ohio Consumers' Counsel in October and was then sent to the PUCO for approval.
Under the settlement terms, the base cost for generation service will increase by approximately 2 percent of the total bill annually in 2009 and in 2010 for residential customers, and each year from 2009 through 2011 for non-residential customers.
Additionally, the bill for generation service will continue to include cost-based trackers for fuel and purchased power, capacity purchases and environmental compliance expenditures.
Because fuel costs have dropped, total electric prices will decrease effective Jan. 1, 2009.
Under the terms of the settlement, the typical monthly cost for a residential customer using 1,000 kilowatt-hours will be $117.06 in January 2009, compared with the current monthly bill of $121.64 – a decrease of $4.58. This comparison does not include another rate action pending before the commission that we expect will impact rates in the second quarter of 2009.
"We are very pleased with the commission's decision," said Julie Janson, president of Duke Energy Ohio. "Duke Energy recognizes the monumental economic challenges confronting people and businesses. We believe this net price reduction will be a welcome relief to our customers during these trying financial times.
"In addition, our plan will also provide Duke Energy with the resources necessary to develop energy efficiency programs that will help all customers reduce overall usage and energy bills," she said.
Over the three-year term of the agreement, Duke Energy will contribute $2.1 million to assist low-income customers pay their electricity bills. Area Community Action Agencies will administer the funds for distribution to eligible Duke Energy customers. In addition, low-income weatherization and energy efficiency funding will increase to $1 million per year.
The PUCO also approved a new infrastructure modernization program to install Smart Grid technology. The new technology is an interactive digital system that allows the company to communicate with customers about their energy usage, monitor power quality, identify power outages, turn service on/off remotely, read meters continuously, and support energy efficiency. As a benefit of this program, tighter distribution system reliability targets have been established.
The agreement also replaces the existing energy efficiency tracker with a new Save-a-Watt model that will provide incentives to Duke Energy based on the success of its energy efficiency programs and the avoided cost of building new generation. The new energy efficiency programs will help customers lower their overall bills and will help Duke Energy achieve the significant energy efficiency targets established by Ohio's new energy law.
The settlement includes plans to develop an Electronic Bulletin Board that will help customers compare competitor pricing for electric generation supply. The agreement also establishes a new rider to fund economic development investments that the PUCO may approve in the future.
Duke Energy's Ohio operations deliver electricity to approximately 690,000 electric customers and natural gas service to approximately 425,000 customers.
Duke Energy, one of the largest electric power companies in the United States, supplies and delivers electricity to approximately 4 million U.S. customers and natural gas service to approximately 520,000 customers in its regulated jurisdictions. The company has approximately 35,000 net 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 net megawatts of electric generation in Latin America, and is a joint-venture partner in a U.S. real estate company. 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.