Duke Energy Carolinas Reaches Proposed Settlement in Its Request to Raise Base Rates in North Carolina Oct. 20, 2009
CHARLOTTE, N.C. -
Duke Energy Carolinas earlier today filed an agreement with the North Carolina Public Staff in the company’s request to raise base rates for the first time since 1991.
The proposal must be reviewed and approved by the North Carolina Utilities Commission in a hearing scheduled for tomorrow. Changes to rates associated with this proposal are expected to be implemented on Jan. 1, 2010.
“We believe this agreement is a reasonable compromise that benefits our customers and the company. It strikes a balance between today’s unique economic challenges and the need to ensure a reliable, affordable and clean energy supply for the future,” said Jim Turner, Duke Energy’s group executive, president and chief operating officer of U.S. Franchised Electric and Gas. “Our objectives in this case were clear – to be sensitive to our customers, to better align our rates with expenses and to maintain a strong financial position as we continue to modernize the system. We appreciate the willingness of the Public Staff to negotiate a fair agreement that balances the needs of communities, customers and the company.”
Under the terms of the agreement, a base rate increase of $315 million (or 8 percent) will be phased in over two years. However, additional steps outlined in the proposal help lower the total impact to customer bills to an increase of approximately 7 percent in the near term. The bottom line average increase to customer bills in 2010 would be 3.8 percent and an additional 3.2 percent in 2011.
Additional highlights of the proposed settlement include:
- 10.7 percent Return on Equity and a capital structure of 52.5 percent equity and 47.5 percent long-term debt.
- Three riders relating to fuel costs, fuel inventory, and insurance costs, when netted against the base rate increase proposed in the settlement, would reduce the total impact to customer bills to 7 percent over two years.
- The company will begin collecting financing costs related to the Cliffside modernization project beginning Jan. 1, 2011.
- An agreement not to file another rate case before 2011 with any changes to rates taking effect no earlier than 2012.
“When I speak with our customers, they are quick to applaud our company for offering a reliable product at highly competitive rates. They also recognize that we’ve invested nearly $5 billion since 2006 to deliver that level of service,” said Brett Carter, president of Duke Energy Carolinas. “Even with this proposed increase, our rates will remain far below the national and regional averages. We know price matters to our customers and to companies that may choose to move to North Carolina.”
Money-Saving Opportunities for Customers
On June 1, Duke Energy launched a number of energy efficiency programs to help customers in the Carolinas save power and money. In North Carolina, the average residential customer can save about $5 a month by participating in energy conservation programs.
From programs to help qualified customers improve energy efficiency in their homes, to cash incentives for purchasing energy-efficient equipment, these programs are first steps in helping residents and businesses lower their energy bills. Other programs will enable customers to save even more by allowing the utility to manage their energy use in times of high demand. More information is available at http://www.duke-energy.com/north-carolina/savings.asp.
Duke Energy Carolinas
Duke Energy Carolinas owns nuclear, coal-fired, natural gas and hydroelectric generation. That diverse fuel mix provides approximately 19,000 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 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: http://www.duke-energy.com/.