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2013 rate case overview

2013 rate case overview


Duke Energy is committed to providing affordable, reliable, increasingly clean electricity. Older, less efficient coal plants are being replaced by advanced technology, powered by natural gas and clean coal. New sulfur dioxide scrubbers are dramatically reducing air emissions and meeting the strict federal and state standards.

To pay for these new facilities and capital improvements, Duke Energy Carolinas is asking the North Carolina Utilities Commission for an approximate 9.7 percent average increase in electric rates. If approved, the new rates will go into effect in early fall 2013.

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What are some of the specific investments?

Dan River Combined Cycle Station in Eden, N.C. – This 620-megawatt unit is clean, affordable and uses plentiful natural gas. Learn more about Dan River.

Cliffside Steam Station Unit 6 in Mooresboro, N.C. – This 825-megawatt coal plant employs state-of-the-art emission controls to remove 99 percent of sulfur dioxide, 90 percent of nitrogen oxides and 90 percent of mercury. The high efficiency technology means it burns less coal per megawatt-hour than most other coal units in the nation. Learn more about Cliffside Steam Station.

Oconee Nuclear Station, Oconee County, S.C. – New safety and security measures have been installed to continue to protect the plant from extreme conditions or a natural disaster. Oconee is a safe and efficient source of carbon-free electricity. Learn more about Oconee.

McGuire Nuclear Station, Mecklenburg County, N.C. – Upgrades have been made to the facility to make it more efficient and increase the amount of carbon-free electricity it produces. Learn more about McGuire.

How much will my rates go up?

Duke Energy is seeking an approximate 9.7 percent increase to electric rates from the North Carolina Utilities Commission.

Under the proposed rates, the typical residential customer using 1,000 kilowatt hours per month would see an increase of about $14.27 per month.

Customer type Proposed increase
Residential 11.8%
Commercial 9.6%
Industrial 5.3%
Lighting 5.4%

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

Are rates going up because of the merger?

No. The merger of Duke Energy and Progress Energy is not driving the need for base rate increases. In fact, the merger is already producing savings for our Carolinas customers because of changes we made in how we dispatch our larger fleet of power plants.

The proposed rate increase begins to pay the company back for the billions of dollars spent to build new power plants and other improvements to the system that serves customers.

How do Duke Energy Carolinas’ electric rates compare with other utilities?

Duke Energy Carolinas’ electric rates are well below the national average and competitive with other utilities in our region. See how we compare.

Duke Energy Carolinas' Residential Rate

When was the last time Duke Energy Carolinas increased its electric rates?

Base rates, which cover the company’s costs to operate and maintain its electric system and provide the opportunity to earn a fair return for investors, were last increased in early February 2012. Those rate adjustments paid for other investments to modernize the system that generates and delivers energy to our customers.

What is the “coal inventory rider” the company is seeking?

The coal inventory rider is separate from our overall request for a rate increae. Once inventory levels return to a more normal level, the rider goes away. Until then the rider will recover the carrying costs associated with the higher level of inventory.

What is the storm reserve fund?

Hurricane Sandy has put a spotlight on what it takes to respond to severe storms. We are asking the Commission to allow us to create a reserve fund to use only for our customers in Duke Energy Carolinas' North Carolina service territory.

Who sets the rates for electricity?

Duke Energy Carolinas is obligated by law to serve every customer in its service area with reliable electric rates approved by the North Carolina Utilities Commission. In exchange, the utility is allowed the opportunity to earn a fair return for investors who bear the financial risk of capital investment. The company's request proposes an allowed return on common equity (ROE) of 11.25 percent with a 53 percent common equity component.

Why is Duke Energy raising rates now?

We recognize that no time is a good time to raise rates. But to continue providing reliable electricity, we have to make sure our plants and equipment are up to date and comply with environmental regulations and industry standards.

Duke Energy is committed to providing affordable, reliable, increasingly clean electricity. Older, less efficient coal plants are being replaced by advanced technology, powered by natural gas and clean coal. New sulfur dioxide scrubbers are dramatically reducing air emissions and meet the strict federal and state standards.

To pay for these new facilities and capital improvements, Duke Energy Carolinas is asking the North Carolina Utilities Commission for an approximate 9.7 percent average increase in electric rates. If approved, the new rates will go into effect in early fall 2013.

Doesn’t Duke Energy change my rates every year?

A customer’s electric bill is made up of two primary components: the base rate and the fuel rate. The base rate covers the company’s cost to operate and maintain the electric system, including the opportunity to earn a fair return for investors. Base rates are adjusted periodically to more closely align the rates paid by customers with the company’s costs to serve them.

The fuel component, which increases or decreases annually, covers the company’s costs for coal, natural gas, uranium and other fuel-related items to keep our power plants running. The prices reflect the actual costs the company incurs to fuel its power plants. The fuel rate is a pass-through to customers and doesn’t include any profit. It’s typically adjusted every year.