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I confess I haven’t been paying as much attention to this as I probably should, as it’s an important story: Duke Energy, a massive corporation that rakes in billions of dollars of profits each year, wants you to pay more to pad its bottom line (and help clean up its coal ash mess).
WHAT IT MEANS:
- First, some background: last month, the state Utilities Commission, which regulates Duke, allowed a 6.2 percent increase on residential customers (industries and business will see a hike of about half that) starting April 1: “Customer rates will go up again in four years, even if Duke Progress does not seek another rate hike in the near future. The rate hike for the first four years is reduced as Duke Progress refunds customers about $180 million to account for a corporate tax cut state legislators enacted. So the ultimate impact of the commission’s February ruling will be a 7.3% rate hike for residential customers, about 4.7% to 6.1% for commercial customers and 5.6% for industrial customers.”
- This rate increase was substantial but still about half of what Duke wanted: “Duke's Duke Energy Progress unit sought an extra $419 million a year to help pay for the state-mandated cleanup of coal ash ponds at its North Carolina power plants, replace older plants with natural gas-fired plants, develop solar power sites and ‘harden’ systems to speed recovery after storms. The coal ash costs were the most controversial, and the North Carolina Utilities Commission decided the company should be allowed to charge customers for $232.4 million in costs already incurred.”
- Yesterday, Duke officials were back before the Utilities Commission, seeking an additional rider that would allow it to raise rates even higher—about 1.5 percent every year for the next decade—eventually raising rates by as much as 25 percent of residential consumers: “This ‘grid rider’ would start relatively small, bringing in another $36 million or so in the first year. The impact would grow quickly as Duke Energy implements changes that the company says would help the system weather storms, allow solar installations to feed electricity back into the grid, protect against cybersecurity attacks and give customers more real-time information about their energy usage.”
- “Duke officials say the grid upgrades are needed modernizations. Opponents argue that they're a company effort to boost profits, since Duke is allowed to make about a 10 percent return on new construction. This is a key to the company's revenue strategy, attorneys argued before the commission Wednesday. Duke reported more than $3 billion in profit last year, and its most recent earnings report pitched shareholders an expected 4 to 6 percent dividend growth and an 8 to 10 percent total shareholder return. The rider is in addition to the $600 million in new annual revenue Duke has requested for various other changes, including an ongoing shift from coal-fired power to natural gas and costs associated with cleaning up coal ash pits outside the older facilities. That $600 million figure, which would translate to a 16.7 percent rate increase for residential customers, has since come down some through negotiations with the Public Staff, which represents ratepayers in cases before the Utilities Commission.”
I don’t claim any expertise on regulatory matters. But I do know that Duke is a huge and well-connected corporation with fat profit margins, and that company wants residential consumers to pad its bottom line even more.
Related: Assistant Secretary for the Environment Sheila Holman
told lawmakers that approval of the Atlantic Coast Pipeline, for which Duke Energy has partnered with Dominion Energy, had nothing to do with the controversial mitigation fund the developers agreed to. Still, legislative Republicans want to hold hearings
—and force Governor Cooper or his top aides to testify under oath—about the agreement.