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After months of hearings with state administrators and receiving feedback from the public, Duke Energy has reached an agreement to cut its proposed residential rate increase request from around 18% to around 9.5%.
Why it matters: Duke Energy is the dominant supplier of electricity for North Carolina residents, and the rates it charges customers are set through a highly regulated process with the N.C. Utilities Commission.
- The utility's initial request of an 18% increase over two years became a flashpoint in state politics and led to several protests from customers angered over rising prices.
Driving the news: The agreement with N.C. Public Staff — a state agency that represents customers — applies to Duke Energy Carolinas, a subsidiary of Duke Energy that represents much of the western half of North Carolina and about half of the Triangle.
State of play: The deal still needs to be approved by the N.C. Utilities Commission, but Duke Energy has agreed to pursue similar terms for Duke Energy Progress, which covers much of the eastern portions of North Carolina and Raleigh.
- That rate would go in effect on Jan. 1 if approved by the Utilities Commission.
- Duke Energy Carolinas and Duke Energy Progress are in the process of merging, and this is expected to be the last time Duke Energy applies for a rate increase in the state as two separate entities.
By the numbers: Duke Energy Carolinas' proposed settlement with the state would increase rates for residential users by 5.9% in Year 1 and 3.6% in Year 2 for a cumulative increase of 9.5%.
- Overall, for all customers, the rate increase would net out at 7.4% over two years.
- In dollar amounts, that would translate to a typical residential electricity bill of $157.15 per month increasing by $6.53 a month in the first year and a further $4.66 per month in the second year, according to a Duke Energy spokesperson.
Zoom in: The settlement between Duke Energy and N.C. Public Staff was co-signed by the N.C. Sustainable Energy Association, the Carolina Industrial Group for Fair Utility Rates, Walmart and Microsoft.
- The settlement also asks Duke Energy shareholders to contribute $10 million to low-income bill assistance and weatherization programs.
What they're saying: In a statement, Duke Energy acknowledged the public's pushback to its initial rate increase, saying customers have made it clear to the utility that they are struggling with rising costs.
- "In light of the cost pressures our customers are facing, along with continued conversations with other stakeholders, we felt we had to do more," Kendal Bowman, Duke Energy's North Carolina president, said in a statement.
Between the lines: The settlement also agrees to continue discussions on the creation of a large load tariff, which could potentially apply a separate rate for large electricity users like data centers.
- "We have had constructive discussions about creating a tariff for large load customers in North Carolina, and we've agreed to continue working in expedited fashion," Bill Norton, a spokesperson for Duke Energy, said in a statement.
- He added, however, that Duke Energy's own analysis has found that "large load customers like data centers" will pay for the increased costs to serve them under the current plan and also contribute revenue that lower costs for other customers. "That will remain the case regardless of whether a large load tariff is established or not," he said.
