State regulators approve Duke Energy rate hike; see how you will be affected

ASHEVILLE — The North Carolina Utilities Commission has approved a rate hike for Duke Energy Progress, an increase that is less than half of what the energy company requested of the state regulatory board last year.

The commission's decision effectively raises the monthly rate for residential customers from $11.13 to $14. It is less than the $19.50 increase requested last year by Duke Energy Progress, the subsidiary that services power for areas that include Asheville and Buncombe County.

Duke initially sought to charge customers an additional $477.5 million annually, much of which is allocated to pay for infrastructure upgrades and coal ash cleanup at sites like the utility's Lake Julian power plant.

The standard Duke Energy Progress residential customer spends $108.27 a month in energy costs based on 1,000 kilowatt hours of usage. Under the decision, the rate will go up for customers, though Duke said it is unclear what the comparable rate will be until everything is finalized by the commission.

In its decision on Friday, the commission said the company's 1.3 million customers in the state will pay $232.4 million over a five-year period for coal ash basin closure costs. The request was met with a protest last year in Asheville, in which residents rallied against it ahead of a public hearing at the Buncombe County Courthouse.

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Commissioners also handed down a $30 million penalty to Duke for what it calls a "management penalty" over its handling of coal combustion residuals — a penalty that will be paid for by its shareholders, not customers. In a news release, the commission said it found DEP "admits to pervasive, system-wide shortcomings such as improper communication among those responsible for oversight of coal ash management."

Duke Energy spokesperson Meredith Archie said the company is evaluating the commission's order and its impacts on customer rates. While Duke Energy Progress services mostly the eastern part of North Carolina, it also covers a pocket in Western North Carolina that includes Asheville and Buncombe County.

The company said it will submit updated revenue numbers and customer rate impacts to the commission for final approval.

The cumulative increase for retail customers is estimated to be 4.7 percent over the next four years with a 6 percent average increase thereafter, Archie said.

"We had the opportunity to hear from customers through public hearings and other opportunities to comment on the rate request," she said. "As their energy provider, we constantly work to balance the desire for cleaner more reliable energy with smart investments that keep costs reasonable. This transparent and thorough process with the NCUC and other stakeholders appears to have produced a result that balances the needs of customers and the company."

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Duke Energy said last year the hike largely covers money it already has spent, much of which was invested in efforts for clean energy generation systems. Also included in the figure is the management of coal ash and the recycling of byproducts of burning coal.

The company has been excavating coal ash from two basins in Asheville since 2007. It plans to finish another by 2022.

The request as well as the decision were met with varying degrees of opposition dating back to last year. Among the dozens of statements of consumer positions filed to the commission, customers questioned the legitimacy of the hike, lamented its impact on elderly and low-income residents of the region and questioned why the cost of coal-ash cleanup falls on consumers.

"Why should NC Utilities Commission Commissioners support more rate hikes by Duke Energy?" Boyd Thomas said in a Feb. 6 email to the commission. "They would also be supporting the poor and elderly people who do not the money to pay these charges for power, having their power cut off for Duke Energy's love of money.

"When does raising these power rates, get to be raising them too high?"

Archie, however, notes that customer rates will "remain below the national average even after new rates go into effect."

Another Duke Energy subsidiary, Duke Energy Carolinas, will go before the commission next week. It also has requested a rate increase, this time by an average of 13.6 percent.

Duke Energy Carolinas serves about 2 million customers in the Carolinas with many in the middle part of North Carolina near the I-85 corridor and some in the westernmost part of the state.