"We are pleased the N.C. Utilities Commission has approved our settlement in this case. We believe that the settlement reflects a balance between the needs of our company and those of our customers," said Paul Newton, Duke Energy state president – North Carolina.
"We understand there is never a good time to increase rates. However, we believe this approved settlement will allow us to keep the rate increase to customers as low as we reasonably can, and still recover the investments we've made to modernize our system and to ensure safe, reliable and increasingly clean electricity for the future."
Under the terms of approval, the total rate increase will be implemented over two years. Electric rates will increase by $147.4 million, or an average of 4.5 percent, beginning June 1, 2013. Rates will increase by an additional $31.3 million, or 1 percent, beginning June 1, 2014. The total increase in rates over the two-year period will be $178.7 million, or an average increase of 5.5 percent for all customers.
The year two increase accounts for $31.3 million in costs associated with the construction of new natural gas combined-cycle generation at the Sutton Plant in Wilmington, N.C.
This table shows the average impact of the proposed changes for each customer class. The specific increase or decrease for individual customers will vary depending on the rate they pay and other factors.
The bill for an average residential customer using 1,000 kilowatt-hours (kWh) of electricity per month would increase to $111.39 from the current $104.06. That includes an increase in the basic customer charge to $11.50 per month from the current $6.75.
Even with the approved rate increase, the company's rates remain below the national average.
The entire rate order can be viewed at the NCUC website (NCUC Docket # E-2, Sub 1023).
The approved settlement was agreed upon by Duke Energy Progress and the N.C. Public Staff, which represents the public interest in a rate proceeding. Duke Energy Progress originally requested an average increase in retail revenues of 11 percent, or $359 million.
In approving the settlement, the N.C. Utilities Commission also approved the company's proposed nuclear levelization accounting as well as a new coal inventory rider allowing the company to recover carrying costs on coal inventory levels above those included in base rates.
Duke Energy Carolinas, which also serves customers in North Carolina, has a separate rate increase pending before the commission. Public hearings on that case are being held in May and June, with an evidentiary hearing before the N.C. Utilities Commission scheduled for July 8.
Modernizing the system, investing for the future
Since its last rate case in 1987, Duke Energy Progress has invested $11 billion to modernize the power plants that generate electricity and update the electric system.
These improvements have helped Duke Energy Progress achieve a reliability rate of 99.97 percent, while reducing emissions and generating electricity more efficiently than ever before. Investments in advanced emission-control technologies have helped lower nitrogen oxide emissions by more than 62 percent and sulfur dioxide emissions by more than 50 percent, since 2005.
The approved rate increase will be used to recover investments already made to modernize the system and ensure safe and reliable service for customers every day.
Additional information on the Duke Energy Progress rate case can be found at www.duke-energy.com/ncrates.