Duke Energy rate hike plan draws protestors

Jul. 03, 2013 @ 02:33 PM

Many Duke Energy Carolinas customers spoke out Tuesday evening at a hearing in Hillsborough about a proposed rate hike that would be phased in over three years, resulting in a increase of about $91 per year.

The hearing was one of five held in the state by the N.C. Utilities Commission, the regulatory agency for public utilities in North Carolina, to gather public input on the proposed hike. The agency will decide whether to approve the proposed increase.

Before the hearing, a small group of protestors from groups including from the climate-change focused nonprofit NC WARN held a rally against the proposed increase.

“No rate hike, no way,” sang members of a group called the Raging Grannies as part of the gathering.

“Protect us from the rapacious greed of Duke Energy,” said Chapel Hill resident Gary Wallach, who was one of close to 100 people who attended the hearing in the courthouse. He said he would support the hike if he believed it were needed for facility costs, but he said it appears to be meant to maintain cost advantages for certain business customers as well as to support shareholder profits.

In addition to people voicing concerns about the potential impact of the proposed increase on the poor, concerns about the environment and a need for more renewable energy development, economic development officials also spoke, describing the utility as a reliable energy provider that can help attract businesses and investment, and as a partner for female-owned and minority businesses.

“They send letters in the mail to tell me how to use less of their product,” said Aaron Nelson, CEO of the Chapel Hill-Carrboro Chamber of Commerce, who spoke in support of the utility’s sustainability and efficiency work.

Originally, Duke Energy Carolinas had requested a 9.7 percent average increase to bring in an additional $446 million in revenues. However, the public staff of the commission that represents consumers negotiated a lower increase stretched over time.

In the first two years, the proposed hike would mean a 5.08 percent average increase for residential customers, according to information from the utility. Residential rates would increase by 0.72 percentage points starting in the third year to 5.8 percent.

Lisa Parrish, a spokeswoman for Duke Energy, said the typical residential customer would see an increase of $7.60 per month for total monthly power bill of $110.32.

The hike also would mean industrial rates would reach 5.33 percent by the third year, while commercial rate would rate 4.41 percent by the third year.

Duke Energy proposed the increase to pay for investments in power plants, including a new natural gas-powered plant in Eden, and spending on a coal plant in Mooresboro, according to information from the utility.

The rate increase is based on a return to shareholders of 10.2 percent. Also, the utility’s negotiations with public staff also provide for a one-time, $10 million contribution to help low-income consumers in the state pay their bills.

“We’re retiring older and less-efficient coal plants and replacing them with new, cleaner, more environmentally friendly and efficient plants that we believe will serve our customers for decades to come,” Parrish said.

The requested hike comes on the heels of the commission’s approval in May of an increase for customers of Charlotte-based Duke Energy’s Progress Energy subsidiary – an increase that has been challenged by N.C. Attorney General Roy Cooper.

Previously, Cooper had also appealed a 7.2 percent increase that the commission approved to go into effect for Duke Energy Carolinas customers last year. The N.C. Supreme Court issued a ruling in April requiring the commission to consider economic conditions when setting utility rates for consumers.

However, Noelle Talley, a spokeswoman for Cooper’s office, said the commission denied a motion that asked the regulatory group to put a hold on the rate increase in light of the ruling.

During Tuesday’s hearing, Vicky Ryder, a Durham resident and a member of the Raging Grannies, said that while speakers spoke in support of the utility because it provides services consumers pay for, maintains a safe environment for workers and contributes to local charities, “not one of those speakers spoke to a need for a real rate hike.”

Ryder described the proposed increase as the third hike since 2009 so “Duke Energy can continue to stuff profits in.”  She also said that Raging Grannies members were told to hold their “serenade” outside of a commission hearing in Winston-Salem that she described as a “capricious order.”

“We will not be silenced,” she said.

Vaughan Compton of Cedar Grove raised concerns about the impact of the proposed increase on farmers. He said an account manager who worked with the agricultural community has not been available since Duke Energy’s merger with Progress Energy.

“To be honest, we can’t afford another increase,” he said. Compton said that last year, electricity on his farm cost about $35,000. He said the farm has a generator as a back-up during outages, but he said they’re costly. There was an outage a few weeks ago, and he said he felt the rural community was not a high priority for restoration of power.

John Dorward, interim executive director of the Inter-Faith Council for Social Service, asked for support for funding to be set aside to help low-income clients pay their bills. He said the nonprofit is a participant in existing financial assistance programs, but more help will be needed in light of the proposed increase.

“While the economy is showing signs of recovery, the 20 percent of Orange County (residents) who are living in poverty are not participating and will need assistance,” he said. “Please help us to help them when you make your final decision.”

If approved, the rates would likely go into effect in September. An evidentiary hearing on the proposed rate increase is slated to begin in Raleigh on Monday.