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Duke Energy Progress Requests Rate Review to Build Cleaner Energy Future

Nov. 13, 2019
Request incorporates strategy to reduce reliance on coal, a proposal to shorten remaining depreciable lives of coal plants.

Duke Energy Progress recently asked North Carolina regulators in a filing to review its rates as the company continues working to reduce carbon emissions, strengthen the grid, and improve customer experience.

The filing with the North Carolina Utilities Commission (NCUC) requests to increase annual revenues by about US$464 million for an overall average rate increase of 12.3% across all customer groups. The company's request has been reduced by customer savings of 3.2% resulting from federal and state tax reform.

The specific increase for individual customer groups would vary, depending on the rate they pay. The average rate increase from the proposed changes for residential customers would be 14.3%, while commercial and industrial customers would see an average increase of 10.4%.

If the proposal is approved by state regulators, a residential customer who uses 1000 kWh of electricity monthly would pay about US$137.73 per month, reflecting a monthly increase of US$17.29, on average.

The NCUC will ultimately set new customer rates after conducting a review process that includes multiple opportunities for public comment and a determination of whether the company's investments were prudent and in customers' best interests.

Duke Energy Progress serves 1.4 million households and businesses in central and eastern North Carolina and in the Asheville region. This filing is separate from the request made by Duke Energy Carolinas in September. The replacement of an existing coal plant with a new natural gas plant in Asheville, coupled with significant storm costs are the main differences between the Duke Energy Progress and Duke Energy Carolinas requests.

The rate increase would cover costs Duke Energy has incurred on behalf of customers to shift to cleaner energy, improve reliability and grid resiliency, and provide more convenience for customers.

"We are focused on providing cleaner, more reliable energy to customers," said Stephen De May, Duke Energy's North Carolina president. "Delivering on this commitment requires smart investments and collaborative planning as we transition to cleaner energy sources and improve the grid — all while keeping costs as low as possible and North Carolina competitive."

Shifting to Cleaner Energy

  • Duke Energy Progress is retiring the Asheville coal plant and replacing it with a highly efficient natural gas plant that is expected to be in service in late 2019.
  • Duke Energy Progress is proposing to shorten the depreciable lives of its two remaining coal-fired power plants as it focuses on cleaner energy sources, including carbon-free nuclear and renewables, and highly efficient natural gas.
  • The company is managing coal ash and safely closing ash basins at operating and retired coal-plant sites in the Carolinas. Federal and state regulatory compliance costs incurred after August 2017 to safely close ash basins at eight sites in the Carolinas are included in the proposal.

Improving Reliability and Grid Resiliency

  • Duke Energy Progress is working to improve the grid, making it stronger and more resistant to power outages from severe weather and flooding, and better protected against physical and cyberthreats.
  • The rate request includes costs to rebuild the electric system and restore power after major storms in 2018 and 2019. If Senate Bill 559 becomes law, Duke Energy Progress will seek to securitize these costs through the issuance of bonds, providing savings to customers.
  • Self-healing technology is helping to speed restoration by automatically detecting power outages and quickly rerouting power to customers. During Hurricane Florence in 2018, this technology helped to avoid more than 80,000 customer outages.
  • Duke Energy Progress has deployed nearly one million smart meters, providing customers enhanced usage data and usage alerts, improved outage detection, and enabling new programs tailored to help customers make smarter energy choices and save money.

Supporting Low-Income Customers

  • The recent rate filing, consistent with an earlier request for the Duke Energy Carolinas utility, includes a number of proposals intended to reduce the impact of rising costs on low- and fixed-income customers, including eliminating individual credit and debit card fees for residential customers when paying bills.
  • The filing proposes no increase in the monthly basic service charge. This has been the subject of concerns raised by customer advocates worried that increases in this charge posed disproportionate impacts on low- and fixed-income customers.
  • The company also requests that the NCUC convene a broad stakeholder workshop to evaluate additional regulatory programs and protections for low-income customers, ranging from voluntary programs to potential new tariffs and other initiatives.

"We know rising costs can be difficult for many customers, and particularly challenging for our customers on low and fixed incomes," De May said. "We have heard the concerns and are working to minimize the impact of these important investments on our customers least able to accommodate rate increases. We look forward to the next steps in this process."

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