State regulators approved a rate increase late Friday for Duke Energy Progress that’s less than half the amount the power company requested last year. As part of the approval, the N.C. Utilities Commission also said the utility can increase a flat monthly charge households pay from $11.13 to $14, less than the $19.50 the company requested.
The effect of the rate increase on a typical household is not clear, but would likely translate to less than $6 a month, based on previously available information. Duke said it is evaluating the decision. A typical Duke Progress residential customer currently pays $108.27 a month, based on 1,000 kilowatt hours of usage.
Duke Energy Progress has 1.3 million customers in the state, including Raleigh, Asheville and the eastern part of the state. It’s one of the two electric utilities in the state, along with Duke Energy Carolinas, operated by Charlotte-based Duke Energy.
In its 278-page decision, the Utilities Commission also said Duke Energy Progress customers would be on the hook for $232.4 million for coal ash cleanup costs as part of the rate increase, one of the more contentious aspect of the case. But the Utilities Commission spared customers from paying for the company’s future coal ash cleanup expenses. The Utilities Commission said it would decide the matter of who pays for future cleanup of coal-burning power plant residue in a subsequent rate hearing.
However, the commissioners imposed a $30 million management penalty on the company for mishandling coal ash problems over many years. Duke utilities has stored coal ash in open pits for decades, raising concerns that trace elements of toxic materials percolated into underground drinking water sources. The concerns ultimately caused the company to provide some residents with bottled water as a precaution. Shareholders, not customers, will pay for the penalty.
Duke Energy Progress last summer asked to raise rates by 14.9 percent, totaling $477.5 million a year. The request would have added $20 a month to the typical household bill, to $124.65 a month.
In September the company reduced the request to $419.5 million, a 9.5 percent average rate increase, which would translate to about $12 more a month for its Raleigh customers. On Friday the Utilities Commission granted less than half the $419.5 million the company had requested.
A coalition of consumer and clean energy advocates, including the North Carolina Justice Center and North Carolina Housing Coalition, represented by the Southern Environmental Law Center, intervened in the case to oppose the Duke Energy Progress rate increase.
“We are disappointed that the commission did not stand up for customers – especially those struggling to pay their bills, which are now more than 1.4 million households,” said Gudrun Thompson, senior attorney at the Southern Environmental Law Center. “While Duke is enjoying record profits, the commission undercut customers’ ability to reduce their energy use and lower their bills with cost-effective energy efficiency.”
Duke Energy Carolinas is in the midst of a rate increase request with a public hearing coming up on Tuesday, Feb. 27. The company wants to raise rates by an average of 13.6 percent, which would increase a typical residential bill by $18.72 a month, to $122.68. Duke Energy Carolinas has 2 million customers in North Carolina, including in Chapel Hill and Durham.