North Carolina regulators have signed off on a plan in which Duke Energy Corp.'s 1.8 million electric customers in the state will see their bills go up next month and rise 7 percent on average over the next two years _ nearly half the increase originally sought by the utility.
The North Carolina Utilities Commission approved a two-step agreement to let Duke Energy raise rates Jan. 1 by an average 3.8 percent, followed by a 3.2 percent increase in January 2011, according to the utility.
Residential customers on average would pay a little more _ 7.5 to 8 percent over two years. Other customers will see increases from 4.8 to 7.4 percent, Duke said.
The deal, reached with the commission staff's consumer representatives in October and approved Monday by the full commission, allows Duke Energy to generate an additional $315 million annually through its first general rate increase since 1991. Duke said it needed the increase to keep up with inflation while investing in its electric infrastructure.
"We are pleased that the (commission) recognized how this settlement balances the challenging economic climate with the need for Duke Energy to raise its base rates," Jim Turner, Duke Energy's president and chief operating officer for its U.S. franchised electric and gas business, said in a Tuesday release.
Duke Energy Carolinas _ the company's electric subsidiary in North Carolina _ had initially sought an overall average rate increase of 12.6 percent. The commission's Public Staff balked and suggested a 4.7 percent increase was appropriate _ leading to the compromise.
The average residential customer using 1,000 kilowatt hours per month will pay $7.30 more per month by 2011, or a bill of $97.50, according to Robert Gruber, executive director of the commission's Public Staff.
One of the commission's seven members _ Robert Owens Jr. of Manteo _ opposed the compromise because he said it would place an "unjustified burden" on customers during a period of economic uncertainty and 11 percent state unemployment.
"Simply put, this is the worst possible time to raise electricity rates on Duke's customers and put a further drag on the North Carolina economy," Owens wrote, adding $183 million was the maximum rate increase that should have been approved.
The company made concessions to soften what would otherwise be an 8 percent general rate increase on customers, such as deferring by one year its plans to collect financing costs to build a new coal-fired generator in western North Carolina.
"We're doing everything we can to keep our rates low for our customers," Duke spokeswoman Paige Sheehan said.
Customer bills would be poised to go up by another 1 percent on average in 2012 after other fuel cost returns and nuclear insurance dividend distributions end. But it's unclear right now if rates will adjust otherwise, Sheehan said.
On the Net:
Duke Energy Corp. in North Carolina: http://www.duke-energy.com/north-carolina.asp
N.C. Utilities Commission: http://www.ncuc.commerce.state.nc.us/