On Wednesday, Franklin will host the North Carolina Utilities Commission (NCUC) for a public hearing regarding Duke Energy’s rate-hike request. The public hearing, which is one of five being held throughout the state, will take place at 7 pm at the Macon County Courthouse in Courtroom A. Residents from all of the western counties are strongly urged to attend the hearing, as the Macon County site is one of only two hearings which are being held in the western part of the state, the other being held in Marion on Tuesday.
The proposed 17 percent rate increase which will be discussed on Wednesday will be in addition to a five percent rate increase on electricity statewide, which was formally approved by the NCUC on August 9 and became effective September 1.
According to Betsy Conway, spokesperson for Duke Energy, the five percent increase which has already become effective, is the result of the billing system being set up to have two separate components that appear on the customer's monthly bill. Conway explained that one component is fuel rating, and that its increase in recent years justifies Duke's five percent increase. This component pays the company to maintain their facilities and, according to Conway, is the “price incurred to generate power across the system.” Based on an annual report that the company is required to make and the current fuel costs at that time, those rates are adjusted accordingly. Conway noted that these rates fluctuate depending on the market.
In July of this year, Duke Energy Carolinas filed a request with the NCUC to increase electric rates by approximately $646 million, or 17 percent.
Approximately three-fourths of the request is driven by capital investments the company made in the Carolinas’ electric system over the past two years.
“Since 2009, we’ve spent $4.8 billion to modernize the system and comply with environmental regulations,” said Brett Carter, president, Duke Energy North Carolina. “Also, we continue to aggressively manage the day-to-day costs of running the business,” he said. “For example, last year our power plants set records for operational excellence and we did it while holding operating and maintenance expenses essentially flat.”
This fall, when rates are adjusted to reflect fuel costs, a typical residential customer who uses 1,000 kilowatt-hours per month of electricity would pay approximately $97.05. If the company’s rate increase is approved, that bill will increase by approximately $19.
After the public hearings are completed throughout the state, the NCUC and Duke Energy Carolinas will deliberate about the proposed increased, and if approved, the increase is expected to become effective in February of 2012.