On Tuesday, the public had its chance to voice any opposition they had towards Duke Energy and their proposed rate hikes. Duke Energy has proposed a 9.7 percent increase in its electric rates. The North Carolina Utilities Commission is holding hearings across the state to allow the public to have their say. Franklin was the site of one of these hearings — the only one west of Asheville — and people filled the courtroom designated for the hearing at the Macon County Court House Tuesday night.
Duke officials say that the increase is critical to its ongoing modernization plan to address increasingly stringent environmental regulations and retire and replace aging power plants.
“It allows us to maintain a strong financial position, which enables us to continue investing in a more reliable, efficient and clean electric system for our customers,” said a Duke official in a statement.
The increases are said to provide a path for the company to recoup $4.8 billion in investments in new power plants and equipment as well as continuing down a path for more reliable, efficient and clean electric systems for customers.
According to Lisa Parrish, media specialist of corporate communications for Duke, this will be the last step in a threepart phase to upgrade its facilities.
“Some of these facilities were built before World War II,” said Parrish. “We want to be able to provide energy efficiently and cleanly, which these older facilities make difficult.”
2012 rate hike sent back to commission
On April 12, N.C. Attorney General Roy Cooper took Duke's last hike of 7.2 percent before the state's Supreme Court on behalf of the citizens. The court struck down that rate hike and sent it back the Utilities Commission to further examine the request.
“The Supreme Court agreed that focusing only on profits without taking customers into consideration isn't a fair way to set utility rates,” said Cooper. “Families and businesses that have paid unfairly high power bills over the past year deserve a break.”
Cooper filed a motion with the commission that would allow those who paid more for power as a result of that hike to receive lower rates moving forward as compensation.
“It would be inequitable, especially in these economically challenging times, for Duke to continue to collect increased rates from customers pursuant to a legally deficient Order,” Cooper said.
He also hoped that the ruling would be considered in future decisions to “lower utility company profits and consumer rates.”
The court kicked the 7.2 percent increase back to the commission for more consideration, but it does not necessarily mean that anything has to change, says president of Duke Energy North Carolina, Paul Newton.
“It is important to note that the order is limited to the commission’s consideration of the ‘proper’ Return on Equity. It does not require any changes to the current rates and rate structure approved by the Commission last year. We will continue to monitor the situation and provide any information required by the Commission or others.”
Groups emerge to oppose newest rate hike proposal
Though time will tell what becomes of 2012's hike, the new issue is the 9.7 percent increase that Duke has since requested.
Aside from the citizens who have voiced opinions since the proposal was made, a number of organizations have taken a stand in opposition as well.
N.C. WARN, a nonprofit organization that works to combat climate change and monitors utility practices across the state, has been a key combatant to the rise in costs. According to data provided by the group, this would be Duke's third rate hike in the Carolinas since 2009 and would boost residential rates by 13.9 percent and 8.2 to 9.9 percent for small businesses with large industrial corporations only seeing an increase of three percent.
“If successful, Duke's latest hike would bring households rates to a level 30 percent higher than in 2009,” according to flyers being distributed by the group. “That trend will continue if politically appointed utilities commissioners let Duke keep financing its dirty energy growth model on the backs of smaller customers.”
Another organization, Customers Against Rate Hikes, points to business strategies used by Duke to attract large companies as a tactic to allow regular citizens to foot the bill for rate increases.
“Duke keeps down the rates of its largest customers—including energy-hogging data centers like Apple, Google, and Facebook— by shifting costs of new power plants onto smaller customers. Then, by offering rockbottom rates and other incentives, Duke entices more high-load, low-jobs data centers into North Carolina, driving up demand for even more power plants that otherwise would not be needed—and raising small customer rates yet again.”
A third group that has been fervently trying to bring awareness to the issue is AARP – N.C. AARP is a national, nonprofit, nonpartisan organization that serves citizens over the age of 50 in a variety of ways and boasts 37 million memberships. Their argument is that the majority of people in that age group are on a fixed income and citing the 30 percent increase since 2009, a spokesman said that the consumer must be properly considered before raising the rates.
“We started getting involved with this because we're hearing from our members every day about their need for affordable energy,” said AARP communications director Steve Hahn. “We have to consider that most seniors have gotten very small Social Security income increases each year with last year's increase being at 1.7 percent, so this 11.8 percent increase just for utilities alone is something that they find tough to deal with.”
In hopes of putting a stop to any further increases AARP hopes its members and others will attend the public hearings being held around the state.
“We hope that people who are concerned will weigh in with the Utilities Commission, the public voice matters,” he said. “In these economic times, an increase like this is not sustainable. We're facing rising costs when it comes to healthcare, food, gas, and just about everything else so as consumers we need to make our homes more efficient, but we also need to set reasonable rates.”
The Canary Coalition has also been extremely vocal in opposition to the rate increases that have been floated by Duke Energy.
“This is another in the series of rate hikes that we have experienced in the last several years,” said executive director and one of the founders, Avram Friedman. “Because of a law that was passed in 2007, rate payers will be forced to pay for their business plan as power plants get built. We feel that rather than financing that scheme, the Utilities Commission should be restructuring rates so that people and businesses that invest in energy efficiency and conservation are rewarded by creating lower rates for those customers and create higher rates for those who waste energy.”
Franklin hosts WNC's public hearing
Many officials from Duke Energy were present at Tuesday’s meeting along with members of the N.C. Utilities Commission who hosted the hearing and who will also ultimately decide whether the requested increase is justifiable or not.
The structure of the hearing was beneficial to the public whether in support of Duke and their decisions or in opposition. Franklin native Lisa Leatherman, Duke Energy district manager in WNC and a 26-year employee, gave the opening statement for the organization by describing Duke's goals and the path to achieving them.
“At Duke we are replacing our old coal units built in the mid 1900s with new efficient natural gas and clean coal technology,” Leatherman said. “These state of the art facilities use less fuel and generate more electricity. The rate request is all about paying for our new investments to serve our customers for decades to come. Our plants are among the highest performing in the nation. Our focus is on efficiency.”
Citizens of the Carolinas have saved about $89 million through joint dispatch of fuel purchase she says as well as benefitting from Duke's involvement in the community.
“As an attempt to be a good neighbor, that means participating in local events, supporting local projects, and responding to the issues that customers face. Recreation and tourism are critical for the economic development in this region and Duke partners in a variety of ways with WNC communities of businesses. We actively support recommendations for enhanced public recreation such as boating access to streams, angler trails, and wildlife viewing areas, and working with local stake holders to schedule recreational flows to accommodate white water rafting, kayakers and drift boat anglers.”
After the opening statement, those who had signed up to speak were given their chance to voice concerns.
Joe Deddo of Almond, N.C. was the first to approach the podium. Deddo, a small business owner, has six meters on the property he owns that is used as a campground and has been negatively affected by rate increases in the past and asked the commission to reject Duke's proposal.
“I'm a working man. Actually, I'm just a poor working man,” said Deddo. “I've got 30 sites where people pay $18 to put up their tents and my power bill last July was $1,000. I've got camper sites for $26 and only on the weekends are we full. If you do the math, it's hard to make it.”
Reminding the commission of the trend that Duke has been following, Deddo ended his statement that this had all been done before.
“I'm trying to figure out what testimony you all really want and what would help my cause. I'm not sure because we were just here, what, a year and a half, two years ago?”
Franklin Town Alderman Bob Scott was the next to address the commission, thanking everybody for their attendance and also local Duke employees for their service, but pointed to the corporate side of the organization as the reason for his concern.
“One of the things I'm concerned about is the political contributions that Duke Energy is making,” said Scott. “It seems as though that is a fairly well kept secret and it's a matter of public concern and a matter that the Public Staff and N.C. Utilities Commission should look into. Duke Energy is a public utility provider and in a way, that makes us all a partner and we have nowhere else to turn for electricity.”
He also referred to ways that Duke Energy has brought in large amounts of money that did not reflect back to the consumers.
“Another concern of mine is the Needmore Project. Duke Energy sold 4,400 acres of land through its Cresent Land Company to the Nature Conservancy for $19 million. That land once belonged to private citizens who believed a dam would be built there when our Corps bought it through Nantahala Power years ago. This is a concern of mine because the $19 million didn't come back to the rate payers.”
Not everyone in attendance was there to ridicule Duke, in fact, some were there to point out the good things that the organization has done. Sutton Bacon of Bryson City and CEO of the Nantahala Outdoor Center cited the economic contributions that Duke helps bring to the area.
“The impact of whitewater sports is about $85 million to the local economy and about 1,000 jobs,” he said. “This would not be possible without Duke Energy.”
This fact was also talked about more in depth by Jackson County resident, Adam Bigelow—only in opposition to the hike.
“I want to address the speaker from the NOC,” he said. “Just so we know, the wonderful access points in the rivers and lakes that Duke Energy has built are beautiful. I have used them. Thank you, but you had to do it. It was part of the agreement. It was in trade for licensing of the rivers for 50 years. 50 years to make electricity. This isn't something they did out of the kindness of their heart. In fact they're a corporation, they don't have a heart. They are a business.”
Again, alluding to the fact that this was the second meeting in the same room as two years ago, he pointed to the fact that like other businesses, Duke is looking to increase profits.
“They are a monopoly, a for profit business. The item that they sell is electricity and the way they generate that electricity is a leading contributor to climate change and toxic and polluted rivers in WNC. It causes coals seams. I'm thankful to live in WNC and I'm equally lucky that we don't have coal seams running underneath us because they would take the tops off of Wesser Bald and Wayah Bald and fill in the valleys in between them to go after an 18-inch seam of coal that would provide power for maybe an hour or two. We have better ways of doing things now. We have science, we have technology, we don't need more time to look into it. It's ready to go.”
Franklin resident Bill Crawford also supported the abandonment of the use of coal.
“Duke continues to invest in coal,” he said. “There's no such thing as clean coal.”
Joan Maki of Franklin helped bring the focus back to the people who will feel the rate hikes the most.
“I'm concerned about how Duke sets their rate structures,” she said. “It is not fair to charge big businesses less for their electricity and pass that cost on to small and medium businesses and residential customers. When you give these rate increases, we don't think about all of the areas that are connected. Our schools here are broke. We're $1.5 million short in our budget. They can't afford more electrical charges. These costs and even the ones for the big businesses are going to be passed on to the consumer. The cost of goods will go up, the cost of transportation will go up. It's not just that $15 a month out of our pocketbooks, it's all of the other increases that will be brought about as a result of the rate increases.”
World War II veteran and electrical engineer David Waters of Franklin brought the hearing to an end with his closing comments and a final push for the commission to reject the increase.
“I am a veteran and I took an oath to defend and protect this nation and I consider this rate increase to be a regressive tax on the people of Western North Carolina,” said Waters. “It hits the poor and the middle class. Duke Energy has to hold up their end of the social contract. They should eat these costs.”