Phased-in rates approved for Duke Energy Carolinas' North Carolina customers support new, more efficient power generation and continued high reliability
- Rates will increase a total $205 million, or 4.5 percent, for the first two years; increasing by 0.6 percent thereafter
- Approved rates include a return on equity (ROE) of 10.2 percent and a capital structure of 53 percent equity and 47 percent debt
- The company will make a one-time $10 million shareholder contribution to agencies that provide energy assistance to low-income customers
- Duke Energy Carolinas agrees not to seek new base rates in North Carolina until 2015 at the earliest, except for certain circumstances
CHARLOTTE, N.C., Sept. 24, 2013 /PRNewswire/ -- The North Carolina Utilities Commission (NCUC) today authorized an increase in electric rates for Duke Energy Carolinas' North Carolina customers.
The revenue increase was initially agreed upon in a settlement between Duke Energy Carolinas and the North Carolina Public Staff, which represents consumers.
Electric rates will increase by $205 million, or an average of 4.5 percent, for the first two years of the increase. Rates will increase by an additional $30 million, or 0.6 percent thereafter.
The total increase in rates after September 2015 will be $235 million, or an average increase of 5.1 percent for all customers.
After September 2015, the bill for an average residential customer using 1,000 kilowatt-hours (kWh) of electricity per month will increase to $110.32 from the current $102.72. That includes an increase in the basic customer charge to $12.19 per month from the current $9.90.
The commission approved the settlement with one modification to rate design. The commission ordered the company to continue to further recombine a specific rate between industrial and commercial customers. The company continues to review the order.
Even with the approved increase, the company's rates remain below the national average.
"We're pleased the N.C. Utilities Commission has approved our revenue request," said Paul Newton, Duke Energy state president – North Carolina. "The decision reflects a balance between the needs of our company and those of our customers."
"This increase is critical to the company's modernization plan to address increasingly stringent environmental regulations, and also to retire and replace aging power plants," said Newton. "Today's order allows us to keep the rate increase as low as we reasonably can while still recovering these investment costs."
New capital investments include two state-of-the-art facilities that produce more electricity with fewer emissions:
- A new 620-megawatt natural gas plant in Eden, N.C., that uses cleaner, low-cost natural gas to replace older, less efficient coal-fired generation.
- Cliffside Steam Station Unit 6, with advanced technology for emission control and efficiency, now in operation in Mooresboro, N.C. It burns less coal per megawatt-hour of electricity while removing 99 percent of the sulfur dioxide, 90 percent of nitrogen oxide and 90 percent of mercury.
"As part of the settlement we reached in this case, we'll make a one-time $10 million shareholder contribution to agencies that provide energy assistance to our low-income customers. We are committed to providing financial assistance to those most in need who struggle to pay their power bills," said Newton.
The NCUC also approved the company's proposed nuclear levelization accounting, as well as a new coal inventory rider allowing the company to recover carrying costs on coal inventory levels above those included in base rates. The rider terminates in 18 months or earlier if inventory levels return to a 40-day supply.
The entire rate order can be viewed at the NCUC website.
Cautionary Statements Regarding Forward-Looking Information
This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management's beliefs and assumptions.
These forward-looking statements are identified by terms and phrases such as "anticipate," "believe," "intend," "estimate," "expect," "continue," "should," "could," "may," "plan," "project," "predict," "will," "potential," "forecast," "target," "guidance," "outlook" and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include but are not limited to: state, federal and foreign legislative and regulatory initiatives, including costs of compliance with existing and future environmental requirements or climate change, as well as rulings that affect cost and investment recovery or have an impact on rate structures or market prices, the possibility that the impact of compliance with material conditions imposed by regulators related to the Progress Energy merger could exceed our expectations, continued industry consolidation, the timing and extent of changes in commodity price, interest rates and foreign currency exchange rates and the ability to recover such costs through the regulatory process, where appropriate, the results of financing efforts and the ability to obtain financing on favorable terms which can be affected by various factors, including credit ratings and general economic conditions, and the ability to successfully complete future merger, acquisition or divestiture plans.
Additional risks and uncertainties are identified and discussed in Duke Energy's and its subsidiaries' reports filed with the SEC and available at the SEC's website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Duke Energy
Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at: www.duke-energy.com.
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SOURCE Duke Energy