Duke Energy Carolinas Reaches Agreement in the Company's Request to Increase Rates in South Carolina

CHARLOTTE, N.C., Nov. 30, 2011 /PRNewswire/ --

• If approved by the Public Service Commission of South Carolina (PSCSC), the average rate increase would be 5.98 percent
  • Base rate increase of approximately $90.7 million, or $92.8 million upon confirmation by the Office of Regulatory Staff (ORS) that Buck natural gas-fired power plant and Bridgewater hydroelectric station are both in service
  • Based upon 10.5 percent return on equity and 53 percent equity component of the capital structure
• Includes commitment to donate $4 million to AdvanceSC
• Company would agree to forego filing rate cases for two years, but would be able to adjust rates annually to reflect certain capital investments during that time

Duke Energy Carolinas, the ORS, the Commission of Public Works for the city of Spartanburg, S.C., and the Spartanburg Sanitary Sewer District have reached an agreement in the utility's request to raise base rates in South Carolina.

(Logo: http://photos.prnewswire.com/prnh/20040414/DUKEENERGYLOGO )

If approved by the PSCSC, new rates would go into effect in February 2012.  

The agreement will be considered by the PSCSC during an evidentiary hearing scheduled to begin on Dec. 7, 2011.

"This agreement is an important milestone in the case and represents a constructive compromise between the needs of the company and its customers," said Catherine Heigel, president, Duke Energy South Carolina.

Under the terms of the agreement, filed with the PSCSC, Duke Energy Carolinas agrees to:

• An increase in its base rates by $90.7 million, or $92.8 million upon confirmation by the ORS that Buck natural gas-fired power plant and Bridgewater hydroelectric station are both in service
• Allowed Return on Equity (ROE) of 10.5 percent and 53 percent equity component of the capital structure
• Forgo a general rate case filing in 2012 and 2013, but the agreement establishes a two phase process to update base rates to reflect certain current capital additions underway. In phase I the update will not exceed $45 million or a 2.74 percent increase with an effective date of Feb. 2013. The company will be able to recover the remainder or approximately 2.07 percent increase in phase II with an effective date of Feb. 2014. The two Phases would not exceed a cumulative increase of $80 million to the company's revenue requirement over the two-year period.
• Donate $4 million to AdvanceSC for economic development, low income assistance, education initiatives, and existing manufacturing support.
• Change the company's current Bulk Power Marketing profit sharing allocation to provide 50 percent to AdvanceSC, 40 percent to customers, and 10 percent to the company. The previous formula provided 50 percent to AdvanceSC and 50 percent to the company.
• If approved, new rates would go into effect in February 2012.

Impact of New Rate Plan

The list below shows the approximate average impact of the proposed agreement for each customer class. The specific increase for individual customers will vary, depending on the rate they pay and other factors.

• Residential – 7.1 percent, which would be less than $6.25 each month for customers who use 1,000 kilowatt-hours each month
• Commercial (general service) – 5.2 percent
• Industrial – 5.1 percent
• Lighting – 5.8 percent

Duke Energy Carolinas owns nuclear, coal-fired, natural gas and hydroelectric generation. That diverse fuel mix provides approximately 19,000 megawatts of owned electric capacity to approximately 2.4 million customers in a 24,000-square-mile service area of South Carolina and North Carolina.

Duke Energy is one of the largest electric power holding companies in the United States. Its regulated utility operations serve approximately 4 million customers located in five states in the Southeast and Midwest, representing a population of approximately 12 million people. Its commercial power and international business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.

Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com. 

SOURCE Duke Energy