Progress Energy Carolinas Seeks Rate Decrease in North Carolina

Proposed changes would result in nearly $50 annual savings for customers

Jun 04, 2010, 16:15 ET from Progress Energy Carolinas

RALEIGH, N.C., June 4 /PRNewswire-FirstCall/ -- For the second straight year, Progress Energy Carolinas has filed a request to lower the rates paid by its North Carolina customers. If approved by the N.C. Utilities Commission, the change will save a typical household nearly $50 next year.

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The rate request has three main parts: a decrease in the monthly amount customers are charged for fuels used to generate electricity ($5.60 reduction on a residential 1,000-kilowatt-hour bill); an increase of $1.53 in the monthly charge used to pay for energy efficiency and demand-side management programs; and a decrease of 5 cents a month in the charge for renewable energy.

The net impact of the three filings is a monthly reduction of $4.12 on a 1,000-kWh residential bill, or $49.44 over 12 months. If approved as filed, the average net reduction will be 4.6 percent for commercial customers and 4.4 percent for industrial customers.

"We are very pleased to be able to lower prices for our customers," said Lloyd Yates, CEO and president of Progress Energy Carolinas, which serves 1.5 million customers. "We know the lingering recession has taken a toll on many of our customers, and we're focused on keeping electricity affordable, reliable and environmentally sound for the households and businesses that depend on us."

For the residential customer using 1,000 kWh, the total monthly bill will be reduced to $101.89 from the current $106.01, if the request is approved by the Utilities Commission. The new rates are scheduled to take effect Dec 1.

Progress Energy maintains a diverse mix of power plant resources – including nuclear, coal, natural gas, oil and hydroelectric energy – to maintain a reliable supply of electricity for the utility's customers while keeping fuel expenses as low as possible.

The costs of coal, natural gas and other fuels, which had risen sharply in the middle of the last decade, have decreased in the last two years, and Progress Energy Carolinas has taken advantage of the opportunity to negotiate lower-priced fuel contracts on behalf of customers. Average customer electricity use also has stabilized, due in part to the generally slow economy, and that has reduced overall electricity production costs.

The fuel portion of the company's rates is adjusted annually by the Utilities Commission to reflect the actual cost of fuel the utility uses to produce electricity to meet customer demand. By law, Progress Energy does not make a profit from the fuel charge. The company also files annually to recover the costs of implementing programs designed to help reduce energy consumption and save customers money on their energy bills, as well as the portion in customer rates that pays for renewable energy investments.

Under North Carolina's energy law passed in 2007, Progress Energy must provide an increasing percentage of energy sales from renewable resources. The requirement grows from 3 percent in 2012 to 12.5 percent in 2021. The company has signed contracts to purchase energy from a number of solar photovoltaic arrays, biofuels facilities and other renewable sources, and continues to scour the market for additional renewable energy opportunities.

Apart from fuel, energy-efficiency and renewable energy expenses, the other main component of customer rates is the base retail rate. Progress Energy Carolinas has not sought an increase in the base rate since 1988.

Progress Energy encourages customers to learn all they can about using energy wisely – to save energy and money. Customers can save up to 20 percent on their energy costs by making simple changes at home. Cleaning air filters, replacing incandescent light bulbs with compact-fluorescent bulbs, adjusting the thermostat and sealing windows and doors can result in noticeable savings. For more energy-efficiency tips, visit www.savethewatts.com. Customers also can learn about energy-efficiency programs and incentives at www.progress-energy.com.

Progress Energy (NYSE: PGN), headquartered in Raleigh, N.C., is a Fortune 500 energy company with more than 22,000 megawatts of generation capacity and approximately $10 billion in annual revenues. Progress Energy includes two major electric utilities that serve about 3.1 million customers in the Carolinas and Florida. The company has earned the Edison Electric Institute's Edison Award, the industry's highest honor, in recognition of its operational excellence, and was the first utility to receive the prestigious J.D. Power and Associates Founder's Award for customer service. The company is pursuing a balanced strategy for a secure energy future, which includes aggressive energy-efficiency programs, investments in renewable energy technologies and a state-of-the-art electricity system. Progress Energy celebrated a century of service in 2008. Visit the company's website at www.progress-energy.com.

SOURCE Progress Energy Carolinas



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