GREENVILLE, S.C., Sept. 11, 2013 /PRNewswire/ -- The Public Service Commission of South Carolina (PSCSC) today approved the proposed settlement agreed upon by all the parties in Duke Energy Carolina's request to increase electric rates for its South Carolina customers.
"We are pleased the commission has approved the settlement in this case," said Clark Gillespy, Duke Energy's South Carolina state president. "We believe the settlement reflects a balance between the needs of our company and the needs of our customers.
"The approved settlement will allow us to keep the rate increase as low as we reasonably can, and still recover the investments we've made to modernize our system and to ensure safe, reliable and increasingly clean electricity for the future," Gillespy said.
Under the approved terms, the total annual rate increase will be implemented over two years. Electric rates will increase by $80.4 million, or an average of 5.53 percent, beginning Sept. 18, 2013. Rates will increase by an additional $38.2 million, or 2.63 percent, beginning Sept. 18, 2014. The total increase in rates over the two-year period will be $118.6 million, or an average increase of 8.16 percent for all customers.
The following chart illustrates the proposed average net rate increases by customer type:
Average net rate increase percentage
This table shows the average impact of the approved changes for each customer class. The specific increase for individual customers will vary depending on the rate they pay and other factors.
Under the settlement, the monthly bill for a typical residential customer using 1,000 kilowatt-hours a month in the first year would be $107.97, or an increase of $7.52 (7.5 percent). In the second year, it would be $110.76, or an increase of $2.79 (2.6 percent).
Even with the approved rate increase, the company's rates in South Carolina remain below the national average.
The 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 approved settlement was agreed upon by Duke Energy Carolinas, Wal-Mart, the S.C. Energy Users Committee, Spartanburg Water, S.C. Small Business Chamber of Commerce and the Office of Regulatory Staff (ORS). The ORS represents the public interest in a rate proceeding. Duke Energy Carolinas originally requested an average annual increase in retail revenues of 15.1 percent, or $220 million.
Under the terms of the approved settlement, the company agrees it will not implement another base rate increase prior to September 2015, absent situations such as incurring costs for new generation or except where necessary due to unforeseen extraordinary economic or financial conditions.
To ease the impact of the rate increase, the company has agreed to a one-time contribution from shareholders of $1 million to be used under the direction of the ORS to support public education initiatives and senior outreach.
Duke Energy shareholders will also provide $2.5 million to fund Share the Warmth and other public assistance programs for low income customers, as well as manufacturing competitiveness grants, economic development and/or education/workforce training programs.
To view the testimony and other materials associated with the case, go to the PSCSC website (http://dms.psc.sc.gov), choose "Docket Search" from the menu on the left, then search "By Docket Number" using docket number 2013-59-E.
Duke Energy Carolinas
Duke Energy Carolinas owns nuclear, coal-fired, natural gas and hydroelectric generation. That diverse fuel mix provides approximately 20,000 megawatts of owned electric capacity to approximately 2.4 million customers in a 24,000-square-mile service area of North Carolina and South Carolina.
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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