Fuel, efficiency impact Duke Energy bills

Dec. 30, 2013 @ 08:11 PM

Utility fuel and efficiency riders adjusted Duke Energy Progress bills for the better this month. It was a welcome relief as the arrival of winter’s cold means more energy use, compounding the 6.5-percent hike in general residential rates that took effect earlier this year.

Meanwhile, the legal wrangling continues over the rate hikes that were approved by the N.C. Utilities Commission for Duke Energy Progress in May and Duke Energy Carolinas in September.

The approved rate hike program includes a second-stage increase of an additional percentage point scheduled to take effect in June 2014.

Duke Energy is seeking to consolidate hearings on separate appeals by state Attorney General Roy Cooper, according to Lisa Parrish with the Duke Energy corporate communications office.

“All of the rate case appeals involve common issues,” Parrish said. “For that reason, we believe it is appropriate the cases be consolidated.”

Rates in Vance, Granville and Warren counties are impacted nearly the same as all other Duke Energy Progress customers, according to Len Green, a staff attorney with the N.C. State Utilities Commission.

Green said that aside from very minor differences that depend on what energy type different customers might draw on, rates apply on a per-kilowatt hour base rate.

According to Green, an annual review of three rate level riders resulted in a small amount of relief to residential customer bills this month, six months after the residential rate hikes took effect.

“The riders include fuel cost, renewable energy purchases — such as purchase of solar power — and the utility’s energy efficiency program,” Green said. “The net result this year was a reduction in the rider costs.”

Green added that there was no change to the base rates. The decrease impact to a typical customer using 1,000-kilowatt hours in December was a savings of $2.12 from a $111.39 bill, or about 2 percent, according to Green.

The base rate changes that took effect in June pushed a 1,000-kilowatt hour monthly bill up to the $111.39 level from what had been $104.06 before. The basic customer charge of $11.50, up from $6.75, is included in that calculation.

Retail rates went up 4.5 percent this year. When the additional percentage point takes effect on June 1, the full 5.5-percent hike to retail customers will be realized. Similarly, the rate hike to residential customers will be at a total of 7.5 percent more than the May 2013 rate, when the added percentage point is added.

Parrish said Duke Energy officers realize that to the customer, there is no good time for a utility to request a rate hike.

Duke Energy recommends energy savings efforts for reducing bills. According to company-released information, most of the rate increase request is a matter of passing on fuel cost increases that the utility pays.

The appeals by Cooper question if Duke Energy shareholders through their holding company should receive a 10.2-percent profit, or return equity, on invested capital, and a 53-percent equity capital structure, according to documents filed with the state Supreme Court in October.

Parrish confirmed the October filing follows a similar appeal regarding Duke Energy Progress filed in July.

The Duke Energy response so far has been to seek a consolidation of the appeals procedure, filing a motion for that request on Friday.

Parish said she could not comment on the pending legislation or what impact a Supreme Court ruling might have on increased bill amounts already paid if the rate increase is reversed or adjusted.

“I can’t address a hypothetical in that case,” Parish said. “It is still being litigated.”

Green explained that there are many possible outcomes from the pending case, including possible retroactive refunds or corresponding bill credits if the decision goes in favor of Cooper.

“It really depends on what the commission has to do,” Green said.

Contact the writer at mfisher@hendersondispatch.com.