Attorney general seeks a stay in Duke Energy rate increase

Apr. 29, 2013 @ 09:26 PM

North Carolina's attorney general asked a regulatory panel Monday to stay a rate increase for Duke Energy that the state Supreme Court rejected earlier this month.

Attorney General Roy Cooper filed a motion Monday asking the N.C. Utilities Commission to stay the 7.2 percent increase that it granted in January 2012. The increase raised electricity rates for 1.8 million households and businesses and would generate an extra $309 million in annual revenue for Duke.

"In other words, the commission should place consumers in the same position as they were before the commission granted the rate increase later found to be legally flawed," Cooper wrote in the motion. "It would be inequitable, especially in these economically challenging times, for Duke to continue to collect rates from consumers pursuant to a legally deficient order while awaiting further proceedings following the reversal and remand."

It was Cooper who had appealed the increase to the state Supreme Court, which said the commission didn't adequately consider the increase's negative impact on consumers. The court rejected the increase and sent it back to the commission for consideration.

The rate increase has been in effect since Feb. 1, 2012, and has remained in effect even though the Supreme Court sent it back to the commission.

"The commission must take customer interests into account when making" a return on equity determination, justices wrote in their April 12 decision.

The rate increase included a 10.5 percent profit for the company subsidiary that operates in the western half of the state. Under the increase, the typical residential bill jumped by $84 a year to almost $1,236.

A spokeswoman for Duke Energy, which became the nation's largest electricity provider after last year's takeover of rival Progress Energy, said Monday that the utility's legal and regulatory teams are reviewing Cooper's motion.

After the Supreme Court decision, Duke Energy North Carolina President Paul Newton said he was confident that the commission would approve the rate increase. He said it was significant that the Supreme Court decision focused on the proper return on equity because the 10.5 percent ROE was "fair and well-reasoned."

Cooper also looked to the court's ruling on the return on equity as reason to stay the increase, saying the expert testimony previously presented to the commission didn't apply the analysis that the justices said is needed.

"In short, there is insufficient evidence in the record that would allow the commission to adequately perform the analysis that the Supreme Court held is required," Cooper wrote.

Cooper's motion was filed the same day that Gov. Pat McCrory appointed two new members to the utilities commission and replaced Robert Gruber, executive director of the Public Staff, with attorney Chris Ayers. According to the website of the law firm where he works, Poyner Spruill, he focuses on the representation of electric, telecommunications, gas, water, and wastewater public utilities.