Consumer Utility Agency Says Duke Rate Request Too
Wed November 2, 2011
Consumer Utility Agency Says Duke Rate Request Too High
Duke Energy's request for a 15 percent overall rate increase in North Carolina has hit a snag. The state's key consumer advocacy agency says Duke is asking for way too much and recommends a rate boost of less than five percent.
The Public Staff of the North Carolina Utilities Commission usually does recommend a lower increase than the utility company is asking for . . . and then the agency and the utility end up hashing out a settlement somewhere in the middle.
Public Staff Executive Director Robert Gruber says a settlement in this case might be possible, but "right now we're too far apart and this may be the first case in a long time that hasn't been settled."
Gruber says Duke's request for a 15 percent overall rate increase is "not justified." He says 4.8 percent is more appropriate.
The Public Staff says some of what Duke wants to pass along to customers - corporate airplane expenses and parts of executive and lobbying salaries, for example - should not be factored into the rate increase.
Furthermore, Gruber says the outcry among Duke's customers at public hearings around the state has made it clear the rate increase would be harmful.
"Oh yes, the public is very upset by this increase - not just because of the amount but because it's coming at a very difficult time for many North Carolinians," says Gruber.
"We've listened to our customers," says Duke Energy spokesman Jason Walls. "But at the end of the day we recognize that the reality that we're in is that the rates our customers pay today are no longer sufficient to cover the company's costs to serve them."
Walls says Duke's request for a rate increase balances the needs of the customers with the cost of doing business, which includes paying executives and giving them access to a corporate plane so they can travel more efficiently.
In 2009, the utilities commission granted Duke a 7 percent rate increase spread over two years. The commission will begin hearing Duke's latest 15 percent request on November 28.