Duke Takes Back Rate-Break For Big Customers
6:05 pm
Fri August 24, 2012

Duke Takes Back Rate-Break For Big Customers

Duke Energy is abandoning a plan hatched several months ago to give a one-year rate-cut to some of its biggest customers.

Duke Energy underestimated the allure of a bargain. It set aside $13 million to give some of its large industrial customers a boost in the form of a six percent rate reduction. The pilot program would last one year - and maybe longer if it was successful.

Then, like the gigantic lines that form outside the mall on Black Friday, demand quickly overwhelmed Duke.

Better just to call it off, says spokesman Jason Walls.

"It came down to the fact that there were so many folks that were interested and we felt that it really wasn't fair to just offer it to those first-come, first-served," says Walls. "The better approach and the right thing to do, was to withdraw it and look for other ways to help a broader base of our customers manage their energy costs."

If it seems capricious that a company can propose something, get a bunch of PR mileage off it and then just take the whole thing back, that's actually how the system is set up. Utility companies have to run their plans by state regulators, and sometimes they get an early signal that they're in for a fight.

Such was the case with Duke's plan to give its biggest customers a boost.

"Our preliminary assessment was that we had some problems - some serious issues with it - and would be opposing it," says Dianna Downey, an attorney for the North Carolina Utilities Commission Public Staff, which is the state agency charged with looking out for power customers.

The primary concern was that Duke's proposal might discriminate against other customers who wouldn't get the same rate cut. That undoubtedly influenced the company's decision to ditch the plan. Happens all the time, says Downey.

"It's very typically for us to communicate with a utility as to what we're thinking about their filing to either give them a chance to withdraw it or amend it or whatever," says Downey. "So that's not unusual at all."

It seems that "take-backs" are as fair in the utility industry as they are on the playground.

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