Homeowners/renters bear brunt of proposed Duke Energy rate hike

07/23/2013 8:54 PM

07/23/2013 9:03 PM

Power bills for homeowners and renters would increase slightly more than 10 percent over two years – much more than business customers – under a proposed settlement of Duke Energy’s third rate hike in South Carolina since 2010.

The settlement, which must go before the Public Service Commission, was announced late Tuesday by Duke and the Office of Regulatory Staff, the state agency responsible for protecting the public interest in utility matters.

The proposal would permit Duke to raise rates in two stages beginning Sept. 18 for 540,000 customers in South Carolina, most of them in the Upstate.

It would cut Duke’s original request to collect another $220 million a year by 46 percent.

A monthly residential power bill for 1,000 kilowatt-hours under the agreement would rise $7.52, to $107.97, during the first year and another $2.79 the second year.

For retailers and other commercial customers, power bills would grow an average of 6.42 percent over the two years, while factories would pay an average of 7.34 percent more over the period.

The first rate hike would take effect Sept. 18 and the second exactly one year later, if the settlement terms hold.

“This is really the best we can hope for,” said Frank Knapp, president of the South Carolina Small Business Chamber of Commerce, which intervened in the case on behalf of its members.

Knapp said small business customers, a subcategory of commercial customers, would pay 3.42 percent more over the two years under the settlement terms.

Knapp testified in the rate hike case on behalf of small businesses, and another group, the South Carolina Energy Users Committee, testified on behalf of manufacturers.

No one intervened specifically on behalf of residential customers, said Dukes Scott, executive director of the ORS, though the state chapter of the AARP campaigned to boost turnout at public hearings.

Even with an average increase of more than 10 percent, residential customers aren’t paying as much as Duke needs to collect in order to provide them with electricity and collect a “reasonable” rate of return, Scott said.

Duke agreed not to implement another rate hike before September 2015, though it could apply for one and trigger the regulatory process before then, under the settlement terms.

The Charlotte-based power company also agreed to donate $1 million to support public education and senior outreach and another $2.5 million for public assistance for low-income customers and to support manufacturing competitiveness, economic development or education and workforce training.

Clark Gillespy, Duke’s South Carolina president, said the settlement would allow the company to recoup what it has spent improving its electrical system.

“We believe the settlement reflects an appropriate balance between the needs of our company and those of our customers,” he said in a statement.

Duke hadn’t implemented a general price hike for 19 years until 2010, when it raised residential rates more than 9 percent while decreasing industrial rates nearly 5 percent.

In 2012, the company was allowed another overall rate increase of 6 percent.

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