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Rate increase for Duke Energy customers denied

When residents gave testimony back in January adamantly opposing Duke Energy Carolinas’ rate increase request to the North Carolina Utilities Commission, many assumed their strong dissension would fall on deaf ears. 

However, the commission took a strong stance last Friday when it issued its ruling. Not only did the commission deny Duke Energy’s initial request to generate an additional $611 million a year with a rate increase for its 2 million customers, it also ordered the corporation to refund $60 million in deferred taxes to customers and to pay $70 million in fines for the coal ash disaster. 

One major point of contention for residents during the public hearings was that Duke wanted to increase customer rates to help recoup costs associated with cleaning up its 14 coal ash basins across North Carolina. Duke stated in its application that about $135 million of the requested additional revenue was intended to recover ash basin closure compliance costs incurred since Jan. 1, 2015. Duke also sought to recover $201 million toward ongoing ash basin closure compliance costs.

“The Commission imposed a $70-million management penalty against the Company in the form of a rate reduction based on the Commission’s determination that DEC’s handling of coal ash ‘placed its consumers at risk of inadequate or unreasonably expensive service,’” the order read. “In addition, the Commission found that ‘DEC admits to pervasive, system-wide shortcomings such as improper communication among those responsible for oversight of coal ash management.’ The penalty will be paid for by the Company and not by the Company’s customers.”

The commission’s order also denies Duke’s request to recover ongoing coal ash remediation costs. Instead, Duke is authorized to record these costs in a deferral account until its next general rate case, at which point the costs will be carefully scrutinized to determine the extent to which recovery from customers is appropriate.

To see the complete order, visit www.ncuc.commerce.state.nc.us.

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