Duke Energy Progress is asking the North Carolina Utilities Commission to review its electric rates with an eye toward reducing the company’s dependence on coal, improve the reliability of the electric grid and reduce the impact of rising costs on low-income customers.
That review, if approved as presented, would result in an average rate increase of 12.3 percent for Duke customers. For residential customers, the average increase would amount to about 14. percent, while the increase for business and industrial customers would be closer to 10 percent.
That’s slightly less than the 14.9 percent Duke requested in 2017. In response to that request, the Utilities Commission approved an average increase of 4.7 percent and it said the company could increase rates another 1.3 percent beginning in 2022.
Based on the 12.3 percent increase, the average residential customer who used 1,000 kW hours of electricity per month would see their monthly bill climb from about $120 to $137. If approved, that would generate approximately $464 million in additional revenue for the company.
The rate request also includes money to pay for what is called a depreciation study for Person County’s two coal-fired power plants, the last two plants of their kind in the Duke Energy Progress footprint.
That study would determine the cost of increasing the rate at which Duke Energy depreciates the two plants. If the study suggests the company could afford to depreciate the plants faster, it might allow the company to begin the process of retiring those plants sooner. Retiring the two plants would also help the company meet its goals of reducing its carbon footprint. Currently the company plans to retire both of them by 2029.
Retiring the plants doesn’t necessarily mean Duke would reduce its presence in Person County.
“We still have significant assets in those facilities. We have a lot of transmission lines that will remain and we know those are important to the county,” Duke Energy district manager Tanya Evans said.
Duke Energy has retired other coal-fired plants and found new ways to use those facilities to generate energy. The Asheville plant is currently being retired and it will be renovated to produce electricity from natural gas.
Whether that is an option for Person County’s two plants is unclear. Evans said each plant has different characteristics that may allow it to be used in a way that another plant could not be. Whatever happens, Evans said the company is going to have to find other ways to produce the electricity that the two Person County plants now generate. Whether that continues to happen on site or somewhere else is uncertain. “We’ve got 10 years to get our plan clarified to understand how it could move forward,” Evans said. “We will work with regulators and stakeholders in our community so we all have an idea of how this is going to move forward.”
Company officials say Duke Energy Progress earned $1.02 billion in profits last year. A portion of that money is returned to investors under a formula that regulates how much of a return the company can provide. Currently, that rate of return 9.9 percent, but the new rate filing seeks to increase that to 10.2 percent.