CHARLOTTE, N.C. - Duke Energy Carolinas and Progress Energy Carolinas, both subsidiaries of Duke Energy Corp., are seeking regulatory approval to begin returning merger-related savings to customers.
Filings made today with the North Carolina Utilities Commission (NCUC) and Public Service Commission of South Carolina (PSCSC) are a significant first step in the company's promise to deliver $650 million in savings to customers over the next five years.
The filings propose total customer rates be reduced by around $70 million over the next 12 months as a result of projected fuel and joint dispatch savings.
The filings also will result in an additional $19 million in annual customer savings by removing power plant capacity costs from customers' base rates related to new wholesale sales. This is part of the company's interim mitigation plan approved by the Federal Energy Regulatory Commission (FERC).
These base rate savings will be in effect as long as the company's interim mitigation plan is needed, which is estimated at approximately three years.
This interim mitigation provision involves power purchase sale agreements with certain counterparties. It is designed to address the FERC's market power concerns. Duke Energy will build new transmission lines over the next three years to permanently address those concerns.
"Since the merger closed a month ago, we have been working to keep our commitment by immediately delivering savings to customers," said Keith Trent, executive vice president for regulated utilities. "We are scheduling and operating our generation plants as a combined fleet to obtain maximum efficiency, and using the expertise and best practices of the combined company to lower fuel costs for our customers."
Although Duke Energy Carolinas and Progress Energy Carolinas will continue to operate as separate utilities in the two states, the merger agreements allow the companies to collectively dispatch its power plants to reduce customers' rates.
Annual updates will be made with the NCUC and PSCSC to focus on the merger-related joint dispatch agreement and other fuel-related savings designed to further reduce customers' power bills.
The specific reductions to customers' bills depend on the rate they pay and other factors. Here are examples of the potential savings, based on the average residential customer who uses 1,000 kilowatt-hours per month.
Progress Energy Carolinas
- North Carolina residential customers -- Approximately 85 cents per month, bringing the current total bill from $106.00 to $105.15.
- South Carolina residential customers -- Approximately 80 cents per month, reducing their current total bill from $101.57 to $100.77.
Duke Energy Carolinas
- North Carolina residential customers -- Approximately 92 cents per month, reducing their current total bill from $105.86 to $104.94.
- South Carolina residential customers -- Approximately 81 cents per month, reducing their current total bill from $106.77 to $105.96.
If approved by the commission, the new rates take effect on Sept. 1, 2012.
Duke Energy Carolinas owns nuclear, coal-fired, natural gas and hydroelectric generation. That diverse fuel mix provides approximately 19,500 megawatts of owned electric capacity to approximately 2.4 million customers in a 24,000-square-mile service area of North Carolina and South Carolina. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at: www.duke-energy.com.