Largest part of the proposed increase would pay for new generation that has replaced older, less-efficient coal plants
Impact of request lessened by lower fuel charges that take effect this month
Customers would still have lower rates than 1988, when adjusted for inflation
GREENVILLE, S.C. – A growing service area and expanded customer energy needs have led Duke Energy Progress to seek its first base rate increase in 28 years for its 168,000 South Carolina customers.
The utility has filed a request with the Public Service Commission of South Carolina (PSCSC) to increase revenues by about $79 million, for an overall increase of 14.5 percent.
“We work every day to keep costs as low as possible for our customers,” said Clark Gillespy, Duke Energy state president -- South Carolina. “We have made significant investments in recent years to build a smarter energy infrastructure to meet the needs of a growing customer base, and to comply with rigid environmental requirements at the state and federal level. These investments are the main reason for the proposed increase.”
The impact of the requested increase would be reduced by the $16 million decrease in fuel charges that took effect July 1. The decrease reflects the benefit of the new, highly efficient natural gas generation plants that represent the largest portion of this request.
This effectively reduces the overall impact on customer bills from 14.5 percent to 11.6 percent.
Even with the proposed bill increase, customers will pay lower rates than they did in 1988, when adjusted for inflation. To put this in perspective, the average cost of a gallon of gas 28 years ago was $1.08, and a loaf of bread cost about $1.25.
Under Duke Energy’s proposed new rate structure, the typical monthly bill the average residential customer pays will be $12 less than the national average.
The average rate increase from the proposed changes for residential customers is 15.4 percent, while commercial and industrial customers would see an increase of 14.3 percent. The specific increase for individual customers will vary, depending on the rate they pay.
If the proposal is approved, the typical residential customer who uses 1,000 kilowatt-hours (kWh) of electricity monthly would pay about $121.37 per month – an increase of $16.60 -- beginning on Jan. 1, 2017.
Why raise rates?
The company has retired older, less-efficient coal plants that do not have state-of-the-art emissions controls, and replaced them with cleaner, natural gas-fueled plants.
In recent years, Duke Energy Progress has invested about $1.7 billion to complete natural gas-fueled units at the Smith Energy Complex in Richmond County, N.C., the H.F. Lee Complex in Wayne County, N.C., and at its Sutton facility near Wilmington, N.C.
The rate proposal also reflects:
An investment of $176 million in four solar sites that provide emissions-free energy to Carolinas homes and businesses.
A portion of the Duke Energy Progress acquisition of the North Carolina Eastern Municipal Power Agency’s (NCEMPA) share of jointly owned generating assets in 2015 for $1.3 billion. The purchase will provide long-term fuel savings for Duke Energy Progress customers.
Investment in cleaner operations through the installation of pollution control equipment.
Detailed plans to safely close coal ash basins.
The purchase of the NCEMPA assets includes a portion of the Brunswick Nuclear Plant (both units), Harris Nuclear Plant, Roxboro Plant (unit 4) and the Mayo Plant (unit 1), or about 700 megawatts of generating capacity.
These facilities also provide energy to customers in South Carolina.
For more details on the company’s request to increase rates, visit www.duke-energy.com/SCRates.
Helping our customers
“We know energy is a significant monthly expense for many customers,” Gillespy said. “We are committed to helping customers who are struggling to pay for basic needs by providing programs and tools to reduce their energy costs and keeping their power on.”
One way the company does that is by educating low-income customers on ways to save energy through the Neighborhood Energy Saver Program. The program provides energy assessments and installations of energy-saving measures at no cost to the customer. The average household participating in this program can save more than $35 per year on energy costs.
Additionally, the company’s Energy Neighbor Fund has provided more than $3 million in assistance over the life of the program to help low-income families in South Carolina cover home energy bills, regardless of heating source.
Duke Energy Progress will demonstrate to the PSCSC why the proposed increase is needed through a very public regulatory review process that traditionally includes an opportunity for public hearings, as well as a final evidentiary hearing in Columbia, where the commission will consider written and oral testimony. The company expects this process to be complete by the end of the year.
People can review the testimony filed in support of the company’s request at the PSCSC website (search using Docket No. 2016-227-E): https://dms.psc.sc.gov/
About Duke Energy Progress
Duke Energy Progress owns nuclear, coal-fired, natural gas and hydroelectric generation. That diverse fuel mix provides about 12,900 megawatts of owned electric capacity to approximately 1.5 million customers in a 32,000-square-mile service area of North Carolina and South Carolina.
Duke Energy is one of the largest electric power holding companies in the United States. Its regulated utility operations serve approximately 7.4 million electric customers located in six states in the Southeast and Midwest, representing a population of approximately 24 million people. Its Commercial Portfolio and International business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States.
Headquartered in Charlotte, N.C., Duke Energy is an S&P 100 Stock Index company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at duke-energy.com.
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