Hearings set on Duke rates

March 10, 2019
The nearest Duke Energy Progress power generation facility is the H.B. Robinson nuclear plant located north of Hartsville.

FLORENCE, S.C. – If Duke Energy Progress receives approval from the Public Service Commission, power bills in the Pee Dee could be rising.

Public hearings on the requested rate increase are scheduled in Florence on April 1 and in Sumter on April 2.

How much is the proposed rate increase?

If the rate increase were to go into effect, a “typical residential customer using 1,000 kWh” would see an increase of $17.91 per month beginning June 1, another $1.60 per month beginning June 1, 2020, and another $1.81 per month on June 1, 2021. The total increase after June 1, 2021 would be $21.32 per month.

In a fact sheet provided, Duke Energy Progress says that the average rate increase for residential customers would be 12.5 percent. Small general service customers would receive a 14.5 percent rate increase, medium general service customers would receive a 6.7 percent increase and large general service customers would receive a 9.6 percent increase.

Duke Energy Progress has also proposed an increase in its fixed monthly charges from $9.06 per month to $29 per month beginning June 1. This increase is reflected in the total monthly increase of $17.91.

Why does Duke say it needs the rate increase?

Duke Energy Progress is seeking to increase its revenues by $59 million, or approximately 10.3 percent, in 2019, by $5.1 million in 2020, and $5.8 million 2021 to account for recent “work to modernize the electrical system, generate cleaner power, responsibly manage and close coal ash basins and continually improve service to customers.”

“We work hard every day to keep costs reasonable for our customers and to avoid an increase to customer bills whenever possible,” Duke Energy said in a fact sheet about the rate increase. “Our continued work to modernize power plants, generate cleaner power, responsibly manage coal ash and other severe weather incidents has made it necessary for Duke Energy Progress to seek a change to customer bills to pay for these important investments.”

Duke states in its application, “The Company’s request is driven by capital investments and environmental compliance progress made by the Company since the 2016 Rate Case, including the further implementation of DE Progress’ generation modernization program, which consists of retiring, replacing and upgrading generation plants; investments in customer service technologies; and the Company’s continued investments in base work to maintain the Company’s transmission and distribution (‘T&D’) systems.”

The cost of capital was also mentioned in the application. Basically, Duke Energy Progress argues that the better it looks financially, the lower its cost of borrowing is. The increase in the basic facilities charge is part of the overall request. So if everything is approved, the typical residential customer bill would increase from $122.49 to $140.39 per month.

In an email, Duke spokesman Ryan Mosier said, “… part of the overall proposal is to bring the fixed basic facilities charge closer to representing the true costs of serving our South Carolina customers. This charge is intended to cover the cost of the facilities the company has installed in order to be able to deliver electricity to a customer’s home.”

Mosier added that the basic facilities charge does not vary with usage. He added that if only the basic facilities charge increase is approved, the increase will be offset by a decrease in the price per kilowatt hour, meaning the average bill should stay the same.

The application further notes costs associated with deployment of Duke Energy Progress’s new bill system, new infrastructure, nuclear development and compliance with new environmental regulations.

Who would be affected?

Duke Energy Progress’s service territory includes approximately 32,000 square miles including northeastern South Carolina, namely the counties of Florence, Darlington, Dillon, Marion, Marlboro, and some of Williamsburg.

In northeastern South Carolina, Duke Energy Progress serves approximately 169,000 customers. The company generated approximately $5.1 billion in revenue during the 2017 calendar year. Approximately 11 percent, or $561 million, of this revenue is derived from South Carolina customers according to Duke Energy Progress’s application to the Public Service Commission.

The subsidiary known as Duke Energy Progress was formed when Duke Energy acquired Progress Energy in the 2011. Progress Energy, in turn, was formed from the merger of Carolina Power and Light and Florida Progress Corporation in the early 2000’s.

Duke Energy Carolinas, a subsidiary of Duke Energy that serves 591,000 customers in the upstate, has also requested a similar increase.

Who decides if the rate increase is implemented?

The South Carolina Public Service Commission will decide.

The South Carolina Public Service Commission functions essentially as a court for cases involving utilities and other regulated companies, according to its website. The Public Service Commission has jurisdiction over matters pertaining to the investor-owned electric and gas utility companies. It is governed by seven commissioners, one from each of the seven congressional districts in South Carolina. The commissioner from the Seventh Congressional District is G. O’Neal Hamilton from Bennettsville.

There are two hearings scheduled for public views on the rate increase.

When are the hearings and what happens afterward?

One hearing is scheduled for 6 p.m. Monday, April 1, in the Florence County Council chambers in the Florence County Complex.

Another hearing is scheduled for 6 p.m. Tuesday, April 2, at Nettles Auditorium on the campus of USC-Sumter. Nettles Auditorium is at 200 Miller Road in Sumter.

The commissioners will be on hand to listen to testimony from those wishing to testify. Under the code of judicial conduct, the commissioners are not permitted to answer questions or to discuss individual cases. Those testifying will be limited to three minutes.

An evidentiary hearing has been scheduled for April 11 in Columbia at the Public Service Commission.

In terms of timing, the last request of Duke Energy Progress was filed on July 1, 2016, and a final order approving a settlement agreement was issued on Dec. 21, 2016.