AP NEWS

Rate increase for Upstate electricity reduced by regulators

May 3, 2019

State utility regulators on Wednesday reduced a proposed rate increase that would have affected 591,000 Duke Energy customers in the Upstate, and called executives of the energy company “tone deaf” for the proposal.

Duke Energy requested last year to increase its Residential Basic Facilities Rate charge from $8.29 to $28, a spike that annually would have resulted in $236.52 more per customer in energy costs.The company later agreed to lower the charge to either $11.70 or $13.09.

The Public Service Commission is expected to announce a final decision on the rate increase in coming weeks.

A directive, written by Commissioner Thomas Ervin, who represents the Upstate, cut the planned rate increase, reduced the rate of return Duke Energy could collect in the future and reduced what the company could charge customers for coal ash cleanup in North Carolina. The directive further called out Duke Energy leaders for the proposal.

[Duke Energy has two divisions in South Carolina. The PSC directive applies to Duke Energy Carolinas. Duke Energy Progress serves Florence and the Pee Dee. This directive could indicate a similar PSC directive might come for Duke Energy Progress.]

“The CEO and executive team demonstrated they were ‘tone deaf’ as to how a 238% increase in the Basic Facilities Charge would have negatively and adversely impacted the elderly, the disabled, the low income and low use customers,” the Public Service Commission of South Carolina said in the directive.

Shelley Robbins, Upstate Forever energy and policy director, said the increase to the basic facilities charge would have been unavoidable for users regardless of the amount of energy they consume.

“Because you can’t do anything to mitigate that increase, it completely disincentivizes energy efficiency and it disincentivizes solar. Our position is energy-efficiency is essential to avoiding additions to generating capacity that then have a negative impact on our upstate.”

Regulators further recommended the company’s CEO and Duke Energy executives take pay cuts.

“I am recommending a 75% disallowance of the CEO’s excessively high executive compensation for South Carolina during the test year 2017 and a 50% disallowance for the next three highest Company executives,” the directive stated.

Duke Energy CEO Lynn Good made $21.4 million in 2017 and $14 million in 2018 between her base salary and stock awards.

In March, state utility regulators traveled to the Upstate to hear public comments about the proposed increase. At least 500 people attended the public hearing in Greenville.

Duke Energy spokesperson Ryan Mosier said the energy company disagrees with some of the findings and legal conclusions made by the commission.

“We will complete a thorough review of the order once issued – including any needed clarification – and then evaluate next steps, keeping in mind that it is critical to balance the needs of our customers with smart investments that keep costs as low as possible and keep South Carolina competitive for the long term,” Mosier said in a prepared statement.

Robbins said the directive reflects a change in the Public Service Commission, which last year changed its mission to focus on citizen interests.

“In years past we probably would have seen almost a rubber stamp from the Public Service Commission, so this ruling indicates a real change in the Public Service Commission and in the Office of Regulatory Staff... Citizens who may have felt their voices didn’t matter in the past, we’re proving that their voices do now matter,” Robbins said.