Retreating Duke Energy Withdraws Kickback Scheme – News Release from NC WARN
- July 24th, 2012
NC WARN had contested proposal used to gain support for the Duke-Progress merger by refunding rate hikes to biggest customers
Durham, NC – Under cover of a public storm involving a corporate merger scandal that has shaken the largest U.S. power company, Duke Energy last week withdrew a proposed program to refund to a select group of large customers nearly all of last fall’s controversial seven percent rate hike that was levied against all Duke Energy Carolinas customers. Today watchdog group NC WARN applauded the withdrawal after having moved in June to block NC Utilities Commission approval of the proposal because it could force smaller customers to subsidize heavy energy users.
In a filing late last Wednesday, Duke asked the Commission to forget the proposed Pilot Economic Recovery Rider, saying it needed reconsideration after being flooded with requests from big energy users. Last month the utility sought to block NC WARN’s right to participate as the sole public intervener in the case and the group’s request for evidentiary hearings.
NC WARN Program Director Pete MacDowell said today, “Duke must have realized this did not pass the smell test. And because it ties directly to the secret deals that still must be unsealed in the ongoing merger scandal, this program promised more public backlash if Duke had pressed forward.”
When first proposing the new rebate scheme in May, Duke said it arose from settlement discussions with certain industrial customers in the both the merger and 2011 rate cases. In the merger case, the watchdog group and media organizations have called for the Commission to comply with the NC Public Records Act by unsealing at least 15 secret deals.
Regarding the withdrawn proposal, NC WARN had argued that although Duke offered to fund the initial pilot phase with roughly $13 million of shareholder money, the utility would almost surely claim success and seek to expand the program by forcing smaller customers to subsidize it. The group also argued that many of Duke Energy’s residential and small business customers are also facing financial hardships and would benefit from significant rate discounts.
In 2006, similar actions and negotiated settlements in a Duke Energy rate case in Ohio led to antitrust litigation. Recently, the Federal 6th Circuit Court of Appeals reinstated the lawsuit on whether those payments constituted unlawful antitrust actions.