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Duke Energy defends rate charges, settlement — Charlotte Observer

By Bruce Henderson

Duke Energy Carolinas defended its handling of disputed charges in its North Carolina rate case Thursday, saying most of them were justified even as it made further concessions.

Duke officials testifying before the North Carolina Utilities Commission again acknowledged accounting errors but said the approximately $200 million of revenue Duke gave up in reaching a proposed settlement of the case more than made up for them.

Duke sliced more charges out of the case Thursday, for a total of about $474,000 since striking the settlement with the commission’s Public Staff. In the agreement, the staff took $189 million out of the $446 million Duke initially sought from ratepayers.

John Runkle, an attorney for N.C. WARN, which claims Duke attempted to overcharge customers, asked Duke official Carol Shrum if the settlement simply “makes everything OK.”

“The settlement is a process of negotiation and the company has made significant concessions in that process,” said Shrum, Duke’s director of rates and regulatory strategy. “We believe that settlement is firmly in the best interest of customers.”

The settlement removes most of the $871,000 in political contributions, sponsorships and charitable donations that WARN challenged. Shrum testified that Duke is willing to remove the remaining $40,000 “in the spirit of compromise.”

Duke also agreed Thursday to delete a $156,000 charge for an engineering report on the crippled Crystal River nuclear plant in Florida. Duke had considered the bill part of its due diligence in assessing its merger with Progress Energy, which had owned the plant.

“What are we going to do to make sure this doesn’t happen again?” commission Chairman Edward Finley asked Shrum and Danny Wiles, Duke’s director of regulated accounting, referring to the accounting errors.

Wiles said Duke will review its account-coding procedures, preventive controls and methods to catch future mistakes.

“Please look into that. The commission’s concerned,” Finley replied.

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