By Bruce Henderson
Attorney General Roy Cooper said Wednesday he will appeal the 7 percent N.C. rate hike Duke Energy won in January.
Cooper called the rate hike, Duke’s second in the state since 2009, “wrong for N.C. consumers and businesses” in tough economic times. The appeal will go to the N.C. Court of Appeals.
“The economic realities faced by N.C. consumers must be put before company profits,” Cooper said in a statement. “Hundreds of people have contacted my office to let us know they can’t afford to pay much more for electricity in these tough times.”
Rates will go up about $7 a month for most of Duke’s residential customers. The utility has 1.8 million customers statewide.
Duke, which initially sought a 15 percent rate hike, said it is disappointed in the appeal.
Spokeswoman Betsy Conway said the settlement with the commission’s Public Staff, which represents consumers, balanced Duke’s need to recover $4.8 billion in capital spending with economic hardships faced by customers.
“We understand that the timing was challenging,” Conway said. Duke agreed in the rate settlement to donate $11 million to help low-income customers with energy costs.
Cooper’s appeal does not challenge Duke’s spending on power plants and pollution-control upgrades. It focuses instead on the 10.5 percent return on equity, or investor profit, the utilities commission approved.
It claims there’s not enough evidence in the commission’s findings that such a return is reasonable. The filing does not say what rate of return the attorney general would accept.
State law says the commission should approve a rate of return “considering changing economic conditions and other factors” such as construction projects by the utility.
“The rate of return testimony should balance the rate of return investors expect against the economic conditions and returns that Duke’s customers are experiencing,” the filing said. None of the expert witnesses who testified on the rate of return discussed the economic conditions customers face, it added.
Most members of the public who spoke at commission hearings protested the rate hike.
“The commission essentially backed into its finding … by noting that the stipulated return on equity falls between the parties’ negotiating positions and further noting that none of the (return) witnesses objected to the stipulated figure,” Cooper’s appeal said.
The attorney general’s staff was among several formal parties to the rate case, including representatives of large customers, advocacy groups and consumer groups. While most of those parties signed settlement agreements, or did not oppose the agreements, the attorney general did not.
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NC WARN strongly supports Attorney General Cooper’s appeal of the Duke Energy rate increase — the 10.5% rate of return is far too high in a struggling economy, when most residential and commercial customers are struggling to pay electric bills.
Note that Cooper’s action is largely a response to the many of you whose public testimonies and letters called Duke’s profits, rate request and overall expanionist business model out of line with what is actually happening in today’s economy and environment.
Please send SHORT NOTES of appreciation for Cooper standing up for the public interest to his Information Director Noelle Talley: email@example.com
Intervenors from the rate case have 20 days to join the appeal. Co-intervenors NC WARN, NC Justice Center and the NC Housing Coalition are considering such action.