By Bruce Henderson
An advocacy group has challenged Duke Energy’s plan to give large commercial and industrial customers a break on most of the 7.2 percent North Carolina rate hike granted in January.
Duke asked state regulators in May to cut 6 percent of the rate hike for some of its biggest customers. Duke said the one-year rate break – the $13 million cost of which shareholders would pay – was intended to help struggling companies.
The N.C. Waste Awareness and Reduction Network, based in Durham, says Duke might really be offering kickbacks to win support for the rate hike and its expected merger with Progress Energy. The N.C. attorney general has appealed the rate hike. The merger needs state approval.
The N.C. Utilities Commission hasn’t ruled on Duke’s rate rebate request.
WARN cited a lawsuit that claimed Duke and Cinergy Corp., with which it merged in 2006, paid “unlawful and substantial” amounts to industrial customers in Ohio in return for their support in a 2004 rate case. A federal court dismissed the case, saying it lacked jurisdiction, but an appeals court last week reinstated the lawsuit.
Duke says the agreements with the companies were legal and that it will “vigorously defend ourselves” in court.
Conversations with N.C. commercial and industrial customers began during merger and rate negotiations last year but didn’t end until May, Duke spokesman Jason Walls said. That’s when its rate-break request was filed.
“The intent of the rider is to provide relief to the large businesses and manufacturers because they play such a role in the economic vitality of this region,” Walls said.
WARN says the rebates could discriminate against other customers and, if extended, be paid for by ratepayers instead of shareholders.
“Who were they talking to, and why was it a select few?” said executive director Jim Warren.