NC WARN says proposed “Economic Recovery Rider” may be effort to gain support for rate hikes and corporate merger
Durham, NC –NC WARN today filed a challenge at the NC Utility Commission against a new Duke Energy program that would refund, to selected large customers, nearly all of last year’s controversial 7.2% rate hike. The watchdog group said the new program arose from the 2011 rate case, that Duke has a troubling history of secret deal-making, and that the Economic Recovery Rider might have been used to gain support for rate increases and Duke’s efforts to merge with Progress Energy.
In today’s filing, NC WARN said the program appears to discriminate against non-favored customers who would be forced to subsidize heavy energy users even more than they already do.
Verbiage from today’s motion by attorney John Runkle:
. As it states in the cover letter opening this docket, the proposed new Pilot Economic Recovery Rider arose from settlement discussions with certain industrial customers in [the merger and 2011 rate case]dockets.
. The Commission issued its Order in the rate hike case on January 27, 2012, in which it determined that a 7.2% rate increase for all customers was just and reasonable. The proposed Economic Recovery Rider sub judice is a major revision to Duke Energy’s rate case application in that case and flies in the face of the approved Stipulation Agreement.
. The apparent current position in this docket that a 1.2% rate increase is actually required from certain customers undercuts the Commission’s findings that the 7.2% rate increase across the board was fair and reasonable for all customers.
. Many of Duke Energy’s residential and small business customers are also facing severe financial hardships and would also prefer the opportunity to receive a significant rate discount.
. NC WARN further finds it troublesome that the rider may act as a rebate, or kick back, to certain industrial customers to win their support for the rate hike and the merger. In 2006, similar actions and negotiated settlements in a Duke Energy rate case in Ohio lead to antitrust litigation and recently, the Federal 6th Circuit Court of Appeals held that the law suit on whether those payments constituted unlawful antitrust actions should be reinstated and sent to a jury.
. Issues that need to be resolved in a hearing on the merits of the rider include the potential discrimination of the rider on other members of the industrial class of customers, i.e., which customers were notified of the proposed rate, when they were notified and which customers were selected to participate; the potential discrimination of the rider on all other customers; the expected cost of the rider; and future plans to continue or expand the rider through subsidies from other customers.