Settlement in rate case signals a broken system that undermines public confidence in government agencies
Regarding the proposed settlement, this statement is from Greenpeace, AARP NC and NC WARN
Durham, NC – The state agency that supposedly represents North Carolina electricity customers has cut a deal with Duke Energy to settle a controversial rate hike request. The NC Utilities Commission’s Public Staff announced the deal today before even considering evidence being prepared by public interest groups, businesses and local governments – and before public hearings set for Winston-Salem, Charlotte and Hillsborough.
By agreeing to settle for $211 million less than it had requested, Duke has made clear that it had originally sought to overcharge customers by that much year after year. We have no confidence that Duke isn’t getting away with millions more in unallowable expenses that would be locked in each year if the settlement is approved by the Commission.
This is the third time in four years that Duke has asked for millions in inappropriate charges, then split the difference with regulators – and the rates go up each time. The settlement, if approved, would grant an overall rate increase of about 5 percent.
Duke is clearly gaming the system by asking for twice as much as it wants, and the Public Staff is playing along by giving them half in every rate case. This deal is not good government and undermines the public’s confidence that rates are determined in a fair and transparent way.
“Seniors have been showing up at NCUC public hearings because they cannot afford annual utility increases that threaten their health and economic security. By settling before the hearings in June and July, the Public Staff is signaling that their concerns mean very little,” said AARP State Director Doug Dickerson today.
The case will still go to evidentiary hearings on July 8, but the settlement prejudices the case because the Commission routinely sides with the Public Staff. The Public Staff is essentially saying “we don’t need to hear from the consumers, nor their experts, nor await cross examination of Duke witnesses.”
That’s a lousy way to regulate a giant corporate utility.
In cutting the deal, the Public Staff also abandoned its decades-long and vigorous opposition to Duke’s method of shifting generation costs onto small customers by basing the entire year’s expenses on the single hottest hour. That allocation method, which is rarely used across the nation, allows Duke to practically give power to the largest users, thus driving up demand and perpetuating the utility’s argument to build expensive power plants that otherwise would not be needed. Meanwhile, households, small businesses and local governments get hit with continuing rate hikes.
As interveners in the case, both Greenpeace and NC WARN – and other entities – have been furiously combing through thousands of documents and will make initial filings by Monday.
Backroom deal-making – with all other parties locked out – is exactly what makes people resent the government. We are determined to work harder than ever for the public’s actual interests: affordable rates and clean, efficient energy.