By Bruce Henderson
Errors and omissions in charges Duke Energy Carolinas included in its rate case now before state regulators point to poor company oversight, a consultant for a Durham advocacy group testified Wednesday.
California economist William Marcus, testifying for N.C. WARN, identified an additional $549,000 in charges that he said Duke should not ask customers to pay. Those expenses included flowers, gifts and membership dues that Marcus said had nothing to do with making electricity, and $48,000 in meals and entertainment with no listed purpose.
Marcus has previously identified $30 million in Duke charges, about three-fourths of which would apply to the North Carolina case, that he said should be disallowed. Most of those charges were for stock-based compensation of executives.
“There may be a few errors in here, and some differences of judgment, but I’m very concerned,” he told the North Carolina Utilities Commission.
Marcus said the commission should deduct 10 basis points from Duke’s allowed return on equity, a profit margin for investors. If the commission accepts the 10.2 percent return Duke has agreed to in settlement talks, those penalties would reduce it to 10.1 percent, costing Duke millions of dollars in revenue.
Duke officials were expected to respond to Marcus’ findings in testimony later this week.
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