By John Downey
Hearings on Duke Energy Carolinas’ proposed 5.1% rate hike ended Friday with the state’s customer advocate defending the proposal and a private watchdog group frustrated in attempts to learn how it was negotiated.
Two witnesses for the Public Staff of the N.C. Utilities Commission testified Friday morning. Kathy Fernald, assistant director of the accounting division, testified about the financial details of the settlement the staff worked out with Duke (NYSE:DUK). Its original 9.7% rate hike was cut to 5.1%, which the utilities commission considered this week.
She said the staff thought the deal was clearly in the public’s interest. It cut the Duke’s original request for $466 million in new revenue to $234.5 million. It includes a two-step rate increase — 4.6% next year and then 0.5% in 2015. It requires Duke to wait until 2015 at least to seek another hike. And Duke agreed to provide $10 million from shareholder funds to help low-income customers pay their bills.
Duke and the public staff have asked the commission to adopt the settlement as proposed. But the commission is not bound by the agreement between Duke and the staff.
The Durham-based watchdog group NC WARN has contended throughout the hearing and the proceedings leading up to it that Duke attempted to charge customers for costs that, by law, they are not required to pay. The group has contended the settlement with the public staff still contained such charges and was unfair to customers in other respects. The group expressed concern the settlement reflects compromises that favored Duke over customers.
Confidential dealings off-limits
NC WARN attorney John Runkle clearly intended to cross examine Fernald at length about the settlement, asking for at least 90 minutes to question her. He attempted several times to ask Fernald what the public staff’s initial position on what would be proper charges for several items listed by Duke as an expense. But he was blocked when Chairman Ed Finley sustained objections from Duke’s attorneys to the entire line of questioning.
“Don’t ask about the settlement discussions — they are confidential,” Finley told Runkle after sustaining the third consecutive objection.
Runkle responded NC WARN believes “it would be something important for the commission to consider whether the charges in the settlement agreement reflect the best professional judgment of the public staff.”
Finley was not persuaded. “The commission disagrees,” he said. “Continue with your questions and don’t ask about the settlement discussions.”