Corporate officials told one story to rate-making regulators, another to Wall Street
NC WARN is calling on Duke Energy CEO Lynn Good to explain major discrepancies between official regulatory filings and what corporate executives are telling Wall Street about projected electricity demand. The correct information could lead to either $25 billion in new power plants and continuing rate increases across the Carolinas – or none at all.
Only weeks after filing 15-year resource plans with the NC Utilities Commission that project the need to add approximately $25 billion in new power plants due to growth in demand, Good and former CEO Jim Rogers began telling investors and analysts that growth will be far lower than shown in the filing.
NC WARN and others have long criticized growth estimates by Duke and now-subsidiary Progress Energy that consistently prove to be wildly exaggerated – and which are used to justify continuing customer rate hikes to pay for new power plants that are not needed.
- On October 15, Duke-Progress planning documents filed with the NC Utilities Commission projected annual demand growth of 1.5% and 1.4% respectively over the next 15 years.
- On November 6, CEO Good told Duke investors that she expects the growth to be in the 0.5 to 1.0% range for the foreseeable future.
- On December 16, Duke Board Chairman Jim Rogers told a financial publication he expects electric growth to be flat for the foreseeable future, and that “over the next couple of decades, we’re not going to be building central station generation.”
- This month, Rogers was quoted by Energy Central as saying, “The many challenges ahead are going to fundamentally change this industry … At the same time, power demand will be anemic or declining.”
- Rogers’ forecast of zero growth is in line with the most recent projections by the Federal Energy Information Agency as well as actual growth for the past decade.
- On January 7, Duke Energy North Carolina President Paul Newton testified to a NC General Assembly committee that the growth rate would be between 0.5 and 0.9%.
The projected growth rate is a crucial component in determining the need for new generation facilities – the difference between a 1.4% increase and flat growth is in the $25 billion range. It should be noted that Jim Rogers recently received several awards in recognition of his continuing industry leadership, so his predictions about a rapidly changing industry carry substantial weight.
From the letter to CEO Good: “We are seeking your help to clarify which of these widely divergent annual growth forecasts Duke truly believes to be accurate. …
We are submitting a data request to Duke Energy today to have you recalculate the growth demand in the IRP to reflect the much lower forecasts company senior executives are stating in public and to investors. NC WARN believes Mr. Rogers’ forecast of flat growth is closest to the mark and, if adopted, will preclude the need for extremely expensive new generating facilities and continuing rate increases in North Carolina. As Mr. Rogers maintains, energy efficiency alone will considerably lower electric growth.”