Bizarre settlement would change state law, open floodgates for a decade of giant rate hikes – part of a national scheme to drive up rates as power demand falls
Today NC WARN filed a motion calling for the NC Utilities Commission to reject a secretive, last minute settlement between Duke Energy and several organizations that would open the floodgates for huge, streamlined rate hikes with no guarantee of benefit to anyone other than corporate stockholders. We stand firmly with the Southern Environmental Law Center, the NC Justice Center, the NC Housing Coalition and others vigorously opposing the proposed deal as a rip-off of customers, especially those on low and fixed incomes.
If Duke and the others – the NC Sustainable Energy Assn, Environmental Defense Fund and Sierra Club – have a valid proposal to improve the electric grid, let’s air it out during a proper proceeding, not on a last minute filing in a rate case that the commission is set to rule on any day.
NC WARN is calling on Attorney General Josh Stein, the commission’s Public Staff, and all parties in the case to reject this deal.
Over the past year, Duke Energy failed to sell its vague, $13-16 billion dollar “grid modernization” to the normally-receptive legislature due to opposition from big business and everyone else. Duke execs then tried to change state law by sneaking the boondoggle into the rate-making process. Although the Duke Carolinas rate hearings went poorly for the Charlotte-based corporation, it apparently persuaded the organizations that – because the commission would side with Duke anyway – they should endorse a deal that might be slightly better than the utility’s original request for $7.8 billion in grid money over eight years.
Duke’s $7.8 billion scheme would raise residential rates by more than 25 percent by 2026 – on top of the 11.6 percent Duke seeks in the ongoing rate case and all the other rate hikes coming at customers if the utility builds 20 climate-wrecking fracked gas power plants, as planned. The proposed settlement would allow Duke Carolinas to charge customers $2.5 billion in grid costs in just the first three years; Duke Progress will seek a similar deal in its NC-SC territory.
The commission is required to reject the settlement according to state law because 1) it would allow Duke to pass along billions in expenses to customers through an automatic annual pass-through, rather than seek a rate increase after expenditures are made, 2) grid expenses that are usually reimbursed without mark-up would become profit centers, and 3) neither the commission nor other parties have had a chance to scrutinize any evidence or witnesses regarding the settlement.
Duke is likely seeking to bend the commission toward approving grid money even if it doesn’t approve the actual settlement. While there might be some benefit to customers in the deal, that case needs to be made openly.
Such “grid modernization” is a scheme by many US utilities to show investors that, even as electricity demand is down, the corporations can still create multi-billion dollar capital investments – needed or not – that keep rates rising and stock prices high. As the climate crisis devastates more communities, Duke Energy execs keep racing in the wrong direction – while gouging their customers financially.