Statement from the Energy Justice NC Coalition:
Only leaders of a government-protected monopoly could have the gall to use the devastation from hurricanes Florence and Michael as cover to attempt a sweeping overhaul of the state’s electric utility regulations, but that’s exactly what Duke Energy is doing with Senate Bill 559. The proposed legislation could allow the corporation to use major storm costs as a means to revive a twice-rejected grid “modernization” scheme to overcharge customers billions of dollars for unnecessary projects.
Duke Energy claims SB559 would help customers by smoothing out the “multiple rate increases” the corporation has promised investors.* If that were true, then why didn’t Duke openly justify the bill to the many groups it had met with for more than a year in a stakeholder process addressing its grid modernization plans? Instead, Duke is hiding the grid scheme behind storm recovery expenses – for which Duke already gets repaid in every rate case.
Noting the secrecy, the Charlotte Business Journal (April 2) said the bill would let Duke Energy “ask regulators for annual increases to pay for its proposed, grid-improvement plan in the state that could cost up to $13 billion.”
NATIONAL GRID SCHEME: As some of us noted to legislative leaders in January, the grid plan is part of a national scheme by electric monopolies to lard investors with billions by repeatedly raising power bills on families and businesses to pay for unnecessary projects. Since 2017, dozens of commercial and industrial customer associations, consumer groups such as AARP, and environmental justice organizations have successfully opposed Duke’s grid proposal in the legislature and at the NC Utilities Commission. So now Duke is making a sneak attack.
FIVE-YEAR RATE HIKES: The bill would allow the NC Utilities Commission to approve five-year blocks of automatic annual rate hikes up front – perhaps several overlapping blocks to cover a variety of projects. Five years of annual rate hikes would be locked in regardless of changing technologies or conditions, thus forcing customers into a never-ending cycle of paying for Duke executives’ mistakes and bad investments.
“SECURITIZING” STORM EXPENSES: Allowing Duke to recover storm repair costs by issuing ratepayer-backed bonds would open the door for similar treatment of coal ash costs, the grid “modernization” scheme and even power plants, all with little transparency or accountability. Even Duke’s state president admitted that this same mechanism could be used for coal ash costs – now estimated at nearly $10 billion – and it could bail out other executive mistakes as well. Moreover, Duke Energy’s burden of responding to worsening storms should not be alleviated without addressing the fact that its own relentless burning of fossil fuels is a contributor to the intensity of those storms.
MAJOR RESTRUCTURING: With this attempted power grab with SB559, Duke Energy is seeking a major restructuring of North Carolina’s electricity system via deceptive legislation. In February, the Energy Justice NC Coalition began calling for restructuring the system by ending monopoly control and opening the state to clean energy choice – but through a careful and transparent process. A recent poll by Conservatives for Clean Energy shows that 80 percent of state voters agree with us, and no longer want to be captives of Duke and other electric monopolies.
“OUR CAPTIVE CUSTOMERS”: Duke CEO Lynn Good recently admitted to E&E News (3/27/19) that “you can’t assume you have captive customers forever” as she mused about having to actually care about customer opinion. With nearly 85 percent of state voters wanting more renewable energy – which is now cheaper than Duke’s dirty energy – SB559 is a last gasp effort to gain billions in revenue for unneeded projects.
STALLING, NOT HELPING RENEWABLES: Duke claims its grid plan would prepare the electric system for more renewable energy, but the giant monopoly is actually impeding the growth of renewables and storage, and plans to be only 8 percent renewable in the Carolinas in 15 years. Most of the grid projects are routine maintenance that should not include a guaranteed profit nor be passed along through annual rate hikes, as Duke is seeking.
The Energy Justice NC Coalition urges legislators to again reject Duke Energy’s attempts to foist billions of dollars in unnecessary costs onto the backs of North Carolina families and businesses.
It is time to end the Duke Energy monopoly.
*Last year, top Duke executives promised shareholders the utility will initiate “multiple rate cases” in North Carolina to fuel the grid “improvement” scheme and billions more for fracked gas-fired power plants to “enhance investment returns.”