To Recoup Expenses, Duke Requests Higher Energy Rates
Updated Aug. 26, 2017
Duke Energy wants to increase electricity rates by an average of 17 percent for residential customers in western North Carolina, including Charlotte. The higher rates would pay for new facilities, cleaning up coal ash - and for a South Carolina nuclear plant the company has decided not to build.
Duke has spent about $542 million over the past decade planning for the Lee nuclear plant in Cherokee, South Carolina. Last year, it won approval from the Nuclear Regulatory Commission. But now Duke says it's canceling the project.
Duke blames the decision on the bankruptcy of the plant's designer, Westinghouse Electric, and on changes in the energy market. Those include falling prices for natural gas, which has fueled a new generation of power plants, says.
“Those prices have remained low and are projected to remain low for many many years ahead,” Fountain said.
But if state regulators agree, the cancellation still will cost customers. As part of the western North Carolina rate hike, Duke wants to recover about $500 million in costs related to the Lee plant. With interest, that would total $636 million over 12 years, a Duke spokesman said.
Duke says similar requests could be coming for eastern North Carolina and South Carolina.
The rate hike also would pay for new and upgraded plants, solar energy, improving the electric grid and cleaning up coal ash near the company's North Carolina plants.
Environmental and consumer groups are already lining up against the idea of charging customers for coal ash cleanups. But Fountain said it's just part of the cost of generating electricity.
“We've all benefited from low-cost electricity that's been generated from a variety of sources including coal. As Duke Energy has retired half of its coal-fired generation here in North Carolina, one of the byproducts of exiting that era is dealing with the waste stream that's left behind,” Fountain said.
The rate increase would average 16.7 percent for residential customers,10.9 percent for business customers. For a typical household using 1,000 kilowatt-hours a month, the increase would be $18.72 per month.
Hearings on the rate hike are expected early next year. Duke filed a similar rate hike request covering Asheville and eastern North Carolina in June. Hearings on that request begin in September.
This story has been updated with corrected information from Duke Energy about costs to be recovered from the nuclear project.