Duke Energy seeks big rate increase in central and western NC to cover higher fuel costs
Duke Energy has asked state regulators for a nearly 17% rate increase in western and central North Carolina to cover rising costs for natural gas and coal over the past year. That's the largest increase for fuel costs in the company's history and means Duke has pending rate hikes before regulators that total 27%.
In filings with the North Carolina Utilities Commission, Duke proposed raising rates a total of 16.6% by Jan. 1 in its Duke Energy Carolinas territory, which stretches from Durham to Charlotte to the mountains.
Of that, 16.2% would be for higher fuel costs and would take effect Sept. 1. The remaining 0.4% would be for expenses related to energy efficiency.
"Our coal prices increased by approximately 28% compared to the prior year, while natural gas prices increased by approximately 65%, and natural gas made up the majority of the fuel in this rate increase," spokesman Bill Norton told WFAE.
"These reflect actual fuel costs — customers pay what we pay — leading to increases in some years and decreases in others," Norton said.
He said Duke's long-range "carbon plan" that calls for eliminating fossil fuels also would help keep costs down in future years.
"The prudent adoption of renewables and potentially advanced nuclear will help reduce fuel costs in the coming years as part of a diverse approach to carbon reduction in a manner that balances affordability and reliability for customers," Norton said.
Duke also plans to keep adding gas-powered plants as part of the carbon plan. The company has said that transition could push up electricity costs as much as 35% over the next 13 years, not including any fuel-related increases.
If the increases are approved, a typical residential customer using 1,000 kilowatt-hours per month would see their monthly bill rise just over $19 a month.
This increase would be separate from a 10.5% rate hike Duke requested in January as part of a three-year rate plan to upgrade the electric grid and improve reliability during storms.
It's unlikely regulators will approve both requests in full. But if they did, a typical customer would pay an extra $31.64 a month next year, for a total of $146.65. That's still below the summer 2022 national average of $161.81 a month, and other utilities may have raised rates since then, Norton said.
Duke Energy Progress, the division that covers Raleigh, eastern North Carolina and the Asheville area, will file for a similar fuel-related increase in June.
The electricity price increase comes a day after Duke Energy's Piedmont Natural Gas division announced it was cutting rates because of recent declines in natural gas costs. Norton attributed that to the difference in state law governing when the gas and electric divisions can adjust rates.
"State law does not allow us (the electric company) to adjust midyear. On the other hand, (Piedmont Natural Gas) can update their rates monthly. So their rates went up last year (while ours held steady) and are now coming back down," Norton said.
He said over the past year the electric company has spent $1 billion more on fuel than it collected from customers and it's now seeking to cover the shortfall.