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Big Duke Energy customers fight low-income assistance program

New rules will affect what many North Carolina consumers pay for electricity and rates are set.
David Boraks
Some large Duke Energy customers are objecting to sharing the cost of a low-income assistance program.

Some of Duke Energy’s big industrial customers are fighting the utility's plans to subsidize bills for poor customers, saying they shouldn't have to help pay for it. Consumer advocates say the cost is minimal and could cut losses on unpaid bills.

Duke negotiated the Customer Assistance Program, or CAP, with clean energy and consumer advocates concerned about rapidly rising electric bills. The program cuts $42 a month off the bills of eligible low-income customers. State regulators approved it in August, along with a three-year, 11% rate hike that took effect Oct. 1 for Duke Energy Progress customers in Asheville, Raleigh and eastern North Carolina. A similar request for customers of Duke Energy Carolinas in central and western North Carolina is awaiting approval.

But the Carolina Industrial Group for Fair Utility Rates (CIGFUR) is asking regulators to halt the program temporarily while it appeals to the state Supreme Court. In its notice of appeal filed Oct. 17, CIGFUR asks the court to overturn a monthly fee that helps fund the program and to rule that electric utility customer assistance programs are illegal without an act of the General Assembly.

The coalition is specifically fighting a $1.70 monthly charge on each business account. The big companies, who are not named, argue that the program is an illegal cross-subsidy between different customer types.

But David Neal, a lawyer with Southern Environmental Law Center (SELC) which worked with Duke on the program, disagreed with that argument. And he said the program is expected to shrink the amount of Duke's uncollected bills.

"Those get recovered from all customer classes. So there's a good chance that this customer assistance program will actually contribute to some downward pressure on rates," Neal said.

"These big industrial customers are only being asked to contribute $1.70 a month. And we're talking about massive industrial operations," he added.

The SELC has asked the utilities commission to allow the program to continue, along with other groups, including the N.C. Justice Center, N.C. Housing Coalition, Natural Resources Defense Council, Southern Alliance for Clean Energy, Vote Solar, and the Sierra Club.

A spokeswoman for the industrial group declined to comment, citing the pending legal actions.

The companies' request comes even as large industrial customers actually got a smaller rate hike than residential customers.

Duke Energy spokesman Bill Norton said it's up to regulators to decide whether to let the program go forward.

“CAP was the result of extensive collaboration with customer advocates. In light of the legal uncertainty due to the appeal, Duke Energy defers to the Commission regarding the complex decision of whether to implement CAP before the legal issues are resolved," Norton said in an email.

Norton said Duke expects 60,000 Duke Energy Progress customers and 64,000 Duke Energy Carolinas customers to qualify for bill reductions.

The utilities commission is expected to rule soon on the request for a stay. It could be a couple of years before the case is decided at the state Supreme Court.

Separately, the utilities commission on Tuesday denied CIGFUR's requestto reconsider the Duke Energy Progress rate increase. The companies disputed how fuel-related costs are allocated among customer groups, but regulators ruled it was done according to the law.

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David Boraks previously covered climate change and the environment for WFAE. See more at www.wfae.org/climate-news. He also has covered housing and homelessness, energy and the environment, transportation and business.