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Duke Energy Profits Up 23 Percent, CEO Calls For Regular Rate Increases

Extreme weather and higher rates in the Carolinas led Duke Energy to make 23 percent more last year than it did in 2009. But the company says it needs predictable rate increases moving forward. Every time Duke Energy wants to raise rates in North Carolina, the company has to make its case with the state utilities commission. Sometimes regulators grant the rate hike, sometimes they don't. Duke CEO Jim Rogers says that makes it tough to plan for big expenditures like building new nuclear plants. It also makes Wall Street investors nervous to pony up cash for construction. Rogers says it would be much better for rates to be based on a formula that wouldn't require the normal vetting process. "This is a good answer for investors, it's a good answer for consumers," said Rogers on an earnings conference call with investors Thursday morning. "We're in a period of rising prices of the next couple of decades. (Having) formula rates allows us to smooth out those cost increases." By year's end, Duke and Progress Energy hope to merge into the nation's largest utility company. Both are seeking permits to build new nuclear plants in North Carolina, and they intend to push lawmakers during the current legislative session for permission to recover some of those costs without going through extensive rate hearings. But no bill has been introduced, and opposition is mobilizing. More than a dozen environmental and consumer groups have formed a coalition called Consumers Against Rate Hikes. "We want ratepayers and the public in North Carolina to be able to look at these requests for rate increases and have their public input before the utilities commission - which is the correct process and one that has served us fairly well," says Bill Wilson of AARP North Carolina. In addition, environmental groups say the measure would allow the construction of costly - and in their view, unnecessary - nuclear reactors. South Carolina and Florida - which are major markets for Duke and Progress - already have laws that help utilities pay for new reactors without going through lengthy rate hearings.