Business

Duke Energy president defends proposed price hike

Posted November 29, 2011
Updated November 30, 2011

— The president of Duke Energy North Carolina took the stand Tuesday morning to defend a proposed 7.2 percent rate increase, one day after customers complained about the possible price hike.

The higher rates would affect 1.8 million customers statewide, beginning in February, if the North Carolina Utilities Commission agrees they are needed. The average household electric bill would go up by about $7 per month.

The rate increase is less than half of Duke Energy's original request of 15 percent on average across residential, industrial and commercial customers. The proposal cleared a major hurdle last week with the endorsement of the commission's Public Staff, which represents consumers.

Duke Energy President Brett Carter was grilled by attorneys from environmental and consumer watchdog groups, the city of Durham and the state's Attorney General's office.

Carter said the company needs the money to pay for $4.8 billion in greater employee benefit costs, power plant modernization, environmental compliance and other construction projects approved by state regulators since 2009.

He acknowledged the tough economics times, saying that families who are struggling pull at his heart strings. He said that’s why his company has agreed to pay $11 million to community programs that help low-income families cope with higher heating bills.

Carter was repeatedly quizzed on how the company came up with the $11 million figure and if it would really be enough to help cover the rate hike. Carter admitted Duke Energy will be coming back to ask for another rate hike next year and said that the $11 million would only be a one time contribution.

Alfred Ripley, who represents the North Carolina Justice Center, a non-profit group that advocates for the poor, says $11 million is not enough and is "a drop in the bucket."

Duke Energy is asking for the rate increases under the backdrop of the biggest utilities merger in U.S. history. The company is buying Progress Energy, and many Progress customers wonder if their rates will go up as well if Duke's rate hike is approved.

Duke Energy says the rates will remain separate, even after the merger. However, next year, Progress Energy plans to ask for rate raises as well. Right now, Progress Energy's rates are higher than Duke Energy's with about $1 more per kilowatt hour on average. Progress Energy says that's because its customers are more spread out and it costs more to get them power.

These are the figures, as of June 30, according to Edison Electric Institute:

  • Residential: Duke Energy – .0894 cents/kwh; Progress Energy – 1.022 cents/kwh
  • Industrial: Duke Energy – .0677 cents/kwh, Progress Energy –  .0684 cents/kwh
  • Commercial: Duke Energy – .0524 cents/kwh; Progress Energy – .0857 cents/kwh

Duke Energy's last rate increase in 2009 raised power costs by 7 percent, but the increase was spread over two years. State Attorney General Roy Cooper says he is standing with consumers against the proposed rate hike. 

"A 7.2 percent rate increase is too much for working families and businesses during these tough economic times," Cooper said in a statement.

46 Comments

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  • DavyCrockett Nov 30, 4:43 p.m.

    I see the socialists from the Peoples Republic of Chapel Hill are at it again. Why does Duke energy have to pay anything at all for "poor folks"? Answer: They don't. And by the way, when we're discussing people who need help paying for the electricity they consume, how many are retired after having lived up to every nickel they ever made rather than saving "anything" for their future? How many have cellphones, internet, , big screen TVs, and more than one late model auto in the driveway? How many spend money on alchohol and smokes?

  • bluemax4195 Nov 30, 12:15 p.m.

    The article states that he says: "He acknowledged the tough economics times, saying that families who are struggling pull at his heart strings."

    I'll just bet it does, especially when this could mean the difference between a "normal" bonus and a "giant" bonus for him and his 6 digit salary! Come to think of it... that pulls at my heart strings too, as well as something well south of my heart!

    Merry Christmas to you Mr. Carter! Bah Humbug!

  • OpinionatedGuy Nov 30, 11:09 a.m.

    If Duke Energy is hurting for money so badly, Why don't they cancel the purchase of Progress Energy... Then they would have plenty of money... Maybe even get nice big bonuses...

  • golowral Nov 30, 9:55 a.m.

    Nationalize power production and contract out the management to China.

  • superman Nov 30, 9:49 a.m.

    You cannot blame him or hold him responsible for his salary. The Board of Directors hired him and determined his salary. If you want to complain you should channel that anger to the BOD. If you could get a job making 6 million you would take it too. Perhaps there are other people in your organization that feel you are also paid too much for the little that you do. You share the profits of the company you work for since they also pay your salary. The rate hike only means you eat one less burger a month. Small price to pay when you can flip a switch and a light comes on. You are probably the first to call when there is a power outage. Have you complained to your doctor about the high prices he charges. I had a physical a couple months ago. About 10 minutes with the doctor and he charged over $500. Get real people $7 a month is nothing to worry about. If I paid him at the rate of $7 a month it would only take me 6 years to pay.

  • MarcoPolo Nov 30, 9:44 a.m.

    C'mon folks. How else are they going to manage that $10 million dollar "loan" to the democrooks in order to pay for their DNC charlotte convention?

    Nothing to see here. Just standard democrook SOP.

  • Scubagirl Nov 30, 9:32 a.m.

    "I support the rate hike and have no affiiation to Duke power. It cost money, and you are all a bunch of whiners
    stonky"

    Well now stonky....if you have no affiliation with Duke Power then this rate hike won't affect you now will it? If it did I'm pretty sure you'd be complaining as well. This is not whining, so get over yourself. Most of us are already keeping our heat low (cold in house) and a/c high (hot in house) lights off, energy efficient appliances etc and still they want more of our money.

  • Scubagirl Nov 30, 9:29 a.m.

    Of course the President defends the increase-means more money in HIS pockets and less in ours. I still say DE has enough money to cover what they have spent. They are still paying pretty good dividends and companies that don't have money don't pay their stockholders! They ask for an increase every year. JUST SAY NO!!!!!!!!!!

  • twokvin Nov 30, 9:09 a.m.

    "Power, water, gas, food, the cost of everything has gone up since the increase in fuel 6 years ago, and if OPEC has any say, we could easily see $300 / barrel for oil by the end of next year.
    Tired Of Excuses"

    Uhm, most if not all electricity in this country is produced using native resources such as coal and natural gas. Note sure your OPEC argument applies here. Why not look into what the EPA is mandating, could that be the source of higher electricity cost? Barack Obama even advocated this before he became President.

    I do find it odd that prices are going up when we are able to recover vastly more natural gas with new technologies than ever before.

  • warcraft27513 Nov 30, 9:00 a.m.

    Of course he's going to defend the rate hike. The rate hike probably goes towards his salary. Why don't he take some of his salary and help those who are struggling to pay for their electricity.-mochabrown

    Because he's part of that 1% that doesn't give a flying fig about the "common" man.

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