Cooper: Utilities Commission ignores law in Duke Energy rate increase

Posted April 18, 2014

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— For North Carolina Attorney General Roy Cooper, it's an unpleasant case of deja vu.

A year ago, the state Supreme Court struck down a rate increase that the state Utilities Commission awarded to Duke Energy Corp. and ordered the panel to reconsider the increase in light of its impact on consumers. Now, Cooper is appealing the same increase to the high court, arguing that the Utilities Commission ignored the ruling.

“The court has already ruled once that consumers must be taken into account when setting utility profits but it still hasn’t happened,” Cooper said in a statement. “Even when given a second chance to get it right, the commission didn’t really consider consumers and approved the exact same rate hike.”

The commission first awarded Duke a 7.2 percent increase on electric rates in January 2012, despite opposition from hundreds of consumers at public hearings. The increase took effect a month later, adding $7 to the average monthly residential electric bill.

The Public Staff, the state agency that represents consumers in utility cases before the commission, negotiated the 7.2 percent increase with Duke, noting that the utility had wanted to raise rates by 17 percent.

Still, Cooper challenged the increase, calling it exorbitant in light of the sputtering economy and the tight budgets many families faced. Duke maintained that it needed to recoup some of the $4 billion it had spent on new, more efficient power plants.

The Supreme Court agreed with Cooper that the Utilities Commission cannot treat electric customers "as mere afterthoughts" and needed to take their interests into account, and it ordered the commission to re-evaluate Duke's increase.

The Utilities Commission then declined to hear any new evidence in the matter and granted Duke the same 7.2 percent increase and 10.5 percent return on equity for shareholders.

Cooper has asked the Supreme Court to ensure that the commission follows the law and "truly considers the impact on consumers."

The Attorney General's Office also is fighting a second Duke rate request, which would raise consumers’ rates by up to  5.1 percent, as well as a 7.5 percent rate increase proposed for the former Progress Energy, which Duke acquired two years ago.


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