Charlotte, N.C. — Duke Energy and the North Carolina Public Staff have negotiated a rate increase for the utility, which still must be approved by state regulators, officials said Wednesday.
Duke asked in February to raise electric rates by an average of 9.7 percent, but the settlement with the Public Staff, the agency that represents consumers in utility cases, calls for rates to go up by 4.5 percent for two years, rising to 5.1 percent after that.
The negotiated increase provides Duke with a 10.2 percent return on equity and an extra $235 million in annual revenue, down from the $446 million the company sought.
The Charlotte-based utility also agreed to pay a total of $10 million to agencies that help low-income residents with their electric bills.
The North Carolina Utilities Commission still must approve any increase, and critics immediately pounced on the settlement as proof that Duke is overcharging customers.
"By agreeing to settle for $211 million less than it had requested, Duke has made clear that it had originally sought to overcharge customers by that much year after year," Jim Warren, executive director of N.C. WARN, said in a statement. "This is the third time in four years that Duke has asked for millions in inappropriate charges, then split the difference with regulators – and the rates go up each time."
Warren noted that the deal was reached before public hearings could be held across the state. AARP and Greenpeace also oppose the settlement and called on the Utilities Commission to reject the rate increase.
"We have no confidence that Duke isn’t getting away with millions more in unallowable expenses that would be locked in each year if the settlement is approved by the commission," Warren said.
Attorney General Roy Cooper has criticized rate increases by Duke and Progress Energy, which Duke acquired last year, saying the Utilities Commission doesn't take consumers and the sluggish economy into account when setting electric rates.
The Supreme Court in April struck down a 7.2 percent increase awarded to Duke last year, but the commission hasn't yet held new hearings on that rate case. Cooper said he plans to appeal a recent 7.5 percent increase on former Progress customers.