NC high court weighs consumer place in power rates

Posted September 8, 2014

— North Carolina's highest court is taking a new look at whether state utilities regulators are doing enough to balance consumer protection against the need for the country's largest electric company for higher rates.

The state Supreme Court heard arguments Monday in two lawsuits in which Attorney General Roy Cooper argues regulators did not sufficiently explore the impact on consumers when allowing two rate increases for Duke Energy Carolinas. The Duke Energy subsidiary serves customers in Durham and western North Carolina.

The cases involve a 7.2 percent rate increase originally approved in 2012 and another of about 5 percent approved last year. Consumers are already paying the higher rates.

A Duke lawyer says consumers were considered and courts should stay out of second-guessing the best judgment of the appointed regulatory commission.

"Blackouts and brownouts are not an option," Chris Browning, an attorney for Duke, said to argue that the Utilities Commission properly used peak-demand days for calculating the company's needs. "You have to design the system for when demand is the highest."

John Runkle, an attorney for the watchdog group NC WARN, countered that residential customers are paying $1.9 billion more for the rate increases than industrial customers, a difference that he called "arbitrary and capricious."

"There's just no basis of using that one (peak) hour to allocate all the costs of the system," Runkle said. "This is a hard time, a hard economic time, and these rate increases impact the most vulnerable. They hurt the low income, the elderly and those on fixed incomes. Those are the residential customers that we’re talking about."

John Maddrey, North Carolina's solicitor general, said the Utilities Commission never took into account the impact the rate increases would have on residential customers, despite a Supreme Court ruling last year for the panel to do so.

"Did you hear any testimony, are there any findings of fact as to what a 4.5 percent or a 5.1 percent rate increase would have on the average consumer?" Maddrey asked the justices, calling it "a glaring omission." "I don’t see any testimony. I don’t see any findings of fact that would address that. That's the requirement this court has imposed on the commission."

North Carolina Public Staff, the agency that represents consumers in utility rate cases, negotiated the increases with Duke, and attorney Bill Grantmyre said Monday that the increases are needed to prevent customers from seeing even higher power bills in the future.

If rates are set too low, he said, Duke would have a harder time issuing bonds to raise money, which could lead to higher interest rates and debt payments and could jeopardize its operations.

Decisions in the two cases from the court aren't expected for a few months.


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  • tbg0519 Sep 9, 2014

    View quoted thread

    You are correct about which political party controlled the NC legislature in 2010-present. That is however extraneous information. Duke Power and Progress Energy were both interstate companies, and as such their merger had to be approved at the federal level. More to the point, it had to be approved by the Federal Energy Regulatory Commission (FERC). The FERC is composed of commissioners who are appointed by the President and approved by the Senate. The FERC that approved the merger was composed of 2 commissioners appointed by President Bush and 2 by President Obama. All 4 however were approved by the Senate controlled by Harry Reid.

  • babylaceycarpenter Sep 8, 2014

    View quoted thread

    Grow and hunt and fish for your food. While out, turn off your lights, tv, A/C, etc. Ride your bike to work, church or wherever. Yes, you can live without a good portion of what you now have. People in other countries go without 90% of what you cannot.

  • Bill Mooney Sep 8, 2014
    user avatar

    Free Markets! Take government out of the equation and let these corporations charge whatever they like. Do the same with tow trucks. If your car is towed, they could charge 30% of its value, if the government didn't prohibit the free markets with terrible regulation.

  • Ears to the Ground Sep 8, 2014

    For those that seem not to know the Republicans took over the General Assembly in 2010, meaning Republicans were in control of the General Assembly when the merger took place.

  • Stilllearnin Sep 8, 2014

    View quoted thread

    I guess we can do without electricity, gas and groceries ?

  • arfamr1010 Sep 8, 2014

    If anyone needs MORE proof that the democrats are in bed with corporations, look no further than their approval of the Duke/Progress merger. A lose/lose for citizens of NC and a golden parachute for democrats

  • Olenc Native Sep 8, 2014
    user avatar

    "A Duke lawyer says consumers were considered and courts should stay out of second-guessing the best judgment of the appointed regulatory commission."

    I for one am very glad they are second guessing the regulatory commission. Looking at Duke's profits, it becomes very obvious they didn't need to raise rates.

  • trayNTP Sep 8, 2014

    Sarcasm: Yes, how dare citizen-consumers and courts be allowed to question a regulatory commission that's supposed to act on behalf of North dare democracy be allowed when it comes to what Duke Energy wants to charge. Duke owns us because it owns our government. The commission works for them, and we should just accept our place...

    ...according to their lawyer.

  • Forthe Newssite Sep 8, 2014
    user avatar

    "A Duke lawyer says consumers were considered and courts should stay out of second-guessing the best judgment of the appointed regulatory commission."

    what an ARROGANT STATEMENT!!! Of course I would expect nothing less from the self appointed king of energy-DE. Consumers HAVE NEVER BEEN CONSIDERED!!! The only ones DE considers are the executives and the shareholders; and as a shareholder I'd rather they start considering the consumer......

  • Kevin Patrick Sep 8, 2014
    user avatar

    And I am sure that when they are forced to clean up the coal ash sites we will be footing the bill. My electric bill DOUBLED when they did this rate increase. They apparently don't have to pay their own electric bills either. they will only help out the regular folk when it benefits them.