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Progress Energy tries to bolster case for rate increase

Posted March 18, 2013

— Progress Energy called witnesses Monday to testify to the North Carolina Utilities Commission about the need for an electricity rate increase to maintain and improve the power supply in the state.

The utility and the North Carolina Public Staff, the agency within the Utilities Commission that represents consumers in rate cases, reached an agreement last month in which customers would see a 5.7 percent average increase in rates over a two-year period.

Progress, which was acquired by Duke Energy last year, originally requested an 11 percent increase, saying it would help the company as it transitions to cleaner energy. It is retiring 12 coal-fired units and replacing them with low-emission, natural gas-fueled plants.

Although the negotiated rate is lower, it remains controversial because it would hit residential customers hardest. Progress wants to cut rates for large industrial customers by 4.2 percent to try and save jobs.

"If industry leaves our state, those costs will be borne by other customer classes. So, some of the thought behind the rate design is to balance the concerns among all our customer classes," Progress spokesman Jeff Brooks said.

Progress said residential rates would go up 7 to 8 percent, which means close to $100 more a year for the average residential customer.

5.7 percent Progress Energy rate hike possible NC regulators hear testimony about proposed Progress increase

"You have to weigh (lower industrial rates) against the economics of raising a lot of other people's rates," said Jim Warren, executive director of NC WARN, a watchdog group that is a frequent critic of Duke and Progress. "It takes away buying power. That kills jobs, too."

The Utilities Commission held five public hearings across the state to discuss the impact of raising electric rates, and the evidentiary portion of the case is expected to last all week. Attorneys for business, government and the public cross-examined the utility's witnesses, and the commission is acting as the judge and jury.

Under the deal with Public Staff, Progress Energy also agreed to contribute an additional $20 million to help low-income customers in North Carolina pay their energy bills and to lower its return-on-equity demands.

The rate case is the first to come before the commission after tense hearings last summer in the wake of a management shake-up after the merger.

The Duke-controlled board ousted Progress Chief Executive Bill Johnson, who was to head the combined utility,  hours after the companies merged. That sparked an investigation into whether the board misled regulators.

101 Comments

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  • TTDD Mar 19, 4:43 p.m.

    I Think some of the higher ups in that company need to take a pay cut. They paid too much for what they do.

  • davidgnews Mar 19, 12:55 p.m.

    Oh to be a fly on the wall during a board meeting. I'm sure there are deep concerns and discussions about proper management and ethical practices.

    In reality though, they can never be laughing hard enough knowing that they essentially own the whole shooting match. Here comes the new Enron.

  • jdupree Mar 19, 12:33 p.m.

    We had to pay all those executive bonuses, pay all that Progress Energy severance pay, give 25 million to the Democratic National Convention in Charlotte, NC not to mention printing up all that new stationary/business cards/logos on vehicles due to the merger/name changes. Yes, your not using more electricity and our power plants are paid for, but the conversion from coal to gas/wind/solar cost money and we don't want to pay for it. That's what Duke the talking dog said!

  • wildpig777 Mar 19, 11:19 a.m.

    why yall blaming duke power? you'd be better served blaming the politicans [called board members] on the NC UTILITIES COMMISSION. theyre the ones who keep selling the citizens of nc down the drain.

  • kornfan2448 Mar 19, 10:06 a.m.

    "So the rates for corporations will go down while the residential rates will go up? Yep, that sounds about right. I guess when you have the Governor in your back pocket anything goes!" ~ hiddentreasurescruecds

    Didn't read through all the comments, but glad I'm not the only one that has a problem with this. Eventually, the people are going to get tired of having it handed to them while large corporations continue to get all the breaks.

  • hiddentreasurescruecds Mar 19, 9:25 a.m.

    So the rates for corporations will go down while the residential rates will go up? Yep, that sounds about right. I guess when you have the Governor in your back pocket anything goes!

  • spiritseeker Mar 19, 9:24 a.m.

    Everyone seems to have forgotten that Duke Energy just spent $466 million dollars to purchase a hydroelectric generating system in Chile rather than use that money to do the upgrades and new plants here in North Carolina that are estimated to cost over $400 million and are its primary reason for the rate increase.

  • Mom120 Mar 19, 9:22 a.m.

    It figures

  • Rebelyell55 Mar 19, 9:20 a.m.

    So instead of using some of the profits to keep up their equipment, which is needed in order to sell their product, they want their customers to pay, so the shareholder continue to reap more off the stock. On top of that, they're playing to the GOP (corp. puppets), that they'll drop the rate on "some large" companies (who can most likely afford it and already has rate fiquired in to profit), and pass it on to those less likely to afford it. So I'm sure they'll get their rate increase. All the phone calls, Email etc, can't stop this.

  • wral mods blow close my account Mar 19, 9:11 a.m.

    Be sure to thenk the GOP for the rate increase.

    Please remeber to vote them out in the midterms.

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