Power Companies Likely Will Not Bill Customers For Isabel Costs
Posted September 23, 2003
RALEIGH, N.C. — Residents who went without electricity and phone service after Hurricane Isabel hit North Carolina probably will not have to pay for repairing the utilities' infrastructure.
Most publicly traded electric utilities and telephone companies said they don't plan to pass on repair costs from storm damage to customers. Instead, company shareholders will likely bear the costs.
The list includes Charlotte-based Duke Power, Richmond, Va.-based Dominion Resources _ which has 115,000 customers in North Carolina _ BellSouth and Sprint.
Raleigh-based Progress Energy said it hasn't made a decision on recouping repair costs from Isabel, which came ashore Thursday afternoon.
Duke Power still doesn't know how much it will cost to fix downed lines that left about 131,000 customers in the Triangle and the Triad without power for two days after the storm, spokesman Tom Williams said.
But the total will be much lower than the $87 million it cost to make repairs after the ice storm in December 2002 that left 1.4 million customers without power for as long as nine days, he said.
The last time Charlotte-based Duke passed storm repair costs on to customers was after Hurricane Hugo in 1989, which caused $65 million in damage.
"We will not seek increases to recover (Isabel) storm costs," Williams said. "This is part of our normal operating expense."
Progress Energy had 320,000 customers without power at the peak of last week's storm. Company spokesman Garrick Francis said it took $39 million to restore power to 460,000 customers in December.
Progress did not seek a rate increase for those costs.
"We've been focused on restoration and haven't figured out all the costs associated with Hurricane Isabel," Francis said. "Any discussion of cost or their allocation will be done at a later day."
Electric utility rates are frozen in North Carolina until 2007, but companies can ask the state Utilities Commission for increases to recover costs for unusual events.
Sprint isn't finished with repairs for Isabel damage, but doesn't plan to ask for a rate increase to cover the costs, company spokesman Tom Matthews said.
At the peak, the company had about 80,000 customers without phone service. On Monday, that total was down to 7,000, mainly in the northeastern part of the state.
He said the company shouldered about $30 million in repair costs from Hurricane Floyd in 1999, which knocked out service to about 150,000 customers.
"This is the cost of doing business," Matthews said.