Duke Energy bill to change rate-making process clears Senate

After negotiations between House and Senate leaders, the study language is gone, and the bill's original intent is back. The measure passed the Senate 26-16 and will likely be back before the House for a vote next week.

Rep. David Lewis, R-Harnett, a key supporter, said he believes the bill will pass. He said the the month-and-a-half since the measure was last on the House floor gave him and others time to bring other lawmakers around.

If the bill clears the House, it heads to Gov. Roy Cooper, who voiced concerns with the bill in August. His press office would say Wednesday only that the governor would review the measure and make a decision if it gets to his desk.

The bill has two sections. One hasn't been controversial and would change the way Duke and other utilities finance repairs after major storms. Lewis said this should save 15 to 20 percent on those costs, but he and others have repeatedly declined to separate this section of the bill from its controversial second part.

That section would let the North Carolina Utilities Commission approve electric rate increases up to three years in advance and give utilities more cushion on their allowed earnings, approving a "band" of allowed profit above and below a certain percentage. The newest version of the bill would have the Utilities Commission convene a group of stakeholders before allowing this, essentially building the study into the measure but also authorizing the commission to implement the new rate-making structure without coming back to the legislature first.

Critics have said these changes will increase Duke's profits at ratepayers' expense. Sen. Paul Newton, R-Cabarrus, a former Duke executive and part of the House-Senate conference committee that negotiated the bill's new language, said he believes the measure is better for consumers because it caps the utility's returns.

"If you're a consumer advocate ... you should love this bill," said Newton.

Industry analysts have been tracking the bill, though, dinging Duke's stock when its prospects for passage dimmed earlier this year.

In the House, two of the Republican conference committee members assigned by leadership to negotiate the final bill, Reps. Dana Bumgardner, R-Gaston, and Larry Strickland, R-Johnston, declined to sign off on the new language.

It was Strickland who moved to turn the bill's second section into a study.

Advocates have noted repeatedly that the bill wouldn't require the Utilities Commission, which has to sign off on rate increases after lengthy, costly and routine hearings, to change the way it does business; it would just allow them to do so. They've pitched it as a regulatory modernization, and even critics have said changes are needed, though they argue for a slower approach less dominated by the utility giant.

"I think it would be ludicrous for him to do that," Lewis said.