KEN CUCCINELLI: N.C. should block this Duke Energy power grab
Tuesday, Sept. 28, 2021 -- It is hard to see why any state legislator - Republican or Democrat - would find voting for House Bill 951 to be in the best interest of his or her constituents due to the bill's dramatic imbalance in favor of Duke Energy at the expense of North Carolinians. HB951 would take an electricity regulation regime that already unfairly favors the monopoly utility and make it even worse.Posted — Updated
Virginia and North Carolina have similar monopoly-controlled electricity regulations that were put in place nearly 100 years ago. Unfortunately for Virginia, we’re several years ahead of North Carolina in passing (bad) new energy laws, some of which have resulted in major costs for customers. While I was Virginia’s Attorney General, I and others attempted to avoid those mistakes – and now, I’m hopeful that our ‘lessons in failure for ratepayers’ will help North Carolina choose a different path and make better decisions for your electricity customers.
I also recognize that electricity regulation legislation is one of the most complicated issues legislators address. There is no other issue with such enormous and long-term consequences for legislators’ constituents.
One way to identify whether a particular piece of legislation is “balanced” between all of those with an interest in the course of electricity regulation is to determine for each of the major subjects addressed: Do both sides benefit similarly? Do they both carry similar burdens or risks?
In a word, reciprocity. Does the bill provide reciprocity?
A similar structure approved in Virginia several years ago has been disastrous for customers. Virginia regulators just announced that Dominion Energy earned a profit of 13.61% from 2017 to 2020, resulting in $1.143 BILLION in over-collections from customers (i.e., over-earning). To make matters worse, Virginia’s law prevents full refunds to electricity customers.
- Ensure that the utility operates with transparency and a full accounting of their spending;
- Increase ratepayer protections or guardrails, and:
- Most critically, a 100 percent “true-up” of utility’s over-earnings for all years between rate cases (i.e. pay back to ratepayers based on initial cost estimates compared to final costs over those years). Only then could the concept be workable, fair and balanced.
The Commission should be left to judge Duke’s proposed capital projects based on the needs of Duke’s North Carolina customers. The NCUC is in a much better position to competently cake these decisions (and with more expert support) than the legislature.
Until we move away from monopolies (a desirable goal) and increase market competition, the independent role of the Utilities Commission is going to be critical to achieving the balance between Duke’s right to make a reasonable profit and the rights of families and businesses across North Carolina to reliable and lowest-achievable-cost power. HB951 badly misses this balance. Again, no reciprocity.
Copyright 2023 by Capitol Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.