Utilities Commission hears Progress Energy on rate increase
Posted September 16, 2008 10:04 a.m. EDT
Updated September 16, 2008 11:48 a.m. EDT
Raleigh, N.C. — The state Utilities Commission is holding a hearing Tuesday on a proposed Progress Energy rate hike that could raise residential rates up to 16.2 percent.
The Raleigh-based utility filed a petition in June with the North Carolina Utilities Commission to increase rates by about $424 million, which would raise the average monthly energy bill to $112.57 from the current $98.86.
Earlier this month, however, Progress Energy filed a proposed settlement agreement that would reduce the impact of the fuel increase by spreading the rate increase over the next three years.
The result would reduce the increase for the average monthly bill to $108.02 – a total increase of about 11.5 percent, rather than 16.2 percent.
Whatever rate, if approved, will take effect Dec. 1.
Progress Energy spokesman Mike Hughes said Tuesday that a decision on the increase isn't likely to happen right away. The hearing, he said, is needed so commissioners can hear testimony, interview witnesses and look at exhibits in support of the hike.
Progress Energy has said the increase– the highest fuel-related increase since the 1970s – is needed because the price of coal, which the company uses to generate about half its electricity in the Carolinas, has soared in recent months.
Prices for natural gas and fuel oil, which account for about 5 percent of output, have also risen drastically.
Progress Energy says it does not make a profit from the fuel cost component of the rates. The company files annually to recover fuel costs. This year's filing reflects anticipated future costs, given continued higher prices.