Business

Progress seeks first rate increase in 25 years

Posted October 12, 2012 3:28 p.m. EDT

— Progress Energy Carolinas asked state regulators Friday to raise its electricity rates in North Carolina for the first time since 1987.

In a filing with the N.C. Utilities Commission, the Duke Energy Corp. subsidiary seeks to increase annual base revenue by approximately $387 million, or 12 percent, but that would be slightly offset by a corresponding change in the portion of rates that pays for energy-efficiency and demand-side management programs.

"We know there's never a good time to seek a rate increase, and we have worked hard to maintain rate stability while providing excellent service to our customers," Brett Carter, Duke Energy's state president for North Carolina, said in a statement.

"The investments we have made and continue to make in the system will ensure electricity remains reliable and affordable, even as we continue to make it increasingly clean for the future," Carter said. "We are committed to minimizing the impact of increased costs through energy-efficiency programs tailored to our customers' needs and assistance for low-income consumers."

The company has spent nearly $11 billion on its power systems since its last general rate increase, which was tied to the opening of the Shearon Harris nuclear power plant in southwest Wake County, officials said.

Progress is in the midst of retiring 12 coal-fired units, representing more than 1,660 megawatts of generating capacity, and replacing them with low-emission, natural gas-fueled plants.

Officials said the proposed increases, which would take effect next summer if approved, would raise residential rates more than commercial and industrial rates to more accurately reflect the cost of serving residential customers.

The total net residential increase would average 14.2 percent, to $119.94 from $105.15 for a customer that uses 1,000 kilowatt-hours a month. The change includes raising the standard customer charge to $13.50 per month from $6.75.

The average net increase for commercial and industrial customers would be about 9 percent.

The proposal doesn't affect Duke Energy customers in North Carolina, although Duke has said it plans to seek its own rate increases in the coming months.

Officials said the recent merger of Duke and Progress didn't trigger the rate request, noting that it had been planned for a while.