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A Message from David Fountain, Duke Energy North Carolina President: Rate Change Proposed for Building a Smarter Energy Future

davidRecent work to modernize power plants and generate cleaner electricity, responsibly manage coal ash and improve reliability while enabling more options for customers is at the heart of Duke Energy Carolinas’ proposed rate adjustment filed on August 25 with the North Carolina Utilities Commission (NCUC).

Duke Energy Carolinas serves 2 million households and businesses in central and western North Carolina, including the Triad and Charlotte. Duke Energy Progress, which serves electric customers in parts of central and eastern North Carolina and in the Asheville region, filed a similar request to adjust rates June 1. Duke Energy Progress customers will not be affected by this new request.

Through smart investments in cleaner energy plants and renewable resources, safely managing coal ash, and the grid that powers our lives and improves reliability, we are focused every day on providing customers increasing value and laying the foundation for a smarter energy future. Based on these investments, the filing with the NCUC proposed an increase in rates for residential customers by 16.7 percent. Duke Energy Carolinas has maintained rates below the national average, and with the proposed change, customers would continue to pay rates lower than in 1991, when adjusted for inflation.

If the proposal is approved, a residential customer who uses 1,000 kilowatt-hours (kWh) of electricity monthly would pay about $122.68 per month, reflecting an increase of about $18.72 per month. Since Duke Energy Carolinas’ last request to adjust rates in North Carolina in 2013, this represents approximately a 2.5 percent annual increase. Duke Energy Carolinas has included in its proposal options to spread recovery of certain costs over multiple years to reduce the immediate impact on customer bills. 

Generating cleaner energy

Nearly half of the proposed rate proposal is related to investments made to generate electricity for customers from cleaner sources of energy like natural gas and solar generation. This includes a highly efficient natural gas plant in Anderson County, S.C., that serves North Carolina customers and continues to reduce carbon emissions, as well as two solar sites in Monroe and Mocksville, N.C., that provide emissions-free energy to homes in the Carolinas.

Nuclear energy is also a vital component of Duke Energy’s generation portfolio now and in the future – providing reliable, carbon-free electricity to the Carolinas. To preserve the option of constructing new nuclear generation, the proposal also requests recovery of licensing and initial development costs of the Lee Nuclear Project. Although risks and uncertainties have become too significant to initiate construction of the project at this time, Duke Energy will maintain the license to construct new nuclear generation at the site if it is in the best interests of customers in the future.

Managing coal ash responsibly and recycling byproducts

Duke Energy Carolinas is responsibly managing coal ash and safely closing ash basins at its coal sites in the Carolinas. Duke Energy recycles about 75 percent of coal combustion byproducts, such as gypsum and coal ash, being produced at its plants in North Carolina, and is recycling or has plans to reuse material at all of its plant sites in the state. Costs for complying with new federal and state laws and regulations regarding coal combustion byproducts are included in the rate request. However, customers will never be asked to pay for costs associated with the company’s response to the Dan River coal ash release in 2014, or for any fines or penalties the utility has incurred from the Dan River release.

Enhancing reliability and customer experience

We invest in the latest innovations to make electricity more reliable and give customers more control of their energy use to manage their bills. Smart meters enable more energy-saving, bill-lowering tools for customers and faster service connection and outage detection. Also, our investments in storm hardening and self-optimizing grid technology will help reduce outages and improve reliability for customers.

Next steps

Duke Energy Carolinas will demonstrate to the NCUC why the proposed rate adjustment is prudent through a public review process that includes an opportunity for public comment. New rates, if approved by the NCUC, would go into effect in the spring of 2018.

Asking customers to pay more for energy isn’t something we take lightly. We remain committed to keeping rates reasonable, while also making the important investments needed to provide reliable and increasingly clean electricity we know customers expect.

For more information about our proposed rate change, visit www.duke-energy.com/future.

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David Fountain
North Carolina President