Duke Energy unit seeks 15% rate hike on NC customers

RALEIGH, North Carolina (WTVD) -- One of Duke Energy's two North Carolina operating divisions said Thursday it wants to raise electricity rates by an average of 14.9 percent to pay for cleaning up coal ash pits, transmission system upgrades and converting to more natural gas.

The typical household customer of Duke Energy Progress, which operates in much of eastern North Carolina and around Asheville, would see an average 16.7 percent increase, or about $17.80 more per month for a total $122.48 starting in January, if the North Carolina Utilities Commission approves the request. Industrial and other customers would see rate increases of other sizes.

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The nation's largest electric company filed its request for an extra $477 million a year with state utilities regulators for the subsidiary's 1.3 million North Carolina customers. A separate request affecting Duke Energy Carolinas customers in Durham and western North Carolina could come before the state Utilities Commission later this year.

Duke Energy Progress last sought a rate increase in 2012, when it wanted an average 14 percent increase for households and 9 percent for commercial and industrial customers. The utilities commission approved and the state Supreme Court allowed an average 5 percent increase.

"Our customers tell us they want electricity that is more reliable and increasingly clean, and they also want more value and choice every day," said David Fountain, Duke Energy's North Carolina president. "It is critical that we, as their energy provider, balance these needs with smart investments that keep costs reasonable and keep North Carolina competitive."

The utilities commission will hold public hearings and take written comments about the proposed Duke Energy Progress rate increase before making any decision.

The new rate increase represents the first time Duke Energy Progress has asked approval to pass along to North Carolina consumers some of the utility's multibillion-dollar cleanup costs for toxic byproducts left after decades of burning coal to generate power. South Carolina's utilities commission allowed Duke Energy Progress to start recouping coal ash cleanup costs as part of a $56 million rate increase approved in December.

Duke Energy said it has spent more than $725 million out of a total estimated to cost $5.1 billion to excavate coal ash and move it away from waterfront sites, while drying out and capping pits containing most of its coal ash. Duke Energy Progress is asking North Carolina regulators to allow it to recoup $332.5 million of the coal pit closure costs over the next five years and another $129 million a year for ongoing closure costs, the company said.

Consumers should bear the costs after enjoying low-cost power from coal-burning plants, CEO Lynn Good and other Duke Energy executives have said. The company also said it stored coal ash in line with industry practices and regulations in place over preceding decades.

"We are transitioning to a cleaner generation mix, closing older, less-efficient coal-fired plants and shifting to natural gas, carbon-free nuclear and expanded solar energy," said Fountain. "Through these investments, we are providing customers cleaner, more reliable energy and have laid the foundation for a smarter energy future from which all North Carolinians can benefit."

Opponents say the utility's shareholders should pay for all coal ash to be moved to stop the continuing pollution of groundwater and rivers with leaks containing mercury, arsenic and other heavy metals.

Charlotte-based Duke Energy is pursuing an extensive construction spending plan that it will seek to charge its 7.5 million electricity customers in the Carolinas, Florida, Kentucky, Ohio and Indiana.

Duke Energy plans to spend $25 billion over a decade to modernize its transmission grid so that it's safer from cyber-attacks and equipped to take in renewable energy from many new installations. The company also plans to spend $11 billion in natural gas and renewables over the next 10 years as it accelerates its move away from burning coal to lower-cost fuels.