NC WARN strongly supports Attorney General Cooper’s appeal of the Duke
Energy rate increase — the 10.5% rate of return is far too high in a
struggling economy, when most residential and commercial customers are
struggling to pay electric bills.Note that Cooper’s action is largely a
response to the many of you whose public testimonies and letters called
Duke’s profits, rate request and overall expanionist business model out
of line with what is actually happening in today’s economy and
environment.
Please send SHORT NOTES of appreciation for Cooper standing
up for the public interest to his Information Director Noelle Talley: ntalley@ncdoj.gov
Intervenors from the rate case have 20 days to join the appeal.
Co-intervenors NC WARN, NC Justice Center and the NC Housing Coalition
are considering such action.
Jim
The Charlotte Observer
NC attorney general challenges Duke Energy rate increase
By Bruce Henderson
March 29, 2012
Attorney General Roy Cooper said Wednesday he will appeal the 7 percent N.C. rate hike Duke Energy won in January.
Cooper called the rate hike, Duke’s second in the state since 2009,
“wrong for N.C. consumers and businesses” in tough economic times. The
appeal will go to the N.C. Court of Appeals.
“The economic realities faced by N.C. consumers must be put before
company profits,” Cooper said in a statement. “Hundreds of people have
contacted my office to let us know they can’t afford to pay much more
for electricity in these tough times.”
Rates will go up about $7 a month for most of Duke’s residential customers. The utility has 1.8 million customers statewide.
Duke, which initially sought a 15 percent rate hike, said it is disappointed in the appeal.
Spokeswoman Betsy Conway said the settlement with the commission’s
Public Staff, which represents consumers, balanced Duke’s need to
recover $4.8 billion in capital spending with economic hardships faced
by customers.
“We understand that the timing was challenging,” Conway said. Duke
agreed in the rate settlement to donate $11 million to help low-income
customers with energy costs.
Cooper’s appeal does not challenge Duke’s spending on power plants
and pollution-control upgrades. It focuses instead on the 10.5 percent
return on equity, or investor profit, the utilities commission approved.
It claims there’s not enough evidence in the commission’s findings
that such a return is reasonable. The filing does not say what rate of
return the attorney general would accept.
State law says the commission should approve a rate of return
“considering changing economic conditions and other factors” such as
construction projects by the utility.
“The rate of return testimony should balance the rate of return
investors expect against the economic conditions and returns that Duke’s
customers are experiencing,” the filing said. None of the expert
witnesses who testified on the rate of return discussed the economic
conditions customers face, it added.
Most members of the public who spoke at commission hearings protested the rate hike.
“The commission essentially backed into its finding … by noting that
the stipulated return on equity falls between the parties’ negotiating
positions and further noting that none of the (return) witnesses
objected to the stipulated figure,” Cooper’s appeal said.
The attorney general’s staff was among several formal parties to the
rate case, including representatives of large customers, advocacy groups
and consumer groups. While most of those parties signed settlement
agreements, or did not oppose the agreements, the attorney general did
not.