Publish Date : 25-Jul-2013
Duke Energy Carolinas, a subsidiary of Duke Energy, has reached an agreement with the Office of Regulatory Staff (ORS), Wal-Mart, the S.C. Energy Users Committee and the S.C. Small Business Chamber of Commerce concerning the utility's request to raise base rates in South Carolina.
The settlement includes a significant reduction in the rate increase to customers, while providing a fair return for the company's investors.
Duke Energy originally requested an average increase in retail revenues of 15.1 percent, or about $220 million. Under the terms of the settlement, the increase to the company's annualized revenue is reduced to about $80.4 million in the first year, with customer rates increasing an additional $38.2 million (for a cumulative increase of about $118.6 million) beginning in the second year.
During the first year, the average increase will be about 5.53 percent. After that, rates will increase by an additional 2.63 percent for a total average increase of about 8.16 percent.
Under the terms of the settlement, the company agrees it will not request to implement another base rate increase prior to September 2015, absent situations such as incurring costs for new generation or except where necessary due to unforeseen extraordinary economic or financial conditions.
Under the settlement, the monthly bill for a typical residential customer using 1,000 kilowatt-hours a month in the first year would be $107.97, or an increase of $7.52 (7.5 percent). In the second year, it would be $110.76, or an increase of $2.79 (2.6 percent).
To ease the impact of the rate increase, the company has agreed to one-time contributions from shareholders of $1 million to be used under the direction of the ORS to support public education initiatives and senior outreach.
Duke Energy will also provide $2.5 million to fund Share the Warmth and other public assistance programs for low-income customers, as well as manufacturing competitiveness grants, economic development and/or education/workforce training programs.
The settlement agreement is subject to review and approval by the Public Service Commission of South Carolina (PSCSC).
"We believe the settlement reflects an appropriate balance between the needs of our company and those of our customers," said Clark Gillespy, Duke Energy's South Carolina state president. "If approved, this agreement will allow us to keep the rate increase to customers as low as we reasonably can, and still recover the investments we've made to modernize our system and to ensure safe, reliable and increasingly clean electricity for the future." "We also recognize the timing of the increase can be a challenge for some of our customers. Part of this settlement is a shareholder contribution to help our most vulnerable customers in our South Carolina service territory," Gillespy said.
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