As it pushes back hard against regulators in the Palmetto State, Charlotte, North Carolina-based Duke Energy is ramping up rates in its home state – looking to secure a whopping 10.4 percent return on equity for its investors.
In pursuit of that benchmark (which amounts to approximately $291 million) the company would raise rates on roughly two million customers in the Tar Heel State by 6.7 percent. Residential customers would see an average increase of $8.06 on their monthly bills, which would now clock in at around $116.26.
Industrial and commercial customers would see a smaller 5 percent rate hike.
If approved, the rate increases would take effect on August 1, 2020.
Duke sought an astronomical 16.7 percent rate hike on North Carolina customers last year, but that plan was rejected by the North Carolina Utilities Commission (NCUC). Ultimately, Duke raised rates by 0.3 percent – although residential customers were hit with an 18.7 percent hike in their monthly grid access fee (an increase that was substantially less than the 50.7 percent hike Duke originally proposed).
In South Carolina, Duke’s attempt to push through a massive rate hike on residential customers was slapped down by regulators with the S.C. Public Service Commission (SCPSC) – who referred to the proposal as “tone deaf,” The company eventually swallowed a much smaller rate hike, but not after threatening to sue regulators and making thinly veiled threats related to its various capital investments in South Carolina.
(Click to view)
(Via: Duke Energy)
According to our sources, these threats were reiterated two months ago when company executives met with officials at the S.C. Department of Commerce (SCDOC) to voice frustration over the way they had been treated by state regulators. At this meeting, Duke executives allegedly threatened to withhold assistances for “economic development” efforts in South Carolina – and made “specific threats” related to SCDOC’s ongoing crony capitalist schemes.
Playing hardball, in other words …
It worked, too. Shortly after the meeting, SCDOC secretary Bobby Hitt scheduled a late September appearance before SCPSC commissioners and staff – at which he toed the company line regarding the role energy providers played in industrial recruitment. Following his presentation, Hitt was questioned by commissioners about his previous meetings with energy executives. While he acknowledged meeting often with them, Hitt assured commissioners that he did not discuss his testimony with them beforehand.
Do we buy Hitt’s assurances? Sure … about as much as we buy his job creation and capital investment projections.
Which is to say we do not buy them at all …
Obviously we will keep a close eye on this situation as Duke pushes for fresh rate hikes in South Carolina, and as state lawmakers decide what to do with government-run Santee Cooper – a state-owned utility that spearheaded a spectacularly failed intervention in the nuclear power business. That project – NukeGate – has left Palmetto State ratepayers (and taxpayers) on the hook for billions of dollars in losses related to the abandoned construction of a part of next-generation nuclear reactors in Fairfield County, S.C.
Duke is believed to be among the companies making a play for Santee Cooper, although that bidding process – much to our chagrin – is currently taking place behind closed doors.
Stay tuned … never a dull moment in the South Carolina energy wars.
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