Duke Energy’s NC President Misrepresented Rate Hike Facts Under Oath
NC Attorney General Jeff Jackson slammed Duke Energy’s NC President for providing inaccurate information about the company’s rate hike request while testifying under oath during a hearing before the NC Utilities Commission (NCUC) last week.
A statement from AG Jackson’s office noted that Kendal Bowman, North Carolina President for Duke Energy Progress and Duke Energy Carolinas, testified in an NCUC hearing that under a proposed settlement the residential rate increase would be 3.7% in Rate Year 1 and 3.1% in Rate Year 2 – or 6.8% in all.
The Real Numbers; Three Continuing Problems
In fact, the NC Department of Justice says, the proposed residential rate hike would total 9.3% over two years, not 6.8%. Over time, the difference adds up to significantly higher bills for residential customers.
“The details matter here, and Duke got it wrong under oath,” said Attorney General Jeff Jackson. “A 6.8% increase was already too high for families, and Duke can’t justify an even bigger increase. We’re not signing this deal.”
This exchange highlights three continuing problems with Duke’s cascading rate hike requests.
1: Duke’s Massive Profits, North Carolinians Paying the Price
First and most simply, Duke is proposing major increases in its rates at a time when many families are already struggling to pay their bills, while Duke’s corporate profits are hitting record levels under their current rates.
As AG Jackson puts it, “Duke started this case asking families for an 18% increase. We pushed back, and now its own filing shows 9.5%. That is movement in the right direction, but it is still too high. We are not joining this deal, and we will keep pushing for lower rates.” He notes that the proposed rate hike includes a “return on equity” (profit rate) of 9.8%, higher than the rate his office’s experts say is sufficient, 7.4%. This difference alone would require Duke’s customers to pay $1.37 billion more over the next two years.
2: A Greedy Corporation
Second, these continually shifting numbers illustrate the unreliability of Duke’s requests as a representation of its actual need. It is simply asking for the highest returns it thinks it can get for its stockholders. As Dan Crawford, senior director of public affairs at the North Carolina League of Conservation Voters (NCLCV), said sarcastically during a press conference last week, “Poor, poor Duke. They’re barely scraping by on $5 billion in profits they made last year, and last week, they announced they’re already on track to make even more this year. Clearly, they need this increase.”
3: NC Families Hit Hardest
Finally, the source of the Duke Energy NC President’s misstatement in her testimony reveals how residential customers are bearing more than their fair share of paying Duke’s inflated profits. The 6.8% average increase she said applied to residential customers actually refers to the average rate hike to be paid by all customers put together, including the lower rates charged to industrial customers.
Utility rate cases are complex, and involve technical calculations that can leave heads spinning, but the bottom line is clear: A bad deal is a bad deal. Attorney General Jackson and other critics are right to fight back against this one, and the NC Utilities Commission should listen.
“Cut Duke’s guaranteed profits. Stop raising our bills to pay for it,” says NCLCV’s Dan Crawford to the Utilities Commission. “Stand up for the people of North Carolina.”
