This news is classified in: Traditional Energy
Jun 15, 2023
Duke Energy Progress is seeking to recover costs for the fuel used to generate electricity for North Carolina homes and businesses. If approved by the North Carolina Utilities Commission (NCUC), residential rates would go up 4.3% at the end of this year – roughly half the 8.4% increase approved in 2022.
Rates would initially increase by 4.4% as of Dec. 1, then decline 0.1% on Jan. 1 when energy efficiency and demand-side management adjustments take effect.
If approved, the total monthly impact of these changes for a residential customer using 1,000 kilowatt-hours (kWh) of electricity would be an increase of $5.98, from $138.13 to $144.11 ($144.22 for December). Rates would remain well below the national average of $171.67, as of last winter.
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“While we continue to see increasing energy demand as a result of a growing economy, fuel prices have begun to stabilize, which is a positive sign for our customers,” said Kendal Bowman, Duke Energy’s North Carolina president. “Our North Carolina customers have consistently experienced below-average rates, and we’re working hard to keep customer bills as low as possible.”
The company does not profit from these increased fuel costs and proactively takes measures to insulate customers from volatility. For example, the company achieved $227 million in savings for North Carolina customers by aggressively managing fuel contracts to obtain the best price, substantially reducing the overall rate impact for customers. Also, carbon-free nuclear provides about half of North Carolina’s generation and helps minimize fuel volatility.
Water heating is typically the second-biggest user of energy in your home, behind air conditioning – experts say cold water is sufficient for cleaning laundry with modern detergents, and that cuts down on energy use.
To ensure accurate rates, the NCUC annually reviews the fuel costs required to serve customers. Learn more at Fuel Costs & Your Bill .
If approved, rates for typical bills of commercial and industrial customers would increase by 3.5% and 3.7%, respectively. The increase for all customer classes is primarily driven by an under-collection in fuel rates over the last year resulting from a sharp increase in fuel costs experienced during 2022 – Duke Energy Progress customers paid $445 million less than the actual cost of fuel. New rates will include recovery of this shortfall, which the company has financed on behalf of customers.
Driven by increased national and international demand and tight supplies, fuel prices rose sharply following the company’s 2022 fuel filing before falling in 2023. North Carolina law does not allow electric utilities to adjust rates during the billing period to address such customer underpayment.
Conversely, state utility regulation allows natural gas providers the opportunity to adjust monthly, if approved by regulators. For example, Piedmont Natural Gas recently filed its third rate reduction of the year. While fuel prices over the coming year are subject to change, this downward trend bodes well for customers in next year’s fuel filing.
Last June’s Duke Energy Progress annual filing increase for typical bills was 8.4% for residential customers, 4.6% for commercial customers and 5.6% for industrial customers, stemming from a post-COVID burst in economic activity and a $255 million under-collection.