August 5, 2011
Duke Energy Carolinas Requests Increase to Electric Rates in South Carolina
CHARLOTTE, N.C., Aug. 5, 2011 /PRNewswire/ -- Duke Energy Carolinas has filed a request with the Public Service Commission of South Carolina to increase electric rates by approximately $216 million.
Nearly 90 percent of the rate increase would allow Duke Energy Carolinas to begin recovering $6.5 billion in investments to modernize its electric system and comply with state and federal emissions regulations.
"Customers count on us to supply the electricity that powers their lives," said Catherine Heigel, president, Duke Energy South Carolina. "The investments we are making to modernize our system will ensure the electricity they depend on will be there for decades to come."
As work on modernizing the system continues, Duke Energy Carolinas has been aggressively managing customer costs. Last year, the company's power plants set records for operational efficiency, while operations and maintenance costs were held essentially flat.
The following chart illustrates the proposed rate increases by customer type:
Customer Class Average rate increase percentage Residential 17 percent Commercial 11 percent Industrial 13 percent Commercial / Industrial (Time of Use) 14 percent Lighting 14 percent -------- ----------
This table shows the average impact of the proposed changes for each customer class. The specific increase or decrease to individual customers will vary depending on the rate they pay and other factors.
This fall, when rates are adjusted to reflect fuel costs, a typical residential customer who uses 1,000 kilowatt-hours per month of electricity would pay approximately $99. If the company's rate increase is approved, that bill will increase by approximately $15.
If approved, new rates would likely go into effect February 2012.
Why raise rates?
The majority of the proposed rate increase is the process to recover investments already made to retire and replace aging power plants and equipment and to comply with state and federal environmental regulations. As outlined in the company's 2010 Integrated Resource Plan, Duke Energy Carolinas plans to retire 18 units at five coal-fired power plants and 20 units at four natural gas-fired power plants by 2015 as part of the company's strategy to comply with new environmental regulations.
Examples of electric system investments include:
- The new sulfur dioxide scrubber, which is equipment required to meet federal emission standards on an existing unit at the Cliffside power plant on the border of Rutherford and Cleveland counties in North Carolina and just across the South Carolina state line.
- The new natural gas-fired power plant at the Buck facility in Rowan County, N.C.
- The new hydroelectric powerhouse at the Bridgewater facility in Burke County, N.C.
- Significant investment in new transmission and distribution infrastructure.
- Technology improvements at nuclear power plants.
- Financing costs associated with the new state-of-the-art coal-fired unit at Cliffside, the new Dan River natural gas-fired power plant, and improvements at Oconee Nuclear Station.
The remaining amount of the increase covers changes in financing and other general costs.
In July, the company filed a similar request with the North Carolina Utilities Commission to increase customer rates by an average of 15 percent.
The company's request proposes an allowed return on common equity (ROE) of 11.5 percent (current allowed ROE in South Carolina is 11 percent with rates set at 10.7 percent) with a 53 percent common equity component.
The company's request equates to an increase in pre-tax revenue requirement of approximately $216 million. The South Carolina allocation of rate base is expected to be approximately $4.1 billion through October 2011.
For more details around the company's request to increase rates, visit www.duke-energy/scratechange.
Money-Saving Opportunities for Customers
Duke Energy wants to help customers make the best use of every dollar spent on their energy-related costs. As part of this effort, customers can visit www.duke-energy.com/youtility for energy-saving tips and more.
The testimony filed in support of the company's request can be viewed at the PSCSC Website (search using Docket 2011-271-E).
Downloadable graphics, photos and information are available at www.duke-energy/scratechange.
Photos of some of the capital investments made in the Carolinas' electric system can be downloaded from Flickr.
Duke Energy Carolinas
Duke Energy Carolinas owns nuclear, coal-fired, natural gas and hydroelectric generation. That diverse fuel mix provides approximately 19,000 megawatts of electricity capacity to approximately 2.4 million customers in a 22,000-square-mile service area of North Carolina and South Carolina. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 500 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available on the Internet at: www.duke-energy.com.
CONTACTS: Media Jason Walls Betsy Conway 800-559-3853 Stephen De Investors May 704-382-2620 Bill Currens 704- 382-1603
SOURCE Duke Energy