Duke Energy (NYSE: DUK) subsidiary Carolina Power & Light (CPL) filed a rate request with the North Carolina Utilities Commission (NCUC) Oct. 12 seeking an average 11% increase in retail revenue to help pay for new power generation.
The rate request equaling $359m in rate increases was also outlined in a filing with the U.S. Securities &Exchange Commission (SEC).
CPL d/b/a Progress Energy Carolinas request is premised upon a North Carolina retail rate base of $6.9 bn and an 11.25% return on equity on a 55.4% equity component of the capital structure. The rate increase request is primarily driven by capital investments for plant modernization and recovery of costs. A procedural schedule has not yet been established, but if approved by the NCUC, rates are expected to go in effect in mid-2013.
The company is involved in $2.3bn for plant modernization and other capital additions. This includes post in-service deferrals associated with the Smith Energy Complex and the Lee Energy Complex, CWIP (construction work in progress fees) associated with the Sutton combined-cycle plant and accelerated depreciation on un-scrubbed coal plants that have been retired or will be retired.
The 625-MW Sutton natural gas plant is expected in service in the fourth quarter of 2013, around the same time that some coal units will be retired. The new Lee combined-cycle natural gas plant is scheduled to enter operation in 2013 to help replace coal-fired units that were retired this fall.