In part due to the costs of its transition away from coal-fired power, as well as higher operating expenses, Progress Energy Carolinas, a subsidiary of Duke Energy (NYSE: DUK), on Oct. 12 filed a request with the North Carolina Utilities Commission to increase North Carolina retail rates.
This is the company’s first general rate increase request since 1987. Progress Energy Carolinas is seeking to increase annual base revenues by approximately $387m, or an average of 12%. A corresponding change in the portion of retail rates that pays for energy-efficiency and demand-side management programs would reduce the revenue request to $359m per year, or an average of approximately 11%.
The largest portion of the request is for investments made to modernize the power system. Progress Energy Carolinas is retiring 12 coal-fired units at five sites in the Carolinas, representing more than 1,660 MW of generating capacity, and replacing them with low-emission, natural gas-fueled combined-cycle plants. The company has invested more than $1.3bn in bringing two gas-fueled plants online in the last 16 months in Richmond and Wayne counties, North Carolina. A third combined-cycle plant is under construction near Wilmington, N.C., and is scheduled for completion in late 2013.
Since the last general rate case in North Carolina – which was filed after the Harris Nuclear Plant came online in Wake County in 1987 – Progress Energy and its predecessor, Carolina Power & Light, have invested nearly $11bn in the power systems that serve 1.3 million households and businesses in North Carolina, the utility said. Since 1987, the utility’s customer base has grown by 86%, adding more than 600,000 households and businesses.
The company said it has invested in a number of additional gas-fueled power plants over the last two decades, and has made significant investments in the transmission and distribution systems that span more than half of North Carolina’s 100 counties – all without raising general rates.
The company’s filing requests that new rates take effect in mid-2013. The schedule for additional filings, public hearings and other elements of the rate request will be determined by the NCUC.
“We know there’s never a good time to seek a rate increase, and we have worked hard to maintain rate stability while providing excellent service to our customers,” said Brett Carter, Duke Energy state president – North Carolina. “The investments we have made and continue to make in the system will ensure electricity remains reliable and affordable, even as we continue to make it increasingly clean for the future. We are committed to minimizing the impact of increased costs through energy-efficiency programs tailored to our customers’ needs and assistance for low-income consumers.”
The recently merged companies include two N.C. utilities, Progress Energy Carolinas and Duke Energy Carolinas. The rate request filed Oct 12 affects Progress Energy Carolinas customers only. Progress Energy Carolinas expects to file a base rate request in South Carolina in 2013. Duke Energy Carolinas expects to file general rate cases in both Carolinas in the coming months.