NC attorney general to appeal Duke Energy rate increase -- again

jmurawski@newsobserver.comOctober 24, 2013 

COOPER.090810.TI

N.C. Attorney General Roy Cooper

TAKAAKI IWABU — newsobserver.com

N.C. Attorney General Roy Cooper plans to appeal – for a second time – a 7.2 percent rate increase for Duke Energy, a move believed to be the first time the same utility rate increase will be appealed twice to the N.C. Supreme Court.

Cooper, a Democrat who is expected to run for governor in 2016, is underscoring a pronounced economic shift in North Carolina. The state was once known for having some of the nation’s cheapest electric rates but lately has been catching up to the rest of the country as utilities here come in for regular rate hikes.

Cooper contends that the N.C. Utilities Commission approved Duke’s rate hike without sufficiently considering the decision’s economic effect on the Charlotte power company’s 1.8 million customers in North Carolina. The N.C. Supreme Court agreed with Cooper and earlier this year directed the Utilities Commission to review the case. But on Wednesday, the commissioners disagreed and upheld their original decision.

Cooper on Thursday called the Utilities Commission’s latest decision “window dressing” and said that the commissioners should have reduced Duke’s rate.

The Utilities Commission rejected arguments by Cooper and the Supreme Court that it ignored consumers’ pleas. In its Wednesday ruling, the commissioners wrote that they held public hearings across the state and listened to hundreds of utility customers, sometimes late into the night.

Durham activist Jim Warren, director of NC WARN, said the Utilities Commission has assured Duke a “very high guaranteed profit level during such a down economy.”

In all, Cooper will be juggling four separate appeals of utility rate increases.

While he’s vowing a repeat appeal of Duke’s 2012 rate increase, Cooper is also appealing this year’s 5.1 percent rate increase for Duke. And he’s appealing this year’s 5.5 percent increase for Duke’s Raleigh subsidiary, Duke Energy Progress, which has 1.3 million customers in Raleigh and eastern North Carolina.

The rate increases are typically phased in over several years, and some are not in full effect yet. The rate hikes approved by the Utilities Commission are typically about half the amount the utilities originally requested.

The attorney general is also appealing a rate increase approved for Dominion North Carolina Power, which has about 121,000 customers in the northeastern part of the state. That case is scheduled for oral arguments before the N.C. Supreme Court on Nov. 19.

Cooper’s parallel appeals are based on the premise that the Utilities Commission did not factor in customers’ financial pain when approving the rate increases.

Proving that customers were taken into consideration is an elusive proposition in a utility rate case. A utility’s corporate expenses and operating costs can be documented through accounting methods, but there is no mechanism for appraising the effect of rates on hundreds of thousands of residents.

In its decision Wednesday, the Utilities Commission said that historically, it never had to quantify the effect of rates on customers. Instead, the commissioners said that state law required setting utility rates as low as possible as long as the utility could pay its expenses and make a reasonable profit.

Murawski: 919-829-8932

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