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Docket No. E-2 Sub 1142

On June 1, 2017, Duke Energy Progress, LLC (DEP or the Company), filed an application with the North Carolina Utilities Commission requesting authority to adjust and increase its rates and charges for retail electric service in North Carolina. The Company serves approximately 1.5 million retail customers in North Carolina and South Carolina.

In its application, DEP requests authority to increase its rates and charges to produce additional overall annual North Carolina retail revenues of approximately $477.5 million, an increase of approximately 14.9% over current revenues. Further, DEP is seeking approval of a rate of return on common equity of 10.75%.

For existing residential customers, the proposed rates (excluding the effects of all riders) would change the bill of a residential customer using 1,000 kWh a month2, as follows:

Existing ($/month):                         $104.68
Proposed ($/month):                     $122.48
Change ($/month):                         $17.80
Change (%):                                       17%

The dollar amount and percentage change will vary with each customer’s level of electricity usage.

The increases shown above include a basic customer charge increase from $11.13 to $19.50 for most residential customers. The basic customer charge would increase from $16.45 to $22.50 for most small general service customers, from $20.32 to $30.00 for medium general service customers, and from $154.85 to $204.00 for large general service customers.

Time-of-use, general service, and interruptible customers would experience increases and/or decreases in their monthly bills based upon their particular rate schedule and usage level.

DEP states that recent work to (1) modernize its electric system, (2) generate cleaner power through renewable resources, (3) responsibly manage and close coal ash basins, (4) respond to major storms like Hurricane Matthew, and (5) continually improve service to its customers are the primary drivers behind the Company's request to increase its rates.

DEP also states that since its last general rate case in 2013, the Company has been adding new gas-fueled generation, along with adding new utility-scale solar facilities, to replace older, less-efficient coal-fired generation. In addition, DEP states that it has started construction on its Asheville Combined Cycle Plant, and has almost completed construction of its new Sutton Blackstart Combustion Turbine facility. Approximately $253 million of the requested $477.5 million increase in revenue is intended to recover the costs associated with these plant additions and upgrades.

The Company's also states in its application that it has begun complying with recently adopted federal and state rules regarding the handling of coal ash and closure of coal ash basins. The Company states that $66 million of the requested $477.5 million is intended to recover ash basin closure compliance costs incurred since January 1, 2015 to comply with these rules. The Company further states that it is requesting to recover $129 million toward ongoing ash basin closure compliance costs, with any difference from the requested amount to be deferred until a future base rate case.

In addition, the Company states that the remaining $29 million of the requested rate increase is intended to recover costs related to tax rate changes, purchased power costs related to its obligations to purchase renewable energy (required by federal law), storm related costs, nuclear development costs, and an updated Customer Information System (CIS). The Company states that its current CIS is 30 years old and no longer capable of being upgraded to accommodate future technology changes.

The Company requests that the proposed rates become effective on July 1, 2017; however, the Commission has issued an order suspending the Company's proposed rate changes for a period of up to 270 days from July 1, 2017.

 

 

 

 

 

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